A new low-cost airline is taxiing to the runway, preparing to take off from Kelowna.
NewLeaf Travel Co., which flew ski tourists to Kelowna on charter flights from Hamilton and Calgary last month, plans to launch an ultra-low-cost carrier in Canada this summer. In a joint venture with Kelowna-based Flair Airlines, the company plans to fly budget travellers on Boeing 737s between mid-sized airports like Saskatoon, Regina, Thunder Bay, Ont., Moncton, N.B., Hamilton or Kelowna.
In winter, southbound destinations may include Las Vegas, Oakland or Los Angeles, which would give American skiers non-stop travel to the Okanagan.
“By working with Flair, we don’t have the required up-front capital costs of starting up a new airline from scratch. And we’re taking advantage of their infrastructure over the last 10 years,” NewLeaf CEO Jim Young said in an interview Tuesday.
A former chief marketing officer at Frontier Airlines in Colorado, Young was president of Canada Jetlines for six months last year. Even though Canada Jetlines and Calgary-based Enerjet are low-cost competitors, he’s confident NewLeaf will have the upper hand.
While Jetlines and Enerjet are busy raising money to buy aircraft, he said, NewLeaf can initially use passenger jets and crews supplied by Flair.
“The first to get established stands a good opportunity to establish a beachhead in the market,” Young said. “It remains to be seen if (Jetlines and Enerjet) ever get in the air.
“We’ve de-risked the operations because we’re working with a very reliable, safe airline with a 10-year legacy.”
Flair Airlines flies workplace charters in Alberta and passenger flights to the Caribbean and U.S. The company has worked out an hourly rate with NewLeaf to supply and fly at least two 737-400s, said Flair owner Jim Rogers, a founder of Kelowna Flightcraft.
“We have all the approvals (Young) needs. He wants to try this low-cost airline, so I’m prepared to put a couple of my 737s and crews into this thing and try and make it work,” he said.
NewLeaf, the commercial side of the business, plans to buy its own 737-300s but will leave the flying to Flair’s pilots, flight attendants and mechanics. NewLeaf is seeking to raise $20 million to $30 million, and is “well along the path,” Young said.
The no-frills, cost-focussed airline is modelled after U.S. tour operator Allegiant Travel Co. Passengers pay for a seat and a seatbelt. Boarding first, seat selection, checking bags or bringing carry-on luggage add extra fees.
“It’s not meant to nickel and dime everyone, but it’s meant to have that lowest possible cost. So if you just want to go from A to B, you can pay for that,” Young said.
NewLeaf plans to launch ancillary services like hotel bookings, car rentals and theatre tickets. For Kelowna, the airline may partner with wine tours, bicycle rentals and other vacation packages.
Young is going after the leisure passenger who wants to visit family in Saskatoon, a customer he says doesn’t fly much because the country’s main airlines Westjet and Air Canada have ignored him. Westjet was at first a market disruptor but has grown into Canada’s second major airline, going after a larger share of flights, he said.
“It’s a duopoly . . . I don’t want Air Canada’s market. I don’t want Westjet’s market ñ it’s predominantly business travellers. We’re focused solely on leisure travellers ñ people who want to go to a place and visit their mom or grandchildren.”
Kelowna will be the operational headquarters because Flair is based here. It also has a low-cost airport on the doorstep of an attractive Okanagan Valley, he said.
Young was born and raised in Alberta and as a kid visited the Okanagan in summer. Now based in Ontario, he’s negotiating with two Canadian cities to become NewLeaf’s corporate base.
For Rogers, the business arrangement will bring more traffic into Kelowna and across Canada. It’s good for Kelowna Flightcraft, which has the maintenance contract, and it opens up new sun destinations south of the border.
“It’s exciting,” he said. “We have all the approvals to do all the U.S. destinations . . . There’s a market for the low-cost airline out there. It’ll be interesting.”