Jetlines Announces Business Combination with Global Crossing Airlines

Provided by Canada Jetlines Ltd/Globe Newswire

VANCOUVER, British Columbia, Dec. 13, 2019 (GLOBE NEWSWIRE) — Canada Jetlines Ltd. (JET: TSX-V; JETMF: OTCQB) (the “Company” or “Jetlines”) announces that it has entered into a letter of intent (the “LOI”) with Global Crossing Airlines (“GLOBALX”) with respect to a business combination of Jetlines and GLOBALX (the “Transaction”). GLOBALX is a developing United States based charter airline and is financially backed by two Miami based private-equity firms.

GLOBALX is a Delaware corporation in the pre-revenue stage with its head office located at Miami International Airport. GLOBALX plans to operate a US 121 charter airline using the Airbus A320-200 aircraft. GLOBALX business model includes the intention to provide ACMI and wet lease contracts to airlines operating within and to the United States and develop aircraft interchange with leading European charter/tour operators GLOBALX is currently in regulatory certification and is led by an operating team with a combined 140 years’ experience – including the former head of maintenance for two major US based A320 LCC carriers, and two retired Principal FAA inspectors with specific experience in the new Safety Management Systems and Quality Assurance.

In addition to the core business of GLOBALX, the combined entity (“Resulting Issuer”) will continue with an operating plan for Canada. This includes continuing to advance the Air Operator Certificate for Jetlines through the continued refinement of the Jetlines operating manuals and maintained in submission ready status. The Resulting Issuer also intends to initially operate charter operations in concert with major tour operators from Canadian cities to major leisure destinations in the United States. It is intended that GLOBALX aircraft will be used to operate these flights – branded as Jetlines, operated by GLOBALX.

Jetlines has determined that the Transaction provides the best opportunity at the present time to maximize value for the Company. The current intra-Canadian airline market is in a state of flux with consolidation ongoing at the major carriers, as well as at least three currently operating or planned market entrants in the Ultra-Low Cost Carrier segment. There is also no certainty regarding when the Canadian Competition Bureau will complete its investigation into WestJet and Swoop, or what the results of that investigation may be. The Transaction provides Jetlines with an opportunity to fly cross border with support from strategic partners who can provide lift, crews, marketing, sales, and capitalization. It also preserves the longer-term opportunity to continue with an intra-Canadian airline operation.

Mr. Mark Morabito commented, “While Jetlines made significant progress in building out a management team, advancing the airline licensing process, establishing systems, securing routes and obtaining financing commitments, ultimately current market conditions necessitated a change in strategy. The GLOBALX plan preserves Jetlines strategy long term and provides a more immediate opportunity to commence airline operations. I am resigning from Jetlines at this time in order to facilitate the GLOBALX transaction and its plans to restructure management.”

The Transaction is subject to the execution of a definitive transaction documents, approval of the TSX Venture Exchange (the “Exchange”), approval of the Jetlines and GLOBALX shareholders and other conditions customary for a transaction of this nature. There can be no assurance that the Transaction will be completed as proposed or at all.

Transaction Highlights

The following are the highlights of the terms and conditions of the LOI:

  • The Transaction is subject to the parties executing definitive transaction documents on or before January 30, 2020 (the “Transaction Documents”) and the final structure of the Transaction is to be determined upon the receipt of securities, tax and financial advice.
  • GLOBALX has outstanding the following securities: 500 shares, nil warrants and nil stock options.
  • The exchange ratio for the Transaction will (subject to adjustment for the Bridge Loan (defined below)) result in existing shareholders of Jetlines holding 49% of the common and variable voting shares of the Resulting Issuer (“Resulting Issuer Shares”) and shareholders of GLOBALX holding 51% of the Resulting Issuer Shares.     

Jetlines Commences Legal Proceedings Against WestJet Co-Founder David Neeleman and Affiliates

Provided by Canada Jetlines Ltd/Globe Newswire

VANCOUVER, British Columbia, Nov. 22, 2019 (GLOBE NEWSWIRE) — Canada Jetlines Ltd. (JET: TSX-V; JETMF: OTCQB) (the “Company” or “Jetlines”) announces that the Company has commenced legal proceedings in the United States District Court (District of Connecticut) against David Neeleman, DGN Corporation and Breeze Aviation Group, Inc. for tortious interference with business expectancy and violation of the Connecticut Unfair Trade Practices Act.  The case is No. 3:19-cv-01850.

The Complaint and any subsequent filings in the case will be available for public viewing on the US federal courts’ PACER system, usually within 24 hours of their docketing. The system can be accessed here: https://pcl.uscourts.gov/pcl/index.jsf. A copy of the Complaint is also available at https://jetlines.com/_resources/Complaint-Action-no-01850.pdf. Jetlines will make further announcements on the case in due course.

Jetlines Provides Operations Update

Provided by Canada Jetlines Ltd./Globe Newswire

VANCOUVER, British Columbia, Oct. 08, 2019 (GLOBE NEWSWIRE) — Canada Jetlines Ltd. (JET: TSX-V; JETMF: OTCQB) (the “Company” or “Jetlines”) is pleased to provide a further update on its advancement of operations and corporate matters.

Jetlines recently signed a 7-year agreement with Jeppesen to supply the Enroute, Approach Navigation Charts and Airway Manuals. This information is delivered to each pilot’s Electronic Flight Bags digitally by Jeppesen FliteDeck Pro, the industry’s leading navigation app. Jeppesen is a market leader and has been providing accurate navigation information for more than 80 years.

The Company also commenced talent-based hiring assessments for Pilots, Flight Attendants and other Leadership Positions in the beginning of September. These specifically designed and broadly used Gallup assessments will evaluate and identify the individuals to be invited to personal interviews once Jetlines enters into that phase of the hiring process. Jetlines intends to employ the Gallup processes to help it build an exceptional workplace, focusing on talent, mission-driven work, world-class managers and strengths-based development.

Gallup is a global analytics and advice firm that helps leaders and organizations solve their most pressing problems – they have more data and insights on the attitudes and behaviors of employees, customers, students and citizens than any other organization in the world.

The Company also announces that it has agreed to settle debts owing to arm’s length third party (the “Creditors”) through the issuance of common and variable voting shares of the Company (the “Debt Settlements”). Pursuant to the Debt Settlement, the Company would issue 738,094 common and variable voting shares of the Company (the “Shares”). The issuance of the Shares to the Creditors is subject to the approval of the TSX Venture Exchange. All securities issued will be subject to a four month hold period which will expire on the date that is four months and one day from the date of issue.

Jetlines Provides Financing Update

Provided by Canada Jetlines Ltd./Globe Newswire

VANCOUVER, British Columbia, Sept. 30, 2019 (GLOBE NEWSWIRE) — Canada Jetlines Ltd. (JET: TSX-V; JETMF: OTCQB) (the “Company” or “Jetlines”) is providing an update on its financing progress. The Company has made significant advancements towards launching commercial airline operations which have been detailed in prior news releases. Commercial agreements have been concluded with airports, suppliers, service providers and other key stakeholders. Jetlines has also made progress in the licensing process through the submission of operations manuals and licensing documents to Transport Canada and the Canadian Transportation Agency. However, the completion of the financing required to launch airline operations remains critical to Jetlines continued advancement and launch.

With regards to financing efforts, Jetlines is currently discussing the opportunity with a number of institutions whose investments would be sufficient to launch operations. At this time, Jetlines’ partners at SmartLynx Airlines SIA and InHarv ULCC Growth Fund (“InHarv”) remain committed to seeing Jetlines through the financing process. Jetlines intent is to convert investor interest into financing commitments, but it cannot provide any assurances that this will occur. Jetlines will provide further updates to the market with respect to its financing efforts through future news releases.

Jetlines Confirms SmartLynx Commitment and Provides Commercial and Operational Updates

Provided by Canada Jetlines Ltd/Globe Newswire

VANCOUVER, British Columbia, Sept. 03, 2019 (GLOBE NEWSWIRE) — Canada Jetlines Ltd. (JET: TSX-V; JETMF: OTCQB) (the “Company” or “Jetlines”) announces that SmartLynx Airlines SIA (“SmartLynx”) remains committed to Jetlines and has agreed to extend the funding milestone under the definitive subscription agreement. The new deadline is September 30, 2019, such completion date subject to further extension or waiver by SmartLynx based on its assessment of corporate progress (see update below on commercial and operational progress).

As specified in the Company’s press release of July 8, SmartLynx will provide $7.5 million in financing under the terms of a convertible debenture. The amended offering terms were set to match the financing terms agreed to with InHarv ULCC Growth Fund (“InHarv”). Please refer to the Company’s press releases dated July 8, 2019 and July 30, 2019 for further information on the SmartLynx financing.

Mark Morabito, Executive Chairman, commented “I am pleased that SmartLynx has elected to push out our funding milestone and would like to thank both SmartLynx and InHarv for their continued support as true partners of Jetlines. It is important to remember that SmartLynx specializes in full-service ACMI (Aircraft-Crew-Maintenance-Insurance) aircraft lease services and is the leading ACMI provider in Europe for Airbus A320 aircraft. SmartLynx aircraft have been utilized by major airlines including Norwegian, EasyJet, Thomas Cook and TUI and its partnership with Jetlines extends not only through SmartLynx’ s investment, but also through SmartLynx’ s ability to contribute its years of experience in airline operations, aircraft leases, maintenance operations and other matters to help Jetlines succeed”.

The Company is pleased to provide an update on significant recent commercial and operational developments.

Commercial

Jetlines has completed the build of its new website and it is ready to sell tickets. Following successful integration by Jetlines ancillary services partners, Booking.com and CarTrawler, the new website enables customers to rent cars and book hotels at very competitive prices, and the Company to maximize ancillary revenues.

In recent months, Jetlines has secured remarkable brand awareness thanks to our new tagline Flying Sucks Less When You Pay Less, and to our Protest in the Sky video-release, which has been viewed by thousands of Canadians. In partnership with award-winning marketing agency Cossette, Jetlines has developed and plans to deploy a launch campaign as soon as the Company receives permission to sell tickets.

Operations

Jetlines continues to advance its Air Operator Certificate (AOC) application with Transport Canada, having now submitted all but one of the required operations manuals. Once operational, the Company is confident that the processes it has defined will enable the airline to exceed the highest safety standards.

The Company has completed the incorporation of most of the required software systems, utilizing the latest in technological automation and cloud platform solutions. In preparation for launch, Jetlines continues to build-out its expert operational team, which now incudes a COO, VP Flight Operations, VP Maintenance, Head of Training, Chief Pilot, Flight Attendant Manager and Safety Manager. 

Jetlines believes that due to proposed consolidations resulting from a surge in M&A activity in the Canadian airline industry, the ULCC market opportunity has never been greater. The Company is looking forward to the Competition Bureau announcing its position on its ongoing investigation into WestJet’s alleged predatory pricing through its subsidiary, Swoop.

The Company continues to make progress on building out the airline and is now closer than ever to starting operations. The Company and SmartLynx are currently reworking the aircraft lease arrangements. However, the final date for airline launch is subject to meeting the financial requirements of Canadian regulatory authorities. The Company will provide further timing updates once the necessary funding commitments have been secured. Please refer to the Company’s management’s discussion and analysis for the six-months ended June 30, 2019 for further information on the SmartLynx aircraft lease agreements.

Jetlines Announces Definitive Subscription Agreement for Amended SmartLynx Financing

Provided by Canada Jetlines Ltd/Globe Newswire

VANCOUVER, British Columbia, July 30, 2019 (GLOBE NEWSWIRE) — Canada Jetlines Ltd. (JET: TSX-V; JETMF: OTCQB) (the “Company” or “Jetlines”) announces that, further to its press release of July 8, 2019, SmartLynx Airlines SIA (“SmartLynx”) and Jetlines have entered into a definitive subscription agreement (the “Agreement”) with respect to the amended terms of the $7.5 million financing by SmartLynx. Under the amended terms of the financing, SmartLynx will provide $7.5 million in financing under the terms of a convertible debenture. The amended offering terms are set to match the financing terms agreed to with InHarv ULCC Growth Fund (“InHarv”).

Details of the Offering

The terms of the offering (the “Offering”) are set out in the Agreement between SmartLynx and Jetlines. The Offering will consist of 7,500 units (each, a “Unit”), with each Unit comprised of one $1,000 principal amount 10.00% senior secured convertible debenture of Jetlines (each, a “Debenture”) and 2,439.02439 variable voting share purchase warrants (each, a “Warrant”), and with each Warrant entitling the holder thereof to acquire one variable voting share of Jetlines (each, a “Warrant Share”) at a price of $0.41 per Warrant Share for a period of 36 months from the date of closing. The Company will issue a total of 18,292,682 Warrants to SmartLynx as part of the Units subscribed for by SmartLynx.

The terms of the Debentures include:

  • a maturity date on such date that is 36 months from the date of issuance of the Debentures (the “Maturity Date”) and the principal amount of the Debentures (the “Principal Amount”), together with any accrued and unpaid interest thereon, will be payable on the Maturity Date, unless earlier converted in accordance with its terms;
  • each draw of the Principal Amount will accrue interest (“Interest”) from the drawdown date of such draw at the rate of 10% per annum, which Interest will be payable in cash annually on the anniversary date of the drawdown date of such draw, and on the conversion date or the Maturity Date, as the case may be;
  • all or a portion of the Principal Amount outstanding is convertible into variable voting shares of the Company (each, a “Share”) at the option of the holder at a conversion price of $0.41 per Share; and
  • the Debentures are subject to an origination fee of 5%, payable in Shares on each drawdown date at an issue price equal to the market price at the time of such drawdown date.

The funds will be available for drawdown based on the satisfaction of certain conditions.

The gross proceeds of the Offering will be released after Jetlines achieves certain milestones as described below. $5.25 million (70%) of the proceeds shall be released upon the Company raising additional funds (the “Funding Milestone”) from a subsequent financing by September 1, 2019 (such completion date subject to waiver by SmartLynx). The Funding Milestone will be calculated by adding the amount realized through the exercise of previously issued warrants since November 1, 2018 and the final amount committed under the InHarv financing at closing, and subtracting that total number from $40 million. In addition, the Company will be required to receive from the Canada Transportation Agency an order allowing it to sell tickets for airline travel.

The remaining $2.25 million (30%) of the proceeds shall be released upon the receipt by Jetlines Operations of its air operator certificate from Transport Canada.

The obligation of the Company to repay the Principal Amount and all unpaid Interest thereon to SmartLynx will be secured by a security interest granted by Jetlines to SmartLynx over all of the Company’s present and after-acquired property pursuant to a general security agreement to be entered into. These financial terms match the terms agreed to with InHarv. The Company intends to close both the InHarv and SmartLynx financings concurrently, with an expected closing date in August, 2019.

Certain aspects of the relationship between the parties will continue to be governed the framework agreement (the “Framework Agreement”) entered into by the parties in December 2018. The Framework Agreement covers matters including the right of SmartLynx to appoint a single Board member to the Company and Jetlines Operations, rights to participate on Board committees, arrangements regarding the review of aircraft leases, the grant of a pro-rata right to SmartLynx to participate in future financings and certain other rights detailing with operational and expenditure matters of the Company and Jetlines Operations. Certain consequential amendments will be made to the Framework Agreement to reflect the new terms of the Offering.

The closing of the Offering is conditional upon the satisfaction of conditions to closing that will be contained in the Subscription Agreement. These conditions will include, among other things, approval of the TSX Venture Exchange for the Offering, execution of definitive documentation, disinterested shareholder approval and the receipt of all other necessary consents, approvals and authorizations required by either party.

Option Grant

The Company has granted 225,000 stock options to a director of the Company. The stock options have been issued for a five-year term, with one quarter vesting every six months from the date of grant.

Jetlines calls out the lack of Canadian Airline Competition with First-Ever Protest in the Sky

Provided by Canada Jetlines Ltd/Globe Newswire

The ultra-low-cost carrier is encouraging Canadians to sign a petition to show they want increased competition and decreased airfares

VANCOUVER, British Columbia, July 25, 2019 (GLOBE NEWSWIRE) — Canada Jetlines Ltd. (JET: TSX-V; JETMF: OTCQB) (the “Company” or “Jetlines”), the first ultra-low-fare carrier in Canada has staged a protest in the one place the airline duopoly think they own: the sky. Using four planes, 18 skydivers and the Jetlines CEO, an airborne protest was staged to call out the lack of Canadian airline competition. This act was to rally Canadians, investors and the Competition Bureau around the idea of increased competition and decreased airfares.

The ultra-low-fare carrier is encouraging people to go to Jetlines’s website fightback.jetlines.ca/and sign an online petition that will be presented to the Canadian Competition Bureau, the government agency that ensures markets operate in a competitive manner to prevent abusive monopolistic practices. While several airlines have attempted to enter the Canadian market, the duopoly has pushed them out with short-term match-pricing at prices below their avoidable costs. Thus far, Canada’s Competition Bureau has done little to rectify this issue. The Competition Bureau is currently investigating WestJet and their subsidiary new airline for “predatory pricing” to undercut new entrants. Under Canada’s competition laws, predatory pricing occurs when an incumbent with market power sets its prices below avoidable costs.

“Canadians pay among the highest airfares in the world and we’re the only developed country without an ULCC as two high cost airlines control approximately 85% of the domestic market,” says Javier Suarez, CEO for Jetlines. “We know Canadians are fed up as there are between five and six million passenger trips per year by land over to the US each year to fly on US low cost carriers, based out of northern US airports, that in many cases only operate from those airports due to the robust Canadian passenger traffic. We’re urging consumers to go online and to show their support for more competition and lower fares in Canada.”

The entrance of Jetlines has the potential to dramatically reduce airfares for Canadians on a long-term, sustainable basis. In just two decades, the ultra-low-cost carrier (ULCC) model has proven to be highly profitable and successful throughout the world. They generate economic growth but most importantly, they give consumers the freedom to travel more often. While more of these airlines are taking off, Canada has not tapped into the high demand for this kind of travel due to the anti-competitive environment of the existing Canadian duopoly. As a consequence, there is a lack of competition, that drives up prices, making consumers suffer.

Jetlines Provides Operations Update

Provided by Canada Jetlines Ltd./Globe Newswire

VANCOUVER, British Columbia, July 24, 2019 (GLOBE NEWSWIRE) — Canada Jetlines Ltd. (JET: TSX-V; JETMF: OTCQB) (the “Company” or “Jetlines”) is pleased to provide an update on recent operational developments related to Jetlines’ build out in preparation for launch.

Talent-Based Hiring

Jetlines signed an agreement with Gallup, Inc. (“Gallup”) to optimize its talent-based hiring. Through the delivery of Gallup’s hiring analytics and advice, Jetlines is assessing and working to hire the best pilots, flights attendants and operational leaders in the industry.

Combining more than 80 years of experience with their global reach, Gallup knows more about the attitudes and behaviors of employees, customers, students and citizens than any other organization in the world. In addition to role-based assessments, Gallup’s Hiring Analytics practice provides support and strategy before and after the interview to attract the right candidates, create workforce alignment and streamline the hiring experience.

Kelly Bacon, Partner of Gallup, commented, “Employees are no longer satisfied with clocking in and out and receiving a paycheck. They are looking for meaning in their work, a supportive, collaborative environment, and an employer that can match the lifestyle they want to enjoy. Gallup has an unparalleled, research-based understanding of what defines excellence in nearly every imaginable role, and we are excited to partner with Jetlines to use that expertise to hire the Company’s pilots and flight attendants.”

Document & Communication Management

Jetlines signed an agreement with Comply365, Inc. (“Comply365”) for its document management platform that will be used to deliver critical operational content to Jetlines’ mobile workforce. Comply365 was selected by Jetlines to ensure a compliant and efficient operation. The Comply365 cloud platform will allow Jetlines to focus on growing its operation, without worrying about IT support requirements.  Currently, Comply365 is utilized by 8 of the top 10 North American Airlines supporting over 15 million flights worldwide annually.

Tom Samuel, CEO of Comply365 said, “We are excited to welcome Jetlines to our growing list of global customers. It is very neat to see an airline at such an early stage of their growth story making targeted investments in technology solutions that will support their anticipated growth.”

Jyri Strandman, Jetlines COO commented, “We are investing in proven processes and cutting-edge tools in every area of the operation to drive down the cost. We are partnering with Gallup to start evaluating and hiring the best fitting, talented and motivated team members; with Comply365 to provide our team members the best tools to maintain up-to-date documents and prepare for the flights, leading to highest degree of regulatory compliance and safety. Every automated system is integrated fully, removing time-wasting process steps, freeing up our frontline people to provide warm, friendly and personable air travel at great value prices.”

Jetlines Announces AGM Results

Provided by Canada Jetlines Ltd/CNW

VANCOUVER, British Columbia, June 27, 2019 (GLOBE NEWSWIRE) — Canada Jetlines Ltd. (JET: TSX-V; JETMF: OTCQB) (the “Company” or “Jetlines”) reports that the nominees listed in the management information circular for the 2019 Annual General and Special Meeting of shareholders were elected as directors of Jetlines. Detailed results of the vote for the election of directors held at the Annual General and Special Meeting on June 26, 2019 in Vancouver, B.C., are set out below:

 

 
% Votes For% Votes Withheld
Mark J. Morabito99.45%0.55%
Deborah Robinson99.63%0.37%
Réjean Bourque99.37%0.63%
Jason Grant99.57%0.43%
Saad Hammad99.13%0.87%
Tony Lefebvre99.11%0.89%
Alan Bird97.61%2.39%
Zygimantas Surintas97.22%2.78%

Shareholders at the Annual General and Special Meeting also approved the appointment of Jetlines’ auditors, the SmartLynx Private Placement, the InHarv Private Placement, the Amended Articles and By-Laws, the Amended Stock Option Plan, the Amended Restricted Share Unit Plan and the Amended Performance Share Unit Plan.

Jetlines Appoints ULCC Veteran as Chief Operating Officer

Provided by Canada Jetlines Ltd/Globe Newswire

VANCOUVER, British Columbia, June 25, 2019 (GLOBE NEWSWIRE) — Canada Jetlines Ltd. (JET: TSX-V) (the “Company” or “Jetlines”) is pleased to announce the appointment of Mr. Jyri Strandman as Chief Operating Officer, effective July 1, 2019. Jyri is a seasoned aviation veteran with over 30 years experience in the aviation industry and has held senior positions with ultra-low cost carrier (ULCC) leader Spirit Airlines.

“I am very pleased that Jyri has agreed to join Jetlines full-time as Chief Operating Officer. We are lucky to have access to someone of his caliber and experience. Having held progressively senior positions with one of the market leaders, Jyri truly understands the ultra-low cost model and will assist Jetlines with its goal of being the lowest cost operator in Canada,” commented Javier Suarez, CEO of Jetlines.

Jyri comments; “It is a great privilege to lead our capable operations teams from buildup to actual start of operations, deploying high degree of fully integrated automation. It frees up our passionate team members to serve our flyers genuinely, thoughtfully and kindly. While our product is distinctly fun and light-hearted, we are fiercely revved up and committed to liberating Canadians from overpriced air travel. We look forward to sharing our contagiously energetic and positive brand experience in tangible ways. This is not a job, but a mission; to provide a real value proposal to the millions, so they can reach and experience new destinations.”

Jyri most recently held the position of COO at GoAir, an Indian low cost carrier. As the Accountable Manager, he was responsible for operational control, regulatory oversight and the operations departments of the airline; Maintenance and Engineering, Airport Operations, Flight and Inflight Operations, Rostering, Dispatch and Safety.

Prior to GoAir, Jyri held progressively senior roles with Spirit Airlines, the leading ULCC in the US, the Caribbean and Latin America. He carried dual roles as Vice President of Flight Operations and Director of Operations, responsible for operational control and regulatory oversight of the airline, including all the regulatory training programs and FAA relationship. Under Jyri’s leadership, the operational teams successfully introduced 76 additional Airbus A320 family aircraft, including the first Sharklet equipped A320 and the first North American A320 neo. Prior to these roles, he served as the Director, Flight Training and Standards, leading the redesign of pilot training programs and new manual sets, both creating safety, functional flexibility and efficiency in the operational environment.

His prior 20 years of experience include increasing responsibility in training and operations roles at Virgin America and American Eagle Airlines. Jyri is a highly experienced captain, training and check pilot, and pilot examiner on the Airbus A320 family, also having served in the same capacities in many other aircraft with over 12 400 hours of flight time.

In connection with his appointment, Mr. Strandman will receive a grant of 500,000 Restricted Share Units (“RSUs”). The RSUs vest over a three-year period from the date of grant, with one third vesting at the end of each year during the three-year period.