MONTREAL — FlightHub Group Inc. is entering creditor protection after a Quebec Superior Court judge granted its application, filed as the travel industry reels from the impact of the COVID-19 pandemic.
The Montreal-based company cites the “catastrophic” consequences of confinement measures and border shutdowns that drove down revenues by more than 90 per cent in less than two months.
FlightHub said in a May 7 court filing that it and five subsidiaries “are no longer able to meet their financial obligations,” with JustFly — its main U.S. brand — owing suppliers $15 million.
The travel firm has temporarily laid off 90 employees in Canada and 18 in the U.S., roughly half of the firm’s pre-coronavirus workforce.
The company warned of potential shortfalls due to credit card chargebacks issued by customers through their banks following the tide of flight cancellations since mid-March.
FlightHub draws its revenues from airline, hotel and car rental commissions, service charges and fees for add-ons such as cabin upgrades and seat selection.
The firm’s current assets include $6.4 million in cash and accounts receivable.
It has cut costs in recent weeks, reducing advertising and marketing expenses by 95 per cent. It also says it has tried to negotiate with vendors and suppliers to revise the size and timing of outstanding payments.
This report by The Canadian Press was first published May 13, 2020.
The Canadian Press