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Ultra-low-cost grows market, NewLeaf says

By Mike Youds
July 26, 2016 11:17 A.M.
NewLeaf passengers fly with Flair Airlines out of Kelowna in 737-400 aircraft.

Affordability takes a giant leap forward for travel to Edmonton and Victoria when discount travel firm NewLeaf adds Kamloops to its route schedule starting Saturday, July 30.

The ultra-low-cost air travel company — NewLeaf is not an airline — is stirring up not only the air travel market but coach and private vehicle travel as well. A one-way fare out of Kamloops, for example, is $79 including taxes and fees. That’s less than a Greyhound ticket to the same destination and a lot less than the cost of driving in terms of fuel consumption alone.

NewLeaf markets seats provided by Flair Airlines of Kelowna, where NewLeaf landed its first flight Tuesday.

WestJet, which launched 10 years ago as the discount challenge in the Canadian market, announced additional routes Tuesday after reporting a 40 percent drop in profits in its second quarter compared to last year. Revenues held steady for the airline, though. 

But NewLeaf isn’t stealing the market, primarily it’s opening up an entirely new niche in the marketplace, said Dean Dacko, chief commercial officer.

“Sixty percent of Canadians who want to travel can’t afford to,” Dacko said after NewLeaf’s first flight left Hamilton, Ont., Monday for Winnipeg. Eleven markets were launched yesterday with more to come, including Kamloops. Dacko will be at Kamloops Airport early Saturday for the inaugural landing here, a flight out of Edmonton.

“We’re doing this for the benefit of Canadians coast to coast.”

Many flights are booked solidly but the average is 95 percent capacity, he noted. In terms of bookings, it was their biggest day.

Initial flights have confirmed every aspect of the NewLeaf’s business model, Dacko said. They were filled with families of four or five, happy to avoiding long hours in a minivan, he said. Families that could not have afforded travelling by air together can financially justify the cost.

Canada has been slow to respond to what is essentially an international trend.

“I think for the most part in the western world, every other country has a low-cost ultra option,” he said, but barriers were too high in Canada up to this point.

While the NewLeaf option might be considered no-frills travel by some, the flights are relatively short, making that less of a deterrent. Carry-on baggage is discouraged.

“Our strategy is to keep the cabin empty.”

Passengers are charged extra for carry-on and checked luggage, priority board and call centre assistance.

The company’s takeoff was delayed while its licensing status was reviewed by the Canadian Transportation Agency. It was cleared to fly without a licence in March.

WestJet is adding 41 new weekly domestic and international flights from Vancouver to Kelowna and Prince George, Toronto, Los Angeles, Honolulu and the Mexican cities of Cancun and Cabo San Lucas.

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