Carrier or No, NewLeaf is Good for Canada

NewLeaf is now able to start selling tickets after getting the go-ahead from Canadian regulators. The brand burst onto the scene at the beginning of this year, promising sub-$100 fares to some of Canada’s most underserved markets.

The truth is that NewLeaf is not an airline at all. It is merely selling tickets under its own brand. All the flights for the people who buy tickets from NewLeaf will be operated by an established charter airline, British Columbia-based Flair Air.

Not really an airline in the traditional sense

The issue was basically that regulators thought that NewLeaf was branding itself as an airline, but would not actually be operating the flights that it sold tickets for. They balked at this indirect business model. 

Soon after starting to sell tickets, NewLeaf announced that it would put its operation on hold while regulators decided what kind of license would be required for NewLeaf's business model. After reviewing licensing requirements, authorities decided to let New Leaf continue to operate.

No new launch date has been set yet, but NewLeaf CEO Jim Young seems intent on getting back to business as soon as possible. "This is a victory for Canadian travelers. We are determined to bring low-cost air travel pricing to the Canadian marketplace. With the completion of the CTA review, we will resume booking in the very near future."

 A low cost airline for underserved markets

NewLeaf still plans to operate a low cost business model. It will sell one-way airfares for between $89 and $149. Destinations will include Kelowna, Abbotsford, Halifax, Hamilton, Regina, Saskatoon and Winnipeg.

Fees will be charged for in-flight food and drinks, checked baggage and carry-ons that have to be stored in overhead bins. The destinations, some of which are underserved, will certainly welcome a new air travel option, even one that will hit them with fees if they travel with anything more than the clothes on their back.

More airlines needed in the Canadian marketplace

The Canadian commercial air travel industry as a whole could use more airlines. Air Canada and WestJet dominate most domestic routes. Niche carriers like Porter Airlines have earned praise for their customer service and their business savvy, but they do not control a large share of the market.

At least to start, NewLeaf will be a decidedly small operation. However, it will be another player in a country that needs more options. Using an established charter service could turn out to be the perfect way to lower risk. And there is plenty of risk. In the past decade, Canadian low cost carriers CanJet and Zoom Airlines both went out of business.

NewLeaf won’t become a major force in Canada right away, but starting small and building slowly could be the best way to stay in business in a marketplace dominated by two airlines.

Now that NewLeaf has been given the green light, we will soon know if it can succeed.

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