The local company that has been working for years to launch an ultra-low-cost airline in Canada said it remains committed to its plan, in spite of a surprise announcement from WestJet Thursday that it will launch its own no-frills carrier by the end of the year.
Gregg Saretsky, WestJet President and CEO, added how current trends in the airline industry has carved out a completely new niche, that of the ULCC.
National Bank analyst Cameron Doerksen said the new airline can only be successful if WestJet is able to negotiate separate lower labour costs with its flight crew who will work in the flights.
The carrier said in a statement that the yet-to-be-named ULCC is expected to start in late 2017 with an initial fleet of ten high-density B737-800s.
"If you look at the ultra-low-cost carrier market around the world, this means a complete unbundling of services that would have historically or traditionally been included in the fare people pay when they are travelling", Richard Bartrem, WestJet's vice-president of marketing and communications, told CBC News.
WestJet did not say where the airline would fly. Such forward-looking information includes, but is not limited to, information respecting: WestJet's intention to launch a new ULCC; the in-service date of the ULCC; and the impact of the ULCC, including that the ULCC will broaden WestJet's growth opportunities, open new market segments and provide a pro-competitive, cheap and cheerful flying experience.
The project's launch comes as Canada prepares to relax curbs on foreign investment in local airlines.
Since WestJet started as a discount carrier with three aircraft in Western Canada, airlines have trimmed the extras and started charging for things such as checked baggage and meals on flights.
There are no details yet on what destinations the service will be flying to.