Canada Jetlines will delay its launch while federal regulators decide if one of its main competitors is using predatory pricing to stop the airline from gaining a foothold in the market. Canada Jetlines announced last week that it would not make its Dec. 17 launch date because jittery investors were worried that WestJet subsidiary Swoop was going to try to quash the airline before it could get started. Canada’s Competition Bureau is now looking into whether Swoop is intentionally losing money on some routes to price Jetlines out of the market.
In a statement, the company said two major investors pulled out because they believe WestJet will “react very aggressively once the company starts operations, and in fact have already done so in anticipation of Jetlines entry into the market.” The loss of the investors left Canada Jetlines about $40 million short of cash to get the airline into operation but if and when that money becomes available, the launch can be rescheduled. “We have built as much as anybody can without access to more capital. We have invested in bringing on board the most talented people who have done an incredible job putting together our operations manuals and systems, our brand, website and all other commercial components needed for launch,” said Executive Chairman Mark Morabito.