The Ethics of Bankruptcy: Jetsgo Corporation Case Study
Case Analysis: The Ethics of Bankruptcy: Jetsgo Corporation
Team 4 1.) Summary:
Jetsgo was a private company owned by Michel Leblanc. Leblanc had lived his life around airplanes. In 1991, he and a partner started Royal Aviation Inc., which he sold in 2001 for $84 million in stock to Canada 3000. Although he was subsequently sued by Canada 3000 for providing inaccurate financial information, the case was never tried because Canada 3000 went into bankruptcy protection in November 2001. In June 2002 he launched Jetsgo as a discount airline. Within two-and-half years it grew to become Canada's third-largest airline, moving approximately 17,000 passengers per day on its fleet of 29 airplanes, 15 of which were company-owned Fokker F100s. With 1,200 employees, the company serviced 20 locations in Canada, a dozen in the Caribbean, and 10 in the United States. On Friday March 11, 2005. Just before the busy Spring-break travel week, Jetsgo entered bankruptcy protection thus stranding thousands of passengers who could not return home and annoying those who could not leave on their spring-break holiday. Throughout its short life, Jetsgo was plagued with both financial and maintenance problems. From 2002 to 2005 it filed a total of 60 incident reports with transportation Canada. In November 2002 Transport Canada inspectors found 23 non-conformance items with the airline. In February 2005, Transportation Canada placed restrictions on Jetsgo. On March 8 they said that operations would be suspended on April 9 if maintenance problems were not addressed. Three days later on March 11 the company ceased operations. The company also had financial and cash flow problems losing $22 million in the first 3 months of 2005. On March 7, one day before Transportation Canada’s restrictions, they were forced to pay $1.25 million to NAV Canada to prevent the seizure of company planes. Leblanc decided to close down operations at midnight on Thursday March 10, making the public
Team 4 1.) Summary:
Jetsgo was a private company owned by Michel Leblanc. Leblanc had lived his life around airplanes. In 1991, he and a partner started Royal Aviation Inc., which he sold in 2001 for $84 million in stock to Canada 3000. Although he was subsequently sued by Canada 3000 for providing inaccurate financial information, the case was never tried because Canada 3000 went into bankruptcy protection in November 2001. In June 2002 he launched Jetsgo as a discount airline. Within two-and-half years it grew to become Canada's third-largest airline, moving approximately 17,000 passengers per day on its fleet of 29 airplanes, 15 of which were company-owned Fokker F100s. With 1,200 employees, the company serviced 20 locations in Canada, a dozen in the Caribbean, and 10 in the United States. On Friday March 11, 2005. Just before the busy Spring-break travel week, Jetsgo entered bankruptcy protection thus stranding thousands of passengers who could not return home and annoying those who could not leave on their spring-break holiday. Throughout its short life, Jetsgo was plagued with both financial and maintenance problems. From 2002 to 2005 it filed a total of 60 incident reports with transportation Canada. In November 2002 Transport Canada inspectors found 23 non-conformance items with the airline. In February 2005, Transportation Canada placed restrictions on Jetsgo. On March 8 they said that operations would be suspended on April 9 if maintenance problems were not addressed. Three days later on March 11 the company ceased operations. The company also had financial and cash flow problems losing $22 million in the first 3 months of 2005. On March 7, one day before Transportation Canada’s restrictions, they were forced to pay $1.25 million to NAV Canada to prevent the seizure of company planes. Leblanc decided to close down operations at midnight on Thursday March 10, making the public