Skyservice Airlines is folding its operations after being placed in receivership by an Ontario Court on Wednesday morning.
The charter airline issued a news release just after 11:30 a.m. ET indicating that "recent changes in the Canadian vacation tour market combined with Skyservice Airlines' debt level have rendered the company unable to maintain profitable operations.
"As a result, one of the company's secured lenders applied for the appointment of the receiver," the company said in the release.
Skyservice said the shutdown will result in the cancellation of a flight that was headed to the Dominican Republic today, as well as all of its flights leaving Canada "during the balance of the season in April."
The company said it will work with its tour operator customers to resolve its outstanding passenger issues.
Skyservice also said it was "committed to winding up the business in an orderly and responsible manner. The company and the receiver will continue to treat employees and other stakeholders fairly and in a transparent manner throughout this process."
Jonathan Carroll, president of iTravel2000.com, said tour operators that offer flights with Skyservice, such as Signature Vacations and Sunquest Vacations, will work over the next several days to secure other aircraft and re-book their customers on new flights.
"So what you're going to see is any passenger that is due to travel in the next four weeks will be taken to destination on a different airline and any passengers that are in destination now will be coming back also," Carroll told CTV News Channel Wednesday afternoon.
Carroll estimated that 99 per cent of affected customers will be re-booked on a different flight, while remaining customers will receive a full refund.
Carroll said customers should contact the agency through which they booked their vacation in order to get the latest updates from their tour operator.
Gerry Atkin was supposed to board a Skyservice flight to Jamaica on Friday morning.
Aitkin said Wednesday he will have to the call the company he booked his vacation through to see what happens next.
He's been told that his tour operator will try to get new seats for Atkin and his wife. Otherwise, they will get a refund.
"I am sure they will make every effort to find seats for us," Atkin told CTV.ca in a telephone interview on Wednesday morning.
Atkin said he was originally supposed to leave for Jamaica on Saturday, though the tour operator e-mailed him last Tuesday to say that his flight had been pushed up a day. Looking back at what happened, he said it may have been a sign that Skyservice was in trouble.
Rumours swirled since early Wednesday morning, after five of the charter airline's flights out of Pearson International Airport were listed as cancelled.
Representatives from Skyservice -- including spokesperson Sabah Mirza and CEO Rob Giguere -- did not return calls from CTV.ca on Wednesday morning, seeking clarification on the cancelled flights and on reports the airline was going under.
CTV Toronto's Tom Hayes reported that no one was willing to speak to the media at the company's corporate headquarters, where the blinds were drawn during the mid-day on Wednesday.
According to the Skyservice website, the Canadian company was founded in 1986 and employs more than 1,200 people.
Hayes said all Skyservice employees have "been told to clear out their desks, especially at the airport where things looked pretty empty this morning."
The Canadian Press reports that Skyservice was an integral part of the Canadian travel industry providing planes and seating capacity to major tour operators. On previous occasions, it has provided flights to companies who were dealing with the collapse of other airlines.
A news release from the company last November said Skyservice provides service to about 1 million passengers every year.
If you're a Skyservice customer who had a flight cancelled, please share your story with us at newsonline@ctv.ca
With files from The Canadian Press and a report from CTV Toronto
