Calgary·Q & A

Expert unpacks the hype around Canada's newest low-cost airline

After months of waiting, Calgary-based WestJet’s new ultra low-cost airline, Swoop, swept into the Canadian market this week.

Business and marketing professor Marvin Ryder talks Swoop and its implications for travelling on the cheap

Swoop, the ultra-low cost carrier launched by WestJet, will begin operations in June. (WestJet)

After months of waiting, Calgary-based WestJet's new ultra low-cost airline, Swoop, swept into the Canadian market this week.

The airline's first flights take off in June, travelling six times a week between Abbotsford, B.C., and Hamilton; Hamilton and Halifax; Hamilton and Edmonton; and Hamilton and Winnipeg.

As might be expected, there's some fairly good deals on offer to get people on board, like the first 2,000 tickets sold being free — not including applicable taxes — and some legs, like the one from Abbotsford to Edmonton, are selling for $7.50 one way.

Nearly all flights are under $100 and will be on Boeing 737-800 aircraft. Customers will pay for a seat and can only bring on one personal item. Then, they can choose to pay more to check bags, watch movies, use Wi-Fi, have more legroom and buy snacks and drinks on-board.

Marvin Ryder, a business professor at McMaster University specializing in marketing and business strategy, appeared on the Calgary Eyeopener on Friday to discuss why Abbotsford and Hamilton were chosen as hubs, how they can offer such low ticket prices and what it all means for travellers. 

Below is an abridged version of that conversation.

Q: Good morning … what do you make of this?

A: We knew this was coming for some time. Just to take you back to 2017, we had our first ultra low-cost carrier debut. At that time, it was called New Leaf. Then, thanks to a takeover, it's now known as Flair Airlines. Today, Flair has flown more than 500,000 people, so clearly there's a market.

WestJet announced in the spring of 2017 that they planned to get in that market, and at that time they said it would be the fall of 2017. Then when we got closer to the fall, they said it would be early in 2018. And as we got closer to 2018, now it's June. But finally the details seem to be emerging … and there's a third player still warming up out there.

It used to be called Canada Jetlines, now it's just being called Jetlines. They still say they're going to debut in June as well, so suddenly there's going to be tremendous choice in this ultra low-cost segment.

Q: I appreciate Swoop, and WestJet behind it is just trying to make a splash. But really, $7.50 [to fly] from Abbotsford, B.C., to Hamilton?

A: Let's just put a big asterisk beside that. For that price, you get a seat and a seatbelt. If you want to carry on a bag, that's another $37. Do you want to check a bag? That's $26. Do you want a drink on the flight, even some water? Well that's going to cost you money.

Marvin Ryder, assistant professor of business at McMaster University, says having three low-cost carriers might be too many for the Canadian market. (Marvin Ryder)

Do you want to make sure you have a guaranteed seat on the aisle or by the window? That's going to cost you money. That's the key to ultra low-cost carriers, you get the basic fare. But if you want any extra amenities, you pay for all of them. In fact, what WestJet is suggesting is compared to the ancillary fees on their regular flights, you'll probably pay twice as many ancillary fees on these ultra low-cost carriers.

Q: Is the washroom coin operated?

A: That's what I'm waiting to hear, coin operated or you need a credit card to let you in. I'm carrying that to an extreme, but that's kind of the idea. Every little thing you want, you pay for. But if you don't want and don't need it, you don't pay for it.

Q: They've already shrunk seat size on regular flights, both Air Canada and WestJet … can they shrink seat size more, is that part of the plan here?

A: No, that's not part of the plan here, but we'll turn it the other way around: they actually are going to have some seats with either more leg room or a little wider, and they can be yours. But you have to pay more for those. This is all part of the strategy to let consumers pay as little or as much as they want to on these flights.

And this is not a new model in the world. We've seen this in Europe, very successfully, for many years, a little bit in the United States, and it's finally coming to Canada.

Q: Now this is no slight to the good people of Hamilton, Ont., but it's not exactly like they're going from major destination to major destination here. That's also part of the plan, isn't it?

A: To be an ultra low-cost carrier, of course you've got to keep your operating costs low, and two major airports in Canada — Vancouver and Toronto — are some of the most expensive airports in the world to land and pay those fees.

So, if you want to go from east to west, it's Hamilton to Abbotsford, it's not Toronto to Vancouver. In both cases, you're about an hour away from your ultimate destination ... but that's up to people, how much do you want to save, what are you going to do at the other end, were you going to rent a car anyway?

Q: Is there any opportunity or possibility this will backfire on WestJet? Now that we know what ultra low-cost carriers are and you have to pay for everything, are people going to start expecting more from their regular service? If not, why not just take the low cost guys all the time?

A: I'm one of those funny people, I'm not looking to save every last nickel and dime on these flight, and I still value my time. So I would prefer to fly from Toronto to Vancouver, and even though it will cost me a little more, the time I saved commuting one way or the other, that's valuable time for me.

It's really about giving consumers choice. The question really is, is there enough room for three of these carriers in a relatively small market? I'm not sure by the end of 2018 or say early in 2019, we'll still have three operating.

​With files from the Calgary Eyeopener