Manitoba

Winnipeg-based NewLeaf finally takes flight

After being grounded by licensing problems, NewLeaf took flight on Monday.

After turbulent start, company finally gets off the ground

NewLeaf's inaugural flight was given a watery welcome as it arrived in Winnipeg on Monday. 1:50

NewLeaf's inaugural flight was given a watery welcome as it arrived in Winnipeg on Monday.

After the travel company was earlier grounded by licensing problems, the aircraft's entrance "made history in Canada," its president said.
The first flight for NewLeaf landed in Winnipeg on Monday after departing from Hamilton earlier in the morning. (Louis-Philippe Leblanc/CBC)

About 150 passengers boarded a Boeing 737-400 at John C. Munro Hamilton International Airport headed for Winnipeg on the first flight from the new low-cost air travel company.

"The journey to get here hasn't been without challenges, but today is proof that we are a dedicated group of individuals who are committed to providing Canadians with a good deal," said Jim Young, president and CEO of NewLeaf Travel Company.

The next flight for the company — Winnipeg to Kelowna — was delayed an hour. 

The second flight for the company from Winnipeg to Kelowna was delayed for an hour. (Louis-Philippe Leblanc/CBC)

Young said history was being made by the low-cost carrier while speaking at the Winnipeg James Armstrong Richardson International Airport for the company's official ribbon cutting.

"Thousands of people have purchased tickets across Canada. This exceeds our targets and we are thrilled," he said, adding the company has already sold out multiple flights. 

Barry Rempel, president and CEO of Winnipeg Airports Authority, also referred to the numerous hurdles NewLeaf faced before taking flight.

"I believe there were probably days you weren't sure this was really going to happen — it is, it has," he said.

The Winnipeg-based company hoped to begin operations in January, but the Canadian Transportation Agency was in the middle of conducting a review of the licensing requirements of indirect air service carriers like NewLeaf.

As a result of the delay, NewLeaf refunded all tickets sold and suspended operations until it could sort out the regulatory turbulence.

NewLeaf flights will go between Hamilton, Halifax, Winnipeg, Victoria, Edmonton, and a few other cities (NewLeaf)
The issue arose because NewLeaf is contracting flights through Kelowna-based Flair Air in an agreement called wet leasing, explained David Duval, with the faculty of business and economics at the University of Winnipeg.

"NewLeaf is entering into, as a travel company or a travel intermediary, entering into an agreement with Flair Airlines that will see Flair supply basically the aircraft and the crew and NewLeaf will endeavour to sell the seats," he said.

That's why CTA branded NewLeaf a reseller, which is a new classification in Canada.

NewLeaf doesn't need to hold the traditional airline licence because it's a travel intermediary, Duval explained.

"I think the idea is one that should be explored," he said, adding he thinks NewLeaf has its timing and route network reasonably correct.

In June, the Federal Court of Appeal agreed to hear an appeal by an air passenger rights advocate regarding whether the CTA has the authority to permit NewLeaf to operate without a licence.

The court likely won't hear the appeal until at least the fall, but on Thursday, the advocate, Gabor Lukacs, filed an injunction motion asking the court to require NewLeaf to put up $3.7 million in financial security.

Young said he doesn't know how Lukacs could come up with the dollar figure when he has no idea how much capital the company has.

"We have all the necessary protections in place for the customer; this includes protecting the customers, the fund that they have paid that we hold prior to completing the flights," Young said.

Earlier this month, some consultants told CBC News they're owed thousands in fees.

South Beach Capital Partners, made up of seven Manitoba First Nations, are financial partners with NewLeaf.

"We became involved because we believe in business diversification and see this as an excellent investment," said Brokenhead Ojibway Nation Chief Jim Bear at Monday's ribbon cutting.

"We know there is a real appetite in Canada for low-cost air travel."

NewLeaf costs are kept low by adding fees to baggage, especially if it is not checked in online from home. (CBC)
The costs are kept low by adding fees to baggage, especially if it is not checked in online from home. NewLeaf charges for carry-on bags — anywhere from $31.50 to a whopping $92 at the gate. NewLeaf passengers also have to pay for checked luggage — from $26.25 online to as high as $80.50 at the gate.

The airline will face other challenges, including matching its product with consumer expectations and adapting to changes, Duval said, but the company has "as good a chance as anybody."

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