Shareholders of GlobalX Airlines will take majority ownership of upcoming Canada Jetlines under a new plan. The deal will see shareholders own 75% of the startup carrier, while GlobalX only retains a 25% share. Let’s find out more about this proposed deal and how it impacts the two airlines.
In the latest development of the ongoing story of Canada Jetlines, owner GlobalX Airlines has opted to change the carrier’s ownership structure. According to a statement released today, shareholders of GlobalX will receive shares of Jetlines in a 2:1 ratio, i.e., every two shares of GlobalX owned will give holders one share of Jetlines.
The move will see 75% of the airline’s ownership go to GlobalX shareholders, while the company itself will only own 25%. The spinout paves the way for both companies to function as completely separate entities, with their own management and Board of Directors.
The exact date of the transaction is yet to be decided, but GlobalX expects it to be done prior to the end of Q2 this year. The new Jetlines shares will come with escrow and resale restrictions for the first 12 months as well.
Paving the way for Jetlines?
Today’s announcement could be paving the way for Jetlines to finally receive approval from Canadian authorities. The disclosure states,
“Jetlines intends to operate as a Canadian charter airline once applicable regulatory approvals are in place and the Transaction is essential to achieve compliance with foreign ownership and control restrictions applicable to Canadian airlines.”
This could signal that the spinoff will abate any troubles regarding foreign ownership of the Canadian airline (GlobalX is a US-based company). Once approval is received, the airline will once again look to secure private funding to kick off operations.
However, this isn’t the first time Canada Jetlines has signaled its imminent arrival. In 2019, the airline was preparing to take delivery of its aircraft and had even secured slots at Vancouver Airport to kick off operations. However, lack of funding at the last minute resulted in the airline pulling the plug and laying off most of its staff.
Across the border in the US, GlobalX Airlines is all set for its imminent launch. The carrier has already taken delivery of two aircraft this year, an Airbus A320 in January and an A321 in March. GlobalX is continuing with the FAA certification process and is eying adding even more aircraft to its fleet before hopefully kicking off flights later in 2021.
The latest changes to the ownership structure is good news for Canada Jetlines, which has struggled in the last five years. However, considering the airline’s history, there is a lot more to be done before expecting its first flight in the skies.
What do you think about the future of Canada Jetlines? Let us know in the comments!