...just thought this was an interesting article about a Canadian carrier. IABD Cdn Discount Airline Jetsgo Facing New Pressures
By Monica Gutschi
Of DOW JONES NEWSWIRES
TORONTO (Dow Jones)--Discount carrier Jetsgo may see its operating costs rise slightly after Transport Canada revoked a newly issued certificate that allows the airline to fly at optimum efficiency levels.
Jetsgo spokesman Brad Cicero confirmed the Montreal-based airline had its Reduced Vertical Separation Minimum, or RVSM, certificate revoked last Friday. He said government regulators deemed the operations manual didn't comply with the new RVSM regulations, which came into effect in late January. The manual now needs to be updated.
"It's just a matter of changing a few written remarks in the manuals," he said, which should be completed by next week.
But in the meantime, the lack of an RVSM certificate means Jetsgo's aircraft must fly below 29,000 feet, reducing their fuel efficiency. The RVSM allows aircraft flying between 29,000 and 41,000 feet to fly with only 1,000 feet of separation rather than the previous 2,000 feet.
Cicero said the limitation on "optimum" flight levels would have a "marginal increase" in costs, as it could mean some aircraft will have to carry more fuel depending on the length of flight and number of passengers.
TD Newcrest analyst Brian Morrison said the temporary loss of the RVSM certificate "is yet another data point that should have a negative impact upon the financial position of Jetsgo."
He said that at least one Jetsgo flight had to make a refueling stop Monday before reaching its final destination.
Increased fuel consumption is a "competitive disadvantage," Morrison said, given the high price of jet fuel and Jetsgo's older and less fuel-efficient fleet.
As well, Morrison noted that could lead to "costly" refueling stops on transcontinental flights and may affect on-time performance, hurting customer satisfaction and potentially load factors.
TD Newcrest's Morrison said there appear to be numerous signs of financial challenges facing Jetsgo, including the airline's recent decision to forgo disclosing its monthly load-factor data. There have also been highly publicized incidents such as a botched landing in Calgary that could have heightened Transport Canada's vigilance, and a public-relations disaster at Christmas when numerous passengers were left stranded, hurting the airline's image with customers.
Morrison also pointed to the airline's sale of one of its recently acquired Fokker 100 aircraft as potentially signalling a need for additional cash.
!
