VANCOUVER — With its plans still in motion to become what it calls “Canada’s first true ultra-low cost carrier”, Canada Jetlines says it has entered into a subscription agreement with SmartLynx Airlines SIA for financing commitments of up to $15 million.

Founded in 1992 as a private airline, SmartLynx specializes in full-service ACMI (Aircraft-Crew-Maintenance-Insurance) aircraft lease services and is the leading ACMI provider in Europe for Airbus A320 aircraft. Jetlines says SmartLynx aircraft has been used by major airlines including Norwegian, EasyJet, Thomas Cook and TUI. In 2019, SmartLynx’s fleet will consist of 20 Airbus aircrafts, flying routes in Europe and Asia.

“This financing transaction with SmartLynx provides further validation of the Jetlines business plan and the need for a true ultra-low cost carrier in Canada,” says Mark Morabito, Executive Chairman of Jetlines. “This also provides endorsement from a seasoned European airline that flies aircraft for some of the most successful ultra-low cost carrier airlines in the world. We look forward to working with the SmartLynx group as we continue to build out the business plan in preparation for launch.”

Javier Suarez, CEO of Jetlines added: “In addition to the great value added by the investment SmartLynx is making in Jetlines, having them as our partner brings in a good number of synergies that will translate into significant long-term operational savings. SmartLynx reputation and broad network will help Jetlines accomplish our near-term goals.”

Zygimantas Surintas, CEO of SmartLynx says expansion of SmartLynx’s operations into new markets is a strategic long-term priority for the company, “and the Canadian market is among those we have been looking at for several years. We are excited about the opportunity for partnership with Jetlines – not only through SmartLynx’s investment but also through SmartLynx’s ability to contribute our years of experience in airline operations, aircraft leases, maintenance operations and other matters to help Jetlines succeed. The SmartLynx team believes in the ULCC model in Canada and hopes that it can play a part in bringing cheaper air travel to Canadians.”

As part of the deal SmartLynx will provide ACMI (Aircraft-Crew-Maintenance-Insurance) services to Jetlines Operations for eight winter seasons, allowing Jetlines to increase its capacity in the market during the busy Canadian winter season.

In addition, SmartLynx and the Company will enter into a two-year agreement that will provide Jetlines with services and certain proprietary software meant to support Jetlines during the early stage of their operations.

SmartLynx also gets the right to appoint a single Board member to the Company and Jetlines Operations, rights to participate on Board committees, arrangements regarding the review of aircraft leases and the grant of a pro-rata right to SmartLynx to participate in future financings.

The deal is expected to close on or before Dec. 24, 2018.

Canada Jetlines has said it’s aiming for a 2019 launch. The would-be carrier says it wants to offer nonstop service from Canadian gateways to the U.S., Mexico and the Caribbean on an A320 fleet. Earlier this month the ULCC said it had signed a new partnership with Quebec’s Saint-Hubert airport, with an eye to that airport serving as its Montreal base.