Discount airline still waiting on government approval

A new ultra-low cost airline that plans to have maintenance crews based in Winnipeg says it is frustrated after waiting longer than expected for approval to fly.

In a Monday scrum, Transport Minister Marc Garneau told reporters his office had not yet decided whether to grant an exemption on foreign investment rules to Canada Jetlines.

The company had expected to get word back from his office in August.

Canada Jetlines, based in B.C., applied to be exempted from a rule that says Canadian airlines are only permitted to have a maximum of 25 per cent foreign ownership.

"We are doing our homework right now," Garneau told reporters Monday. "I can tell you that it's an issue that we are looking at."

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In a memo to stakeholders on Monday, Canada Jetlines president and CEO Jim Scott said the airline could not wait much longer to hear from Ottawa. Late last week, he wrote the airline was told a decision "would not be forthcoming."

"As you can imagine, our team was quite frustrated at the news," Scott said.

To satisfy requirements for a federal airline licence, Canada Jetlines needs around $27 million in capital. The company has said it has an interested investor in Europe, but needs the rules relaxed to allow 49 per cent foreign investment.

"Unless an exemption order is granted and a clear timeline provided by the minister in the coming weeks, this opportunity will simply be lost," Scott told stakeholders in the memo. "Neither Jetlines nor its investment partners are in a position to wait for an overall policy change."

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Garneau said Jetlines's request is among "a whole range of issues" to do with air travel his office is looking into, including a similar request from Enerjet, another new Canadian airline.

"We're very conscious of the Jetlines's and Enerjet's request to get an exemption, so it's an issue that's in discussion at the moment," Garneau said.

Garneau was not able to provide a timeline for when the decision will come, and wouldn't say whether the office is leaning towards an exemption or a complete policy change.