Reference no: EM133091662

Jetsgo - The discount airline, Jetsgo, began operations in June 2002, as a private company owned by Michael Leblanc. Within three years it had grown to be Canada's third largest airline. On Friday March 11, 2005, just before the busy Spring-break travel week, Jetsgo unexpectedly entered bankruptcy protection stranding thousands of passengers and Jetsgo employees who could not return home, and annoying those who could not leave on their Spring-break holiday. Throughout its short life the company was plagued with both maintenance and financial problems. In November 2003, Transport Canada found 23 non-conformance items. In February 2005 it placed restrictions on Jetsgo. On March 8 it said that operations would be suspended on April 9 if the maintenance problems were not fixed. Three days later, on March 11, the company ceased operations. The company had financial and cash flow problems. In the first three months of 2005 it lost $22 million. It was indebted to NAV Canada, which operates Canada's air traffic control system, for more than $1.25 million, and the Greater Toronto Airport Authority for $5.5 million. Leblanc decided to close operations at midnight on Thursday March 10, but would not make a public announcement until Friday, March 11. On Thursday, Leblanc had the Jetsgo supervisors tell the pilots to fly their airplanes to Quebec City for maintenance checks. Meanwhile, he left the online reservation system open. On Friday March 11, at 12:30 a.m., pilots and other employees were phoned, waking many from their sleep, and told that the company was bankrupt and that they should stay away from the airports. Customers who arrived at the airports on Friday were abruptly told that operations had been shut down. All of the stranded passengers, pilots, flight attendants, and maintenance personnel had to make alternative arrangements to get home; many had to buy tickets on other airlines. Afterwards, Leblanc said that the 'white lie' told to the pilots was justified so that all the company aircraft could be kept safely in Quebec City. "It was white lie, but a necessary lie. You can't tell them [the truth], or the job won't get done. Half of them would have refused." He had all the planes parked in a company-leased hanger because he feared that if the planes were left in other cities then they would be seized by the various airports and NAV Canada to whom Jetsgo owed money.

Questions: Use ethical theories and other material discussed to support your position. Describe the theories used.

1. Do you think that the little 'white lie' that Leblanc told to the pilots was ethically justifiable? Use ethical theories and other material discussed in class to support your position.

2. Was it operationally wise for Jestgo to keep the online reservation system open until the company officially declared bankruptcy? Was it an ethically correct decision? Evaluate this based on ethical theories.

3. What concepts from the decision-making section apply to this case? Explain how they do. Case written by Paul Dunn for classroom discussion purposes.