Manitoba

Discount airline 'very, very happy' after feds loosen ownership rules

The CEO of a new Canadian airline is celebrating the federal government’s decision to loosen rules and allow a greater share of foreign ownership.

Canada Jetlines plans to begin flying by summer 2017; regional hub planned for Winnipeg

A mock-up of a Canada Jetlines plane. The discount airline plans to start flying in the summer of 2017. (Canada Jetlines)

The CEO of a new Canadian airline is celebrating the federal government's decision to loosen rules and allow a greater share of foreign ownership in the industry.

"[It's a] very big change of policy from the government," said Canada Jetlines president and CEO Jim Scott Friday. "Everybody in the Jetlines team is very, very happy."

Transport Minister Marc Garneau announced Thursday the federal government intends to increase the cap on foreign ownership of airlines to 49 per cent from the current 25 per cent. Until the new rules come into effect, the government has given Canada Jetlines an exemption to the 25 per cent cap.

Currently all owners of Canada Jetlines are Canadian, but Scott said the company plans to go public on the TSX Venture Exchange in December and the new rules will make the company's stock more attractive to overseas investors.

The CEO said his company will not be the only one to benefit from the new legislation.

"[Garneau] has given us an exemption and he's also going to change the policies so that other airlines can take advantage of this," Scott said.

Canada Jetlines plans to be a third alternative national carrier, offering fares that are 30 per cent cheaper than those of WestJet and Air Canada. The two companies control about 80 per cent of the airline market in Canada, said Scott.

Scott said the model will hopefully attract would-be fliers pushed out of the market because of high ticket prices, such as families, for whom saving $100 per ticket can really add up.

"It's always priced lower so it gives an affordable option to Canadians," he said.

Regional hub planned for Winnipeg

Canada Jetlines predicts it will bring 250 direct jobs to Winnipeg alone by creating a maintenance base in the city.

"When the aircraft are down for the night, they need to be maintained, and Winnipeg has a long tradition of being able to maintain airplanes. There's lots of talent in the area," Scott said.

Eventually pilots and flight attendants would also be based in the city.

A total of 12 additional routes would fly out of Winnipeg, said Scott, to destinations such as Hamilton, Vancouver and Las Vegas.

"You're looking at a significant amount of new flights coming in and out of Winnipeg," he said.

Canada Jetlines estimates it will be operating with two aircraft by summer 2017, then expand to six by 2018, Scott said.

Within eight years, Scott projects Canada Jetlines will fly a total of 40 planes to destinations across southern Canada and into the United States.

with files from Marianne Klowak

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