Canada Jetlines sues WestJet co-founder Neeleman over damaging interference

Canada Jetlines sues WestJet co-founder Neeleman over damaging interference

Canada Jetlines Ltd. says it is suing WestJet Airlines co-founder David Neeleman in the United States for allegedly interfering in the fledgling discount carrier’s efforts to get off the ground.

Executive chairman Mark Morabito said it launched legal proceedings in the U.S. district court in Connecticut against Neeleman, DGN Corp. and Breeze Aviation Group, for “tortious interference with business expectancy and violation of the Connecticut Unfair Trade Practices Act.”

In a statement of claim, it alleges Neeleman and his affiliates embarked on “a predatory scheme” to destroy the relationship between Jetlines and an international investment bank that ultimately terminated its help in raising new capital to start the airline.

It claims the defendants induced Jetlines CEO Lukas Johnson to participate in secret communications and meetings in order to lure him away to help Neeleman’s own new airline venture called Moxy, which is to be owned and operated by Breeze Aviation. The allegations have not been proven in court and Neeleman couldn’t be immediately reached for comment.

Jetlines said Johnson misled it and the bank about his commitment to the airline, its financing effort and launch and then resigned on Aug. 27, 2018, just as it was poised to approach prospective investors.

“Defendants conspired with Johnson to mislead Jetlines and the bank into believing that Johnson was fully committed to Jetlines’ future and to seeing its financing effort and operational launch through to their conclusion, even as defendants were working secretly with Johnson to engineer his departure at the point in time most likely to injure Jetlines,” said the court filing.

“Neeleman’s overriding purpose in that deception was to derail Jetlines’ relationship with the bank and thereby to delay and hinder Jetlines from obtaining new financing and commencing operations as a Canadian ULCC. In that, he succeeded.”

Johnson’s departure prompted the bank to immediately suspend efforts to get new financing for Jetlines, saying Johnson’s departure was a big blow to the company that may not be overcome. It terminated its support on Dec. 8, 2018.

“Neeleman’s intentional interference with Jetlines’ relationships with Johnson and the bank has caused substantial damage to Jetlines. Among other things, Jetlines’ reputation in the airline and financial industries, and with prospective investors was injured.”

The company said its inability to obtain crucial financings forced it to terminate aircraft leases, causing it to lose US$2.2 million in non-refundable deposits.

Vancouver-based Canada Jetlines announced last month that it was postponing its planned December launch and laying off most employees after failing to secure $40 million in required financing and losing investment partners.

The company has also said it has been difficult to engage investors because they believe WestJet Airlines, which owns discount carrier Swoop, will “react very aggressively once the company starts operations, and in fact have already done so in anticipation of Jetlines entry into the market.”

Canada Jetlines says a market analysis it retained has found evidence that Swoop is pricing significantly lower than other discount carriers and below avoidable costs on the routes identified by a Competition Bureau investigation.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alberta Chief Medical Officer of Health Dr. Deena Hinshaw said the province needed to make a change to school reporting. (photo by Chris Schwarz/Government of Alberta)
Province makes changes to school COVID-19 case reporting

The Alberta Government is altering the way it reports COVID-19 cases in… Continue reading

(Red Deer Advocate file photo)
Sentencing delayed in the stabbing death of Samantha Sharpe, of Sunchild First Nation. (Red Deer Advocate file photo)
Red Deerians woke up to snow Tuesday. This snowplow was working its way up 32nd Street. Plows and sanders were tackling hills, bridges and arterial routes first. Advocate staff photo
City of Red Deer plows moving to grey routes Friday

Residents do not need to move vehicles

Alert logo
Camrose man arrested on child porn charges

A 20-year-old from Camrose man is facing charges for allegedly distributing child… Continue reading

Public Services and Procurement Minister Anita Anand and Major General Dany Fortin look on as Prime Minister Justin Trudeau responds to a question during a news conference in Ottawa, Monday, Dec. 7, 2020. THE CANADIAN PRESS/Adrian Wyld
Pfizer-BioNTech cutting back vaccine deliveries to Canada due to production issues

OTTAWA — Procurement Minister Anita Anand says production issues in Europe will… Continue reading

Lesser Slave Lake UCP MLA Pat Rehn. (Facebook)
Updated: Jason Kenney kicks Lesser Slave Lake MLA out of caucus

Pat Rehn will not be permitted to run for UCP nominations

Prime Minister Justin Trudeau listens to a question during a news conference outside Rideau cottage in Ottawa, Friday, January 8, 2021. THE CANADIAN PRESS/Adrian Wyld
Trudeau says Canada’s COVID vaccine plan on track despite Pfizer cutting back deliveries

Canadian officials say country will still likely receive four million doses by the end of March

letter
Coal mining a concern

Thank you for the Canadian Press article in the Advocate on Jan.… Continue reading

In this photo taken from a video distributed by Russian Defense Ministry Press Service, on Wednesday, Dec. 9, 2020, A Russian Tu-160 strategic bomber fires a cruise missile at test targets, during a military drills, Russia. The Russian military has conducted sweeping drills of its strategic nuclear forces that featured several practice missile launches. (Russian Defense Ministry Press Service via AP)
Russia follows US to withdraw from Open Skies Treaty

U.S. completed its withdrawal from the pact in November

FILE - In this July 26, 2019, file photo, China’s Sun Yang leaves the pool deck following the men’s 4x200m freestyle relay heats at the World Swimming Championships in Gwangju, South Korea. The World Anti-Doping Agency says a Swiss court has overturned an eight-year doping ban against Chinese swimmer Sun Yang and ordered the case back to the Court of Arbitration for Sport for a second time but with a different chairman of the judges. (AP Photo/Mark Schiefelbein, File)
Swiss supreme court details anti-China bias of Sun judge

Hostile social media posts by Court of Arbitration for Sport judge Franco Frattini

FILE - In this Saturday, March 7, 2020, file photo, Minnesota Wild defenseman Matt Dumba passes the puck during the first period of an NHL hockey game against the Los Angeles Kings in Los Angeles. Bonding between veterans and youngsters has been a time-honored tradition in hockey. But in yet another setback related to the relentless COVID-19, NHL protocols aiming to curb the virus spread and keep the schedule on track could make that vital off-ice development of camaraderie more difficult. (AP Photo/Mark J. Terrill, File)
Mentors wanted: Virus limits vet-rookie time away from rink

Bonding between veterans and youngsters has been a time-honoured tradition

FILE - In this Jan. 30, 2020 file photo, NFL Super Bowl 54 football game halftime performer Jennifer Lopez answers questions at a news conference in Miami. Lopez will give a musical performance on the West Front of the U.S. Capitol when Biden is sworn in as the nation’s 46th president next Wednesday. (AP Photo/David J. Phillip)
Stars return to inauguration, with J.Lo, Gaga set to perform

Foo Fighters, John Legend and Bruce Springsteen will offer remote performances

An example of a child’s artwork during the COVID-19 pandemic is shown in a handout. Many of the children’s drawings show people alone, haunted by shadowy spectres, or worse, their own thoughts.The researcher behind the childart.ca project says the virtual gallery of illustrations by Canadian kids and teenagers showcases a wide variety of visions of the pandemic. THE CANADIAN PRESS/HO-childart.ca
‘This is too much’: Art shows children’s struggles during pandemic, says researcher

Recurring themes include confined figures, screaming faces and gory imagery

blessing
Bentley Blessing Pantry continues to faithfully serve the community

‘We just wanted to make everyone aware that we are still here to serve you throughout this coming year.’

Most Read