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Jetlines (Canada ULCC) seeks foreign investors exemption

Thu Jun 16, 2016 8:37 pm

Instead of the current limit at 25%, Jetlines want it to be raised at 49%. Wonder whether they'll succeed with their request? ... nvestment/ ... -exemption
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Re: Jetlines (Canada ULCC) seeks foreign investors exemption

Thu Nov 03, 2016 12:59 pm

This is apparently happening: ... passengers

Marc Garneau, minister for transport of Canada will announce today that the foreign investment rule will be increased to 49%. It looks like Canada Jetlines (as well as Enerjet) will be granted immediate exeptions while the bill is drafted.

This looks like a big move from the government to open Canada to foreign investment in airlines - this may open the door to successful ULCCs in Canada, though of course it remain to be seen if a ULCC can actually be viable in Canada.

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Re: Jetlines (Canada ULCC) seeks foreign investors exemption

Thu Nov 03, 2016 3:24 pm

All the investment in the world won't help an incompetent management team and businessplan.

It's not rocket science. Revenues have to exceed costs. These new entrants will have a very hard time sustainably driving their costs lower than WJ's, especially if WJ decides to get down and dirty and use the #1 strategy available to all airlines when it comes to lowering unit costs: densification. The new entrants lack of prowess in obtaining investment capital over, in some cases, almost the past 5 years, tells me they probably haven't figured out a lot of things, including how to maintain their other temporary advantage: juniority.

I highly doubt this is going to change much in the long term. We're talking a domestic population the size of California with externally generated systemic high costs that are applicable to all who operate in the environment. There are incredibly few cost drivers that will be lower for a new entrant over an established operator, and the incumbents have economies of scale.

Investors hate investing in airlines to see their investment result in the subsidization of airfares for the few months they stay in business.

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