An airplane of German air carrier Lufthansa lands at the airline's main hub, the Fraport airport in Frankfurt, March 14 2013. REUTERS/Kai Pfaffenbach
An airplane of German air carrier Lufthansa lands at the airline's main hub, the Fraport airport in Frankfurt, March 14 2013. REUTERS/Kai Pfaffenbach

Canada could be seeing soon on its many runways its first ultra low-cost air carrier as Canada Jetlines Ltd. announced plans of raising $10-million to enlist on the TSX Venture Exchange.

Inovent Capital Inc., a capital pool company, said in a statement it has entered into a letter of intent with Canada Jetlines Ltd. where it will help the aspiring company gain access to the stock market.

The brainchild of aviation veterans Jim Scott, David Solloway and Dix Lawson, Canada Jetlines targets to fly to underserved markets in western Canada like Prince George, Kamloops and Regina, by adopting the ultra low-cost carrier model pioneered by companies like Ryanair and Spirit Airlines.

"You build the airline that people want to fly, not necessarily the airline that would be in your dreams," Dave Solloway, Jetlines president, told the National Post.

"The focus is on low airfares," he added, noting that it is 40 per cent much lower than Air Canada and WestJet.

The proposed transaction between Canada Jetlines and Inovent is subject to the following key conditions:

  • the parties will execute the Transaction Documents by Aug 29, 2014;
  • Jetlines will complete a financing of a minimum of$300,000 and a maximum of $500,000 (the "Bridge Financing") on or before July 18, 2014;
  • Inovent will complete a financing of 20,000,000 shares at a price of $0.50per share on a post-Consolidation basis for aggregate proceeds of $10,000,000 (the "Concurrent Financing"). The Concurrent Financing will close immediately prior to or concurrently with the Proposed Transaction. Further details regarding the Concurrent Financing will be announced in a further news release;
  • the parties will complete due diligence investigations, each to their own satisfaction, on or before Aug 29, 2014;
  • the Proposed Transaction will have received approval of the TSXV and all necessary corporate and shareholder approvals. It is anticipated that the approval of Inovent's shareholders will be required; and
  • receipt of a report of a sponsor in respect of the Proposed Transaction or waiver from the sponsorship requirement by the TSXV. Inovent anticipates applying for a waiver of the sponsorship requirement in reliance upon completion of Concurrent Financing.

Jetlines has raised approximately $1-million so far, according to Solloway. But still needs $40 million to launch their product and services.

The company has hired Euro Pacific Canada as its investment banker to help it bridge that gap.