Jetsgo, Canada's third-largest airline, ceases operations

Jetsgo grounded its fleet after jet-fuel prices rose by two-thirds in the past year and the company became the target of safety investigations from federal regulators. The shutdown stranded 17,000 customers. "Passengers are advised to make alternative travel arrangements prior to going to the airport as there will be no Jetsgo staff or aircraft available," Jetsgo said in a statement released at two minutes after midnight.

Jetsgo, which employed 1350, will seek permission from a Quebec court to consider options for reorganizing. Jetsgo, led by President Michel Leblanc, spent "big" on ads and expanded too quickly beyond its flight bases in Montreal and Toronto, Raymond James analysts said in January. Leblanc, who started Jetsgo in June 2002, is the former head of Royal Aviation, which he sold for C$84 million in 2001 to Canada 3000 before it went out of business after the 9/11 attacks in New York and Washington.

WestJet [Canada's second-largest airline] stock climbed C$4.33 to C$15.50 after earlier touching C$16.90 [at which peak the shares had risen 51%]. Shares of ACE Aviation [parent company of Air Canada, the nation's largest airline] climbed C$3.26, or 10%, to C$35.50.

Source: Bloomberg

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