Jetsgo declares bankruptcy

Discount airline Jetsgo, which abruptly ceased operations in mid-March, declared bankruptcy on Friday.

Discount airline Jetsgo, which abruptly ceased operations in mid-March, declared bankruptcy on Friday.

The company, which had been in creditor protection since it stopped flying, could not get some creditors to agree to a restructuring plan.

Lawyers for the company were in court on Friday seeking an one-week extension of its creditor protection so it could finalize a business plan. However, creditors refused to wait and said they would petition Jetsgo into bankruptcy.

Michel Leblanc, the company's founder, was reported to have set June 25 as a target to resume operations. Media reports said Leblanc planned to use eight leased aircraft to get restarted and rely on selling company-owned aircraft to cut debt.

A return to the skies was mentioned as a possibility when Jetsgo's court-appointed monitor filed its first report on a potential restructuring in mid-March.

Jetsgo ceased operations on March 11, stranding about 17,000 travellers.

Since Jetsgo ceased operations, Air Canada and WestJet have reported stronger passenger traffic.