England Finance

Jan 10 2018

Discount travel company NewLeaf launches – ultra low cost – flights from YYC, Calgary Herald, discount travel company.#Discount #travel #company


Discount travel company NewLeaf launches ultra low cost flights from YYC

More from Amanda Stephenson, Calgary Herald

NewLeaf Travel Company, with its partner Flair Airlines will launch its inaugural flight from Calgary on route to Hamilton. Jim Wells / Jim Wells/Postmedia

The Winnipeg-based travel operator, which styles itself in the ultra-low-cost carrier model popularized by discount airlines like Ireland s Ryanair and U.S.-based Spirit, launched in Canada in July. Since then, it has operated over 1,000 flights and carried about 125,000 passengers, serving markets like Abbotsford, Edmonton, Winnipeg, Hamilton, Moncton, and Halifax.

The company will be starting three-day-a-week non-stop service from Calgary to Phoenix in January, but is making its entry into the local market now with holiday season service to Hamilton, Ont. — at a steep discount from what the major airlines are offering. For example, a last minute booking to Hamilton from Calgary, departing Dec. 17 and returning Dec. 30, was going for $432 on NewLeaf s website on Friday. That same trip on the same dates was advertised for $889 on WestJet s website and wasn t even available on Air Canada s website.

NewLeaf is not actually an airline, it is a ticket reseller that has partnered with B.C.-based charter service Flair Airlines, which provides the aircraft and crews. NewLeaf currently has full-time use of three of Flair s Boeing 737-400s, and also has the ability to sell extra flights when the charter service has excess capacity.

It keeps its fares low by flying into secondary airports (Hamilton instead of Toronto, for example) and by offering bare bones service on base fares. On a NewLeaf flight, your ticket buys you a seat and a seatbelt — everything else, from carry-on baggage to seat selection to in-flight beverages to printed boarding passes, costs you extra.

The company boasts that its aggressive pricing model has forced Air Canada and WestJet to react in the markets it is already serving. The travel app Hopper recently found that airfares are down by 23 per cent across all airlines on routes NewLeaf operates in.

Canada right now has an almost a perfect duopoly, Young said. Without any meaningful third party competition, there s been no pressure to keep fares low until now.

Analyst Chris Murray of AltaCorp Capital Inc. said he believes there may be opportunity for a no-frills airline in Canada. However, he said NewLeaf s business model as a reseller of seats rather than an airline that operates its own planes could be problematic.

They don t control their own market, they don t control a lot of other things, he said. So how long is this going to work? How big can you get if you don t own your own aircraft?

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