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This article was published 5/1/2016 (2153 days ago), so information in it may no longer be current.
The arrival of NewLeaf Travel Company to Canadian skies won’t threaten the domestic oligopoly of Air Canada and WestJet but it will certainly make it cheaper to fly.
The Winnipeg-based ultra-low-cost carrier unveiled its routes, schedule and other plans Wednesday morning at the Richardson International Airport.
Those in attendance didn’t quite have visions of children breaking open their piggybanks to buy a ticket to Hamilton but, you know, it was close.
NewLeaf will take to the air on Feb. 12 with a network of seven cities, including Winnipeg, Halifax, Regina, Saskatoon, Kelowna, Abbotsford and Hamilton.
"We’re in this thing for the long run," said CEO Jim Young.
But you’ve got to be flexible. NewLeaf isn’t offering daily service. For example, it has an afternoon flight to Hamilton on Wednesdays and an evening flight on Saturdays and afternoon flights to Kelowna on Thursdays and Saturdays.
NewLeaf plans to achieve its model by focusing on smaller airports, a simple point-to-point network and avoiding larger, more expensive airports, such as Pearson in Toronto.
That model includes providing passengers with a seat and a seat belt and then enabling them to customize their trip by paying for extras such as priority boarding, in-flight drinks and snacks as well as carry-on and checked baggage.
NewLeaf will start out with two aircraft, a pair of 156-seat 737-400s, which are owned by its partner, Kelowna-based Flair Airlines. The plan is to grow to three planes within the first month and then to four by the summer. Within three years, Young’s goal is to have a fleet of 15 planes.
NewLeaf’s business plans includes charges for carry-on baggage. Not your purse or computer case or anything that will fit underneath the seat in front of you, but bags that are essentially substitutes for suitcases.
"A lot of our cost model is about turning the airplane (around) faster. You can board a plane our size in over an hour when everybody is hauling their bag on and trying to shove it (in the overhead compartment). We can offer lower fares by flying the airplane longer every day. In order to do that, we need to turn the airplane (around) at our stations inside of 30 to 40 minutes. The only way to do that when you’re loading 156 people is to make sure you’re getting them on and off as efficiently as possible," he said.
Another cost savings is avoiding travel agents and other third-party bookers. You will only be able to book a ticket on NewLeaf by visiting its website, flynewleaf.ca, which will bypass the global distribution system that travel agents use and which charges about $5 per leg of a trip. That could mean adding up to $30 for a return trip, Young said.
The arrival of NewLeaf makes Canada the last of the G-20 countries to have an ultra-low-cost carrier, said Barry Rempel, president and CEO of the Winnipeg Airports Authority, and he said there will undoubtedly be a ripple effect.
"What we’ve seen in these other environments is a stimulation of the market by up to 40 per cent. They’re attracting people that wouldn’t otherwise fly. Spirit Airlines in the U.S. and Ryanair in Ireland thrive when they stay close to their model, which is ‘get me there cheap,’" he said.
Even though NewLeaf isn’t competing with WestJet or Air Canada on direct flights, Rempel believes it will force them to lower their prices on at least some routes.
"Unquestionably. The established carriers are going to be watching very closely to see how much their visiting family market is impacted by NewLeaf. They’ll have a number of potential reactions, everything from matching prices to using incentives through their frequent flyer programs," he said.
NewLeaf has hired a small handful of people for its Winnipeg head office and as the number of planes flying out of the city grows, that will increase as well. Eventually, Young said there will be 750 people based here, including administrative staff, pilots, flight attendants and mechanics.
Once NewLeaf has firmly established itself in the domestic market, it plans to branch out into sun destinations, Young said.