Business

NewLeaf to offer cheap Canadian flights through 7 cities next month

Airline will start offering flights between 7 cities at rock bottom prices

New discount airline 2:35

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A new airline set to take flight today is offering ultra-low fares between seven Canadian cities for as little as $89 for a one-way flight.

NewLeaf revealed its flight plans at joint events in Kelowna, B.C., Winnipeg and Hamilton that started at 11 a.m. ET on Wednesday. 

As of Feb. 12, flights are available from seven Canadian airports:

  • Abbotsford, B.C.
  • Halifax
  • Hamilton, Ont.
  • Kelowna, B.C.
  • Regina
  • Saskatoon
  • Winnipeg

CEO Jim Young says the company is focusing on second-tier airports in part because "lower landing fees mean we have savings we can pass on to you."

Young said the airline is looking at adding U.S. sun destinations later in 2016.

The airline will partner with B.C.-based charter airline Flair Airlines for planes, crew and maintenance work. All of the planes will be Boeing 737-400s, with 156 seats in a three-and-three configuration with an aisle up the middle.

NewLeaf Airlines 20160106 Dean Dacko

NewLeaf will fly between seven Canadian cities to start, but hopes to expand to the U.S. and elsewhere in Canada soon. (Peter Power/Canadian Press)

The lowest fee of $89 includes all applicable taxes, and even the highest priced route and seat will cap out at $149, one way, for a no-frills ticket.

But the airline does charge a fee for other services including $25 for carry-on bags, the same price as a checked bag.

"So leave the heavy lifting to us," Young said.

NewLeaf said it can save money in part because it won't offer its seats on any third-party travel websites, which charge airlines a fee to post and make sales there. "That's one of the things that lets us keep costs low," Young said.

Personal items that fit under the seat in front will be free, but the airline will charge for snacks and refreshments. And NewLeaf offers priority boarding to those who want it, for a fee.

"By unbundling the entire service you get to choose what you want," Young said, noting his airline is taking the same business model of other successful airline businesses in other countries. "Ultra low-cost carriers are some of the most financially successful airlines in the world today," he said.

NEWLEAF ROUTE MAP

The air travel industry in Canada is dominated by WestJet and Air Canada, but is also served by many regional and charter companies that cater to small segments of the market.

Darcy Morgan, chief commercial officer of Calgary-based charter airline Enerjet, says Canada is more than able to handle competition in the industry.

"Canada is not well-served by airlines today, and as much as there's a duopoly of Air Canada and WestJet, Canada lacks the low-cost point to point service pretty much every nation has available," he said in an interview.

"If there's an opening in the market, we believe that's it."

Barry Prentice, a professor at the Asper School of Business in Winnipeg, agrees with that assessment, and thinks starting service out of second-tier airports is a smart plan.

"I think it could fly," he said in an interview. "Typically lower cost stimulates demand. I think we'll see more people travel that haven't travelled before."

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