MONTREAL - Canadian budget carrier Jetsgo Friday grounded all of its planes, left passengers stranded and sought bankruptcy protection, becoming the latest casualty of cut-throat competition in the airline industry.
The airline, which is also facing a government probe over safety procedures, told passengers in the early hours of Friday there would be no Jetsgo planes nor ground staff when they showed up at airports.
Airline bosses said tough market conditions sparked by fierce competition in the Canadian airline industry had forced their hand.
"We deeply regret that this had to happen," said Jetsgo President Michel Leblanc.
"We are very concerned about our customers and the significant hardship that this action causes. In the meantime, we encourage our passengers to contact their travel agent or an alternative airline."
Jetsgo, which was locked in a battle for market share with another low-price airline WestJet, said it would immediately ask Quebec`s Superior Court for protection from creditors.
The airline, known for daring promotions like selling some flights for a dollar, flew to around 30 destinations in Canada and the United States.
Its slump into bankruptcy comes as Canada`s flag carrier Air Canada consolidates after emerging from its own insolvency crisis.
The Canadian government said that it had asked other airlines and the country`s VIA Rail intercity service to lay on extra services for stranded travellers.
Transportation Minister Jean Lapierre told reporters in Ottawa that Jetsgo fell victim of competition in the airline industry which has benefited passengers through lower fares.
"In competition, sometimes you survive and sometime you die," said Lapierre. "Competition is what it is all about."
Efforts to funnel stranded passengers onto other flights were complicated by the fact that Jetsgo`s failure came on the eve of March break, one of the year`s busiest travel periods with many scheduled services already full.
Jetsgo`s descent into bankruptcy came on the day that several Canadian media reports said that the Transportation Safety Board of Canada had launched a probe into a botched landing in January in the western city of Calgary.
A Jetsgo plane reportedly tried to make a landing in fog, but veered off the runway and hit a sign, before the pilot performed a "missed approach" pulling the plane up and trying another approach before landing safely.
03/11/2005 15:07 GMT