Canada Jetlines (AU, Toronto Pearson) has announced it has secured up to CAD15 million dollars (USD11.3 million) in financing from Latvia's ACMI/charter specialist SmartLynx Airlines (6Y, Riga).
On top of the capital injection, SmartLynx will also wet-lease aircraft to Jetlines for the following eight winter seasons. In addition, the airlines will enter into a two-year agreement that will provide Jetlines with services and certain proprietary software meant to support the ULCC during the early stage of their operations.
"This financing transaction with SmartLynx provides further validation of the Jetlines business plan and the need for a true ultra-low cost carrier in Canada. This also provides endorsement from a seasoned European airline that flies aircraft for some of the most successful ultra-low cost carrier airlines in the world," Executive Chairman Mark Morabito said.
SmartLynx CEO Zygimantas Surintas said that he was looking forward not just to providing finances for Jetlines, but also assisting the Canadian start-up with operations, leases, maintenance, and other aspects of running an airline.
The financing includes a firm commitment totalling CAD7.5 million dollars and the option exercisable for a period of twelve months to commit additional up to CAD7.5 million dollars.
Jetlines expects to secure its licence during the first half of 2019, around the time that its first aircraft, two A320-200s, are expected to arrive on lease from AerCap. Once operational, the start-up ULCC plans to lease and/or acquire further aircraft at an average incremental rate of approximately four per year.
SmartLynx together with its subsidiary SmartLynx Airlines Estonia (MYX, Tallinn Lennart Meri) currently operate a fleet of fifteen A320-200s and two A321-200s. Like most European ACMI/charter specialists, SmartLynx sees the utilisation of its aircraft drop significantly during winters.
