A new airline in Canada has big plans to bring “ultra low cost” airfares to travellers priced as much as 40 per cent cheaper than what WestJet and Air Canada sell flights for.
And it’s aiming for take-off next spring.
“We’re planning for spring 2015 to have the airline flying,” David Solloway, a veteran airline executive, told Global News on Wednesday.
Solloway is the president of Canada Jetlines Ltd., a Vancouver-based startup with intentions of drastically undercutting far bigger Canadian and U.S. competitors using the so-called ultra low-cost approach.
“It’s a very strict business model,” Solloway, a former Canadian Pacific Airlines exec who’s spent significant time at overseas carriers as well, said.
“The whole focus is to provide safe, comfortable jet service to Canadians at the lowest possible price.”
Jetlines will start out with routes in Western Canada, although Solloway wouldn’t say where. He wants to expand nationally, then to the United States and eventually select vacation spots.
Less is less
Jetlines will reach its low-price goal by taking a page from similar budget airlines elsewhere – stripping away just about every conceivable frill.
“Basically you purchase a seat and seatbelt,” Solloway said. Everything else, from luggage to snacks, comes at an additional charge. Jetlines also plans to pack more seats, or “condense the airplane”, on every flight, lowering its cost per customer.
Flight attendants will be scarce, too, it appears, with the carrier keeping staff levels leaner compared to other higher-end carriers.
Flying into “secondary” airports rather than main hubs at major Canadian and U.S. destinations is another tactic Jetlines will use to keep fares very low, Solloway said.
Success elsewhere, but here ‘unproven’
The model has been successful elsewhere. Solloway pointed to AirAsia, Europe’s Ryanair as well as U.S. no-frills operators Spirit Airlines and Allegiant Air as viable carriers providing customers with more affordable means to fly.
There’s no similar service in Canada at the moment, Solloway said. Though Air Canada now operates a discount service called Rouge, he says there’s room to offer even cheaper flights.
Solloway isn’t concerned by analysts opining that Canada isn’t big enough – that it lacks sufficient demand to support another airline. There’s capacity if the price is right, he contends.
“If you’re asking the question whether Canada could have a third airline, the answer is no. But if you ask whether Canada can support an ultra low-cost, low fare airline, the answer is overwhelmingly yes,” Solloway said.
“We see this as a tremendous opportunity, as do many aviation analysts in Canada,” he added.
“There’s the potential for new competitors,” said David Tyerman, a transportation stock analyst at Canaccord Genuity.
5 million reasons
The biggest opportunity is the five million or so flights Canadians book with low-fare air carriers out of U.S. airports annually, experts say.
“The Canadian market is growing very well. The problem is Canadians are going [stateside] to take American carriers to their destination rather than Canadian carriers because of the high airfares we have in this country,” Solloway said.
But Jetlines, which plans to operate Airbus A319 airplanes, is embarking on a path others have tried and failed on before. Launched in 2001, Montreal’s JetsGo for example closed down abruptly four years later, in 2005.
“Is the market big enough to support an ultra-low cost carrier? That’s not been proven,” Tyerman said.
But Solloway, who says the company is closing in on financing targets and is on track to list on the TSX Venture Exchange by October, is confident.
“We’ve identified a need in the market place – a dramatic need. So many people tell us they’d like to travel more often but at a reasonable price.”
Jetlines is also in the process of securing requisite certification from Transport Canada to legally operate.
“We’re here to fill that gap,” the executive said. “We’ll champion low airfares in Canada.”