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Jetsgo Collapse

Friday March 11, Will forever be remembered as a black day for Canadian Business.

It was then that Jetsgo announced in the dead of night that it was going out of business and halted all flights immediately as thousands of passengers prepared to jet away for one of the busiest travel periods of the year.

With 1,350 employees now out of work and up to 17,000 Jetsgo passengers left at empty ticket counters, people were furious.

It quickly became clear the lack of consumer protection available to passengers.

Visa Canada and MasterCard Canada said that all customers who booked Jetsgo trips using those credit cards would be reimbursed. However, the Travel Industry Council of Ontario said those who booked online or directly with the air carrier would not eligible for reimbursement.

Jetsgo, started flying in 2002, operating Boeing MD-83 airliners and were in the process of adding 18 Fokker 100 commuter jets. It operated to 30 destinations in Canada and the United States .

Jetsgo has been under enormous pressure to upgrade safety after a number of aircraft incidents earlier this year.

In January in Calgary when a jet inexplicably veered off the runway, leaving tire marks in the grass before taking off to try again. March 3, 2005 an engine failed as a Jetsgo aircraft was taking off from Toronto on a flight to Vancouver . On March 12, 2005 one of the carrier's planes was forced to land in South Carolina after an engine sprang an oil leak.

With this Transport Canada issued an "advance notice of suspension" on March 8, giving the airline until April 11 to improve its safety record. Nav Canada 's threatened to seize a part of Jetsgo fleet in an effort to ensure safety standards. This triggered the collapse of the airline dooming the airline company and its 17,000 passengers.

The remarkable thing in this story is that senior officials with the federal government and Jetsgo knew the shutdown was coming.

The federal transport minister says he was working on "scenarios" to help passengers before Jetsgo cancelled all air service. Jetsgo executives knew the Monday before the collapse they were in crisis. According to their court-appointed monitor, they began considering a shutdown on Wednesday. Yet the airline continued to fly passengers and sell tickets, right to the end leaving the Consumer on the hook for a poorly run business.

 


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