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WestJet to launch ULCC???

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The people who attribute the government ownership of Air Canada was a great protection for them should memorize this passage from the report:

Quote

However, Air Canada's corporate life is more complicated than some .
It was in its conception, and to some extent must continue to be, an instrument
of Government policy . This is recognized in the same document from
which quotations appear above and wherein it is further stated :
. . as a Crown corporation Air Canada must assist in the
attainment of stated national, social, political and economic
objectives. "
From time to time, for example, Air Canada will be called upon to serve
routes both inside and outside Canada where it will be demonstrably impossible
to operate at a profit in the commercial sense . Someone other than this
Inquiry will perhaps be interested in the question whether such special
burdens should be charged to the authority seeking such service.

 

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  • 6 May 2017
  • Calgary Herald
  • Financial Post

Air Canada ready for low-cost rival

Air Canada said on Friday that it plans on taking a “wait and see” approach when it comes to ultra low cost carriers, but is well positioned to respond to WestJet's plans to roll out the service.

Benjamin Smith, Air Canada's president of passenger airlines, told analysts on a conference call Friday morning that the Montreal-based airline has many tools at its disposal to compete in the domestic market, through the use of Rouge, its lowercost leisure carrier.

“We are very well positioned to react to whatever takes place in the marketplace, unlike where we were 10 or 15 years ago,” he said.

Earlier this week, WestJet announced it will buy up to 20 Boeing 787-9 Dreamliners as it sets its sights on expanding its reach in Europe, Asia and Latin America.

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WestJet ULCC launch could slip to 2018 05 JUNE, 2017

  •  
  • SOURCE: FLIGHTGLOBAL PRO
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  • BY: EDWARD RUSSELL
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  • CANCUN

The launch of WestJet's planned ultra low-cost subsidiary could slip to the first quarter of 2018, as it works through the regulatory and labour approvals process.

The Calgary-based carrier outlined a late-2017 launch for the new ULCC when it announced the plan in April. However, today chief executive Gregg Saretsky says that launch could occur in late 2017 or early 2018, citing all of the approvals needed for the new subsidiary.

Those approvals include securing an air operator's certificate from Canadian regulators for the new airline, which it has yet to name, as well as reach agreements with its labour groups and other approvals ahead of launch, he says on the sidelines of the IATA annual general meeting in Cancun. 

The ULCC will operate independently of WestJet with an initial fleet of 10 Boeing 737-800s transitioned from its parent's fleet. The plan calls for an unbundled offering that takes after the business model of ULCC's in the USA and elsewhere in the world.

"Launching a ULCC will broaden WestJet's growth opportunities and open new market segments by offering more choice to those Canadians looking for lower fares," said Clive Beddoe, chair of the WestJet board, in April.

The new ULCC will also allow WestJet to counter Air Canada's own dive into the market segment with Rouge, which the mainline carrier launched in 2013.

Calin Rovinescu, chief executive of Air Canada, is unconcerned with WestJet's plans in an interview at the meeting. Rouge, he says, is a "competitive tool" to allow them to compete for leisure passengers in both international and domestic markets.

WestJet has yet to disclose routes and other details for its new ULCC, which Saretsky says will be released soon.

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Not unexpected with the other changes happening at WestJet (unions etc).

August 1, 2017 5:44 am

New WestJet discount airline service delayed until next year

WestJet says the launch of its new no-frills, low-cost airline won’t be until next summer after initially announcing plans it would start offering flights later this year.

The Calgary-based airline says it expects to announce the initial flight schedule early in 2018 with service expected to start in the summer of next year.

READ MORE: WestJet names executive vice-president for new ‘ultra-low-cost carrier’

The news of the delay came as WestJet reported it earned $48.4 million or 41 cents per diluted share in its latest quarter.

That compared with a profit of $36.7 million or 30 cents per diluted share in the same quarter last year.

READ MORE: Here’s why low-cost airlines have a tough time surviving in Canada

Revenue in the quarter totalled nearly $1.06 billion, up from $949.3 million a year ago.

WestJet says its operating margin grew to 7.4 per cent for the three-months ended June 30 compared with 6.5 per cent in the same quarter last year.

READ MORE: WestJet Rewards member profiles posted online after privacy breach

Capacity measured by available seat miles increased 6.3 per cent, while traffic measured by revenue passenger miles grew 8.9 per cent.

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No surprise herewill be based in Calgary

Company says it's looking at different cities that might make a good home for new operation

CBC NewsPosted: Aug 07, 2017 1:14 PM MT Last Updated: Aug 07, 2017 1:14 PM MT

A WestJet spokesperson says the company is looking at where it makes the most sense to base its promised ultra-low-cost carrier. (Albert Couillard/CBC)

There's no guarantee WestJet's new, ultra-low-cost carrier is going to be based in Calgary, like its parent airline.

The launch has been pushed to mid-2018, which gives the company more time to retrofit its planes and get through the busy winter travel season.

"We are looking at what part of the country and what cities, specifically, actually make the most sense, and so we're just working through that now," said spokesperson Richard Bartrem. 

"Of course, now that we're not launching until next year, we've got some time to actually take the time and make those decisions."

Distinctive branding

Bartrem said the company is looking at secondary and tertiary airports in order to reduce costs.

"We have less of those in Canada than you might see in Europe, for example, so that becomes a bit more of a challenge," he said. 

Work continues on developing the new carrier's brand, which Bartrem says is going to be very different from WestJet so that the headaches associated with an ultra-low-cost carrier aren't associated with WestJet.

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WestJet aims to lure Canadians from U.S. airlines with no-frills carrier

MONTREAL (Reuters) - WestJet Airlines Ltd’s (WJA.TO) planned ultra-low-cost carrier will target Canadian passengers who currently cross the border into the United States for cheaper fares, the company’s chief financial officer said on Wednesday.

Canada’s second-largest airline, which is launching the separate no-frills carrier in June 2018, is trying to attract Canadians who now drive to places like Buffalo, New York for cheaper fares from U.S. rivals, said WestJet CFO Harry Taylor.

“What we’re trying to do is to be able to repatriate those Canadians who are driving across the border,” Taylor said at the Cowen and Co Global Transportation Conference. “They’ve chosen to make that trip across the border for the lower fares that are being offered.”

WestJet is also looking to attract passengers who do not currently fly because of the price. In April, the company said it would launch the ultra-low cost carrier with an initial fleet of 10 Boeing Co (BA.N) 737-800s planes.

WestJet, which originally planned to kick off service late this year, has delayed the ultra low cost carrier’s launch until next summer.

The new service, modeled on other carriers like U.S.-based Spirit Airlines (SAVE.O), would be “low fare, pay for everything,” and completely separate in name and in its marketing from WestJet’s existing airline, Taylor said.

The new carrier is expected to generate twice the ancillary revenues earned by WestJet in the second quarter. Some airlines charge passengers ancillary fees, above base fares, for items like checking in suitcases and selecting their seat.

WestJet would need to be “relentless in terms of costs,” by using planes configured to hold more passengers and a different reservation system, to make the new carrier work, he said.

“In order to make it profitable and earn the return that we want to get, we have to have absolute lowest costs.”

Analysts have raised concerns that a decision by WestJet pilots to join a union could raise labor costs for the carrier.

WestJet will be going into talks for a new collective agreement in the next few weeks.

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During my brief foray into the airline world, I remember the WestJet folks being adamant about their business model and what they absolutely wouldn’t ever, ever, ever do… particularly around and about the time of the common employer and CCAA debacle. 

I’m not a business guy to be sure, but it seems to me they are now doing everything they swore they wouldn’t and stand at the threshold of becoming the new Canadian. By that I mean, ULC, international, mixed fleets, regional feed, unionization etc… am I wrong? Be assured, my interest is purely academic.  
 

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31 minutes ago, Wolfhunter said:

During my brief foray into the airline world, I remember the WestJet folks being adamant about their business model and what they absolutely wouldn’t ever, ever, ever do… particularly around and about the time of the common employer and CCAA debacle. 

I’m not a business guy to be sure, but it seems to me they are now doing everything they swore they wouldn’t and stand at the threshold of becoming the new Canadian. By that I mean, ULC, international, mixed fleets, regional feed, unionization etc… am I wrong? Be assured, my interest is purely academic.  
 

Maybe it's called evolution, adaptation, reality or even staying fit.  Besides the current CEO is not as tunnel visioned as the previous one.who said that we're never going to YYZ. The basic business model therefore changed.

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45 minutes ago, Wolfhunter said:

I’m not a business guy to be sure, but it seems to me they are now doing everything they swore they wouldn’t and stand at the threshold of becoming the new Canadian. By that I mean, ULC, international, mixed fleets, regional feed, unionization etc… am I wrong?
 

By the same token, many legacy carriers back in the day insisted that they wouldn't remove meals or charge for them and that they'd always differentiate themselves by offering a higher level of service than carriers such as Southwest and WestJet did.  The whole industry has evolved, and I doubt that WestJet's ULCC (should it actually launch) or AC's answer to it will compare all that poorly to the current "basic economy" offerings of the US carriers.

I don't think WestJet is becoming the new Canadian Airlines.  CAIL was never profitable.  Most of what WestJet does makes money.

 

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I think to a great extent WestJet has grown to the extent possible at any given scope before taking their next logical steps. I do however wonder about the capex associated with the 787.

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On 07/09/2017 at 7:06 AM, vrefplus5 said:

Does anyone know if theyve secured funding, or even an investor?https://finance.yahoo.com/news/canada-jetlines-signs-letter-intent-090000783.html

'A rebellion against high fares': New low cost airline launching in Hamilton

Canada Jetlines to be based out of Hamilton and Waterloo

CBC News Posted: Sep 11, 2017 12:58 PM ET Last Updated: Sep 11, 2017 12:58 PM ET

A new low cost airline called Canada Jetlines is launching out of the Hamilton airport.

A new low cost airline called Canada Jetlines is launching out of the Hamilton airport. (Canada Jetlines)

 

A new ultra-low cost airline that claims it will have the lowest base fares in Canada is launching out of the Hamilton and Waterloo airports in June of 2018.

Stan Gadek, CEO of  Canada Jetlines, made an announcement about the new carrier's plans in Toronto on Monday.

"As Canadians, why are you paying so much for airfare? I don't understand it. You don't have to," Gadek said."The industry has evolved to the extent now where carriers have lower cost structures, lower price of fuel, lower input costs – and yet air fares are extremely high here in Canada. There's no rational basis for that."

"We're going to start a rebellion against high fares in Canada."

The move comes as Hamilton's airport more than doubled its passenger numbers in the first six months of this year, compared to the first half of 2016. The airport currently hosts flights operated by five passenger carriers: Flair (formerly NewLeaf), Air Canada, WestJet, Air Transat and Sunwing Airlines.

Passenger numbers at Hamilton's airport have long fallen short of expectations, dropping more than 100,000 since 2009. But the new discount airlines, and the bigger carriers trying to compete with them, appear to be turning that trend around. 

About 10 per cent of them are coming from Buffalo and upstate New York, according to a report from the airport.

Gadek said that Canada Jetlines will launch on June 1 in 2018, with two 189-seat aircrafts, configured for all coach seating.

The airline will start with flights from Hamilton and Waterloo to Vancouver, Edmonton, Calgary, Winnipeg, and Halifax.

There will be a "soft start" for 60 days, Gadek said, so the company can demonstrate to Transport Canada that they can operate in accordance with procedure. Then, he said, expansion will ramp up.

After 60 days from launch, Canada Jetlines says it will add two more planes, and expand to 14 locations, including St. John's Las Vegas and Orlando.

Canada Jetlines

These are the destinations that Canada Jetlines says it will serve by April of 2019. (Canada Jetlines)

 

Six months in, the company plans to add two more planes for a total of six, and fly to 23 markets, including Tampa, Fla. And Cancun.

"This will be a fairly rapid expansion," Gadek said.

The company also claims it will have the lowest costs of any airline in Canada or the U.S.

"How low will those fares go? Well, I like to say it will be about the same cost as a pair of jeans, quite honestly," Gadek said. He did not give specific indications of prices, but said base fares will usually be under $100.

Exact prices will depend on the market and the time of the year, he said.

The company will be competing with other low cost carriers like NewLeaf and Flair Airlines.

Both Flair and NewLeaf have been linked since NewLeaf launched last summer, offering flights for as little as $59 one way between Canadian cities such as Abbotsford, Halifax, Edmonton, Hamilton and Winnipeg.

NewLeaf launched with a rocky start, with the Consumers' Association of Canada issuing an alert concerning NewLeaf and Flair over what it called "arbitrary cancellations and alterations to flight dates and times."

Canada's aviation history is littered with airlines that either went out of business or failed to get off the ground.

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Canada Jetlines Plans Summer 2018 Launch From YHM, YKF

Bruce Parkinson, Open Jaw
11.09.17

jetline-airplane_20170911080601.jpgCanada Jetlines Ltd. Says it will offer ultra-low fare service from both John C. Munro Hamilton International Airport and Region of Waterloo International Airport, when it begins flight operations, scheduled for Summer 2018.

“The high demand for lower airfares in the Toronto Metropolitan Area has led to the decision to base our flying in this region,” said CEO Stan Gadek.

“As a result, we are pleased to announce that we have entered into an agreement with the John C. Munro Hamilton International Airport and are in active discussions with Region of Waterloo International Airport. The combined service area for these airports includes nearly four million people. This factored significantly in our decision to serve both airports.”

Jetlines plans to offer ultra-low fare service to the major markets in Canada and select destinations in the U.S., Mexico, and the Caribbean.

“Canadians are overpaying for air travel and we intend to change that,” said Gadek. “By offering customers the freedom to select the travel experience they want in addition to getting every day ultra-low fares, Jetlines will change the way that Canadians fly.”

Jetlines plans to operate Boeing 737-800NG aircraft in a 189 seat, all-coach configuration.

The company is planning to begin ticket sales through its website in Spring 2018.

Bruce Parkinson

Bruce Parkinson Editor-in-Chief

An observer and analyst of the Canadian and international travel industries for over 25 years.

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Some additional info from a G & M report:

Quote

Canada Jetlines will charge more for cabin bags than it will for luggage loaded into the holds of the Boeing 737-800 planes with which it will start service next year, Mr. Gadek said. Canada Jetlines wants as few bags in the cabin as possible in order to load and unload its planes quickly and keep the amount of time spent on the ground to a minimum.

The airline will need to generate fees of more than $20 each from passengers, he said.

WestJet's revenue from ancillary fees amounted to $19.24 per passenger in the second quarter, but the airline is aiming for twice that amount with its ultra-low-cost unit, Mr. Taylor said.

 

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