Leblanc wants to start eastern no-frills airline

Michel Leblanc, the former head of Royal Aviation who sold his company to now-defunct Canada 3000, said he wants to launch a new no-frills airline in eastern Canada to compete with Air Canada.

"Over the past week I have received many expressions of support from former employees, potential investors, former suppliers, and major aircraft lessors," Leblanc said in a release issued Tuesday morning.

"Given the demise of Canada 3000 and the complete lack of domestic competition in eastern Canada, we see an expanded opportunity," he said.

No further details about Leblanc's plans were immediately available.

Leblanc said he is finalizing the details of a business plan that would be based on the low-fare, no-frills service Southwest Airlines model the same business plan successfully adopted by Calgary's WestJet Airlines.

If Leblanc does set up his new carrier, he will be moving to fill a hole in the eastern Canadian airline sector before WestJet can move in. In the wake of Canada 3000's failure, Clive Beddoe, WestJet's president, indicated his company plans to add 40 per cent more capacity in 2002, with much of that growth in the eastern part of the country.

WestJet has slowly expanded out from its western base and continues to post profits despite the hit to airline traffic in the wake of Sept. 11.

Leblanc said he is slated to meet with stakeholders about his plan and said he hoped to make another announcement by next week.

Last Wednesday, Leblanc offered $49 million including the assumption of $24 million of Royal Aviation's debt to reacquire his former company. He said that was "fair market value" for the company's assets.

But after Canada 3000 filed for bankruptcy on Sunday, Leblanc said he would revise his original offer.

Creditors, former employees and the court-appointed receiver for Canada 3000 were due to meet in a Toronto court on Tuesday as the likely division of the grounded airline's assets began.

Leblanc isn't the only person said to be eyeing chunks of Canada 3000. A lawyer for the receiver, Deloitte & Touche, said more than one party is interested in parts of the airline.