A former executive at Frontier Airlines Inc. is proposing to launch an ultra-low-cost carrier in Canada, saying NewLeaf Travel Co. Inc. will focus on Hamilton and Abbotsford, B.C. – two secondary airports that NewLeaf believes will become magnets for budget travellers.
Jim Young, a former vice-president and chief marketing officer at Denver-based Frontier, served for six months as president of upstart Canada Jetlines Ltd. before leaving the Vancouver-based company last June.
NewLeaf has lined up Kelowna, B.C.-based Flair Airlines Ltd., a charter outfit, to supply aircraft and crew.
“The difference between the Jetlines business proposal and our plan is that we’ve gone and partnered with an existing airline,” Mr. Young said in an interview Monday.
NewLeaf joins two other budding entrants vying to start ultra-low-cost carriers (ULCCs) in Canada, though all three face challenges to raise money from investors. So far, Jetlines has attracted $2.5-million out of its target to raise $50-million, while Calgary-based charter specialist Enerjet, headed by WestJet Airlines Ltd. co-founder Tim Morgan, is in the early stages of attempting to launch a ULCC with the temporary name Jet Naked.
“We understand the cynicism within the industry about these types of ventures,” said Mr. Young, who estimates that NewLeaf will need roughly $25-million to begin flights later this year. NewLeaf has the best chance to gain first-mover advantage in Canada because privately owned Flair will provide the initial Boeing 737-400 jets and supply the crew, he said.
Air Canada and WestJet have the market covered nationally for serving business travellers, but have left openings in the leisure segment for NewLeaf to offer lower domestic airfares, he said.
All three would-be ULCC operators are also interested in flying to U.S. sun destinations.
NewLeaf has a shortlist of locations – two of the leading options are to use Hamilton instead of Toronto’s Pearson International Airport and fly from Abbotsford instead of Vancouver International Airport. “Our goal is to stay out of the large primary airports and focus on secondary airports because they represent lower-cost opportunities for us,” Mr. Young said.
Even before the emergence of NewLeaf, Air Canada took notice of Jetlines and Jet Naked. Air Canada, through its Rouge leisure operation, will kick off Hamilton-Calgary service and open the seasonal Toronto-Abbotsford route in late June. Jetlines envisages Vancouver, Winnipeg and Hamilton to be three hubs, although the fledgling carrier also has Abbotsford on its route map.
Several members of the Canadian Airports Council have expressed their willingness to work co-operatively with NewLeaf, Mr. Young said.
NewLeaf’s plan touts having the additional attraction of giving customers the opportunity to buy packaged vacations, similar to the business model of U.S. tour operator Allegiant Travel Co.
Mr. Young said he is encouraged by NewLeaf’s recent trial with spring break deals to Kelowna for Okanagan ski packages, flying in passengers from Hamilton and Calgary.
His airline industry experience includes working for 15 months at Frontier while the company was in bankruptcy protection in 2008-09, years before the carrier transformed into a ULCC in 2014. He left Continental Airlines Corp. in 2001 after six years.
Mr. Young, born in Edmonton and raised in Calgary, now lives in Ontario.
David Solloway, who took over as Jetlines president last summer after the departure of Mr. Young, said in a letter to shareholders over the weekend that he is optimistic about luring more financing. “We are in the due diligence stage with a major investor and are talking to others,” he wrote.
Jetlines hopes to start scheduled service this September, but that hinges on attracting $47.5-million in new funding. “Over all, the timing of advanced funding will determine when revenue flights commence,” Mr. Solloway said.Report Typo/Error