The ‘ultra low-cost’ airline model is set to take flight in Canada 25JUL, as NewLeaf gets a 2nd shot at offering bare bones air travel in the style of Europe’s Ryanair and America’s Spirit Airlines.
In fact, former Spirit CEO Ben Baldanza, the man credited with coining the term ‘ultra LCC’, who took Spirit from a tiny start-up to America’s biggest cut-rate carrier, will chair NewLeaf’s board.
NewLeaf was originally scheduled to start flying in mid-February. It suspended ticket sales and refunded pax after just a week of sales in January, when questions were raised over whether it needed an airline license to operate.
NewLeaf itself will not operate flights. It is structured as a reseller of flights operated by Kelowna-based Flair Airlines. A challenge to that model from self-styled air passenger advocate Gabor Lukacs was rejected by the Canadian Transportation Agency in March, and while Lukacs is appealing that decision to Federal Court, NewLeaf is confident it will prevail.
In the months since suspending sales, NewLeaf has tinkered with previously announced routes and added to its planned network. Originally scheduled to operate between just 7 Canadian airports, the company will now offer 18 routes between 12 cities: Halifax, Moncton, Hamilton, Winnipeg, Regina, Saskatoon, Edmonton, Kelowna, Kamloops, Fort St. John, Abbotsford and Victoria.
One-way introductory fares start as low as $79, taxes in. That fee will give travellers “a seat and a seat-belt,” NewLeaf CEO Jim Young told a press conference yesterday. Everything else – from seat selection to carry-on and checked baggage, refreshments to printing a boarding pass at the check-in counter – will cost extra.
Like other ultra LCCs, NewLeaf will not pay commission and is not looking to the travel agent channel for sales, although chief commercial officer Dean Dacko says he hopes that will change one day.
“The travel agent community is so important. We hope to find a way to introduce a program to work with them in the future.”
Echoing the words of WestJet 20 years ago, NewLeaf’s Young says Canadians “have been paying far too much for air travel.” It is promising fares 25-35% below its larger competitors.
NewLeaf also believes it will expand the market for air travel by carrying many pax who wouldn’t fly otherwise. “We think there are a lot of Canadians who don’t fly because they can’t afford it,” Young said. “We believe we can stimulate the market.”
Young also said that while the late launch is disappointing, “there’s still lots of summer left to explore Canada.”
On most routes, NewLeaf will initially fly 2 to 3 times per week, with plans to increase routes and frequencies as it grows from Flair’s initial fleet of 3 737-400s. Flights are currently scheduled through 02OCT. The company says announcements will be made in the coming months about winter sun flights.
NewLeaf pax will be allowed to bring a small personal item aboard at no charge – something small enough to fit under seats. Carry-on bags carry a $30 fee, while a single checked bag is also priced at $30. Pax who don’t check-in online will pay $10 for a boarding pass at the airport and seat selection fees range from $10-$25. All snacks and beverages will come at a fee as well.
Dacko says NewLeaf has “significantly more financial resources than 3 months ago,” attracting new investors including a consortium of 7 Manitoba First Nations groups.
Interviewed by Open Jaw in the 1st few hours after the press conference announcing its launch, Dacko says initial response has been gratifying. “Booking velocity is through the roof. We had targets close to what they were in January, and we’re getting bookings at a rate 5 times higher than that. If the 1st few hours are any indication, we’re going to be growing very fast.”