REGINA – Just as Canada’s newest discount airline, NewLeaf, is preparing to take off, Canada’s other two major airlines are slashing prices.
“What we’ve seen is not at all unexpected, our competitors have come down to compete with us,” said Dean Dacko, the chief commercial officer with NewLeaf.
But a closer look shows the reduced fares aren’t across the board.
Instead, the cheaper flights are most noticeable on days that NewLeaf operates flights as well.
“The incumbents are going to react. If you’re running a business and somebody starts operating and offering the same product then you’re going to respond,” said University of Regina economics professor Jason Childs.
Still, both Air Canada and WestJet maintain the competitive prices aren’t new.
In a statement, Air Canada says:
“We welcome competition and offer competitive pricing in every market we serve. We ensure our customers get the best choice in fare products that best meet their needs.”
Undercutting the competition isn’t unusual in the airline business. Even though WestJet survived a bumpy start, many other upstart airlines have failed.
“We’ve seen competitors come and go in the past. We are Canada’s low fare leader and we intend to defend that turf aggressively,” said Robert Palmer, public relations manager with WestJet.
“I think the greatest thing that we’ve now witnessed and are now seeing is the benefit to consumers is that there’s a third option available to consumers,” added Dacko.
NewLeaf says they haven’t ruled out bringing a complaint against WestJet and Air Canada to the Competition Bureau.
Dacko says their focus is meeting the overwhelming response they’ve received from Canadians and preparing for their first take off on Feb. 12.