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This article was published 18/8/2016 (1884 days ago), so information in it may no longer be current.
OTTAWA — A new discount airline wants to set up a crew hub and airplane-maintenance centre in Winnipeg, but it won’t happen unless Ottawa agrees to exempt the company from a 25 per cent limit on foreign investment in airlines.
Canada Jetlines Ltd., based in Richmond, B.C., hopes to establish itself as an ultra-low-cost carrier in Canada, flying up to 64 domestic and international routes within eight years. Twelve of those routes would be out of Winnipeg, including direct flights to Canadian cities such as Edmonton, Ottawa and Thunder Bay, Ont., and direct flights to American cities including Los Angeles, Las Vegas and Phoenix.
Winnipeg’s central location and the existence of a maintenance industry make it an ideal place for a regional hub for the airline, said Jetlines chief executive officer Jim Scott.
The plan could add 60 new direct jobs to the city within three years and 250 within eight years, once a crew base has been established. Another 1,200 indirect jobs could be created, according to the airline’s plan.
"Winnipeg is a great place for us to stop," Scott said.
Jetlines requires a federal airline licence to operate, something it can only get by showing financing in place to cover 90 days of operations. In Jetlines’ case, the Canadian Transportation Agency says that is $27 million.
Jetlines said it has an investor lined up that would allow it to hit that target and get planes in the sky within six months, but that investor is not from Canada, and such involvement would exceed the 25 per cent limit on foreign investment in airlines.
In May, the airline applied to Transport Minister Marc Garneau for an exemption to the limit.
Meanwhile, Garneau is studying a recommendation to raise the foreign-investment cap to 49 per cent from 25 per cent. The recommendation was made in a December report to government on the future of Canada’s transportation system.
Conservative transport critic Kelly Block said her party supports the change, particularly as it will increase options for Canadians who live in secondary markets that are not well-served by existing airlines.
Last month, Winnipeg Airports Authority CEO Barry Rempel wrote Garneau in support of a raised investment limit as a way to encourage growth in the airline industry.
"This is the kind of thing which will help our economy grow," Rempel told the Free Press in a phone interview.
A bilateral agreement with Europe on the airline industry cannot be fulfilled without raising the investment limit, said Rempel. The agreement should allow more access to the European market for Canadian airlines, as well as bring more European carriers to Canada.
He said tourism marketers in Winnipeg fight to compete with cities travellers can reach more quickly via direct routes because tourists don’t want to have to make two or three connections.
Jetlines has a large stack of letters from airport CEOs, mayors and other community leaders asking Garneau to raise the limit or, at least, give Jetlines an exemption from it.
Garneau’s spokeswoman said the minister had no comment on the application.
A spokesman from the department said in an email, "The Canada Transportation Act authorizes the minister to provide an exemption when it is in the public interest. Transport Canada is currently reviewing the request by consulting stakeholders and evaluating the public interest."
Scott said he would like to see the overall policy changed, but that could take years. He said his company doesn’t have that kind of time because its investor will walk away if the limit isn’t changed soon.
Scott hopes a decision might be made this weekend at the cabinet retreat planned for Sudbury, Ont.
"We’re encouraged," he said. "At the beginning, we thought we had a 50-50 chance, but we have had an outpouring of support, and I think we have demonstrated this is in the public interest."
Jetlines would compete with Winnipeg-based NewLeaf Travel, which began flying between 12 Canadian cities July 25 after a delayed start to sort out regulatory issues.
NewLeaf Travel is not considered to be an airline, but a ticket reseller, because it doesn’t lease or own its own planes.
NewLeaf contracts with B.C.-based Flair Air for planes and pilots. As such, NewLeaf isn’t subject to the foreign-investment limit, nor did it have to acquire an airline licence.