New Leaf (ULCC) starts February 12

[justwork]

They are going to really struggle to make this work. It's not a good plan.

Haven't you been saying that about Porter for, I don't know, a decade? Has it been a decade yet? One thing I've learned from reading your articulate, well thought out, and seemingly educated posts is that your crystal ball is as clear as everybody else.

[Realitychex]

Like Wardair, Porter has managed to survive in the business by generating cash from sources exclusive of flight operations.

Porter has been perpetually for sale for many, many years. Their operating numbers have circulated in very, very tight circles periodically since the IPO attempt 5+ years ago.

As long as they use external sources of cash to underwrite the operation, they can continue on for a long time. Most airlines don't have that luxury.

Ultimately, they need an endgame. They probably felt the C Series at YTZ was it. With that option, at least from YTZ, shut down, I'm not exactly sure what that is. I'm not sure they know either, but with the cash from the sale of that terminal, they have some time to figure something out.

As for New Leaf, it's the same deal. If investors are prepared to pump the sort of cash that was pumped into Virgin America year after year, they could last for a long while.

I have my doubts that will occur, especially with the plan they've come up with.

It's a great business plan for Flair as long as they continue to get paid. And that's the problem with the plan.

[brooks]

I think this New Leaf thing will be around for a few years at most. To sell an $89 fare and the base fare works out to $35 of revenue for the company after tax it makes it clear that there is no money in it for investors. As someone mentioned before, a type 1 spray on the $89 fare makes it less profitable. Should we consider a type 4? If Porter, Enerjet, or Canadian North thought there was money to made they would have started a run say YHM to YWG. For the short term this will be nothing but a pain in the @ss for the three biggest operators in this small populated large country. Let's hope people don't loose their job over this venture.

[leftoftrack]

With record profits and record load factors and a massive increase in capacity something tells me there is room for another carrier in the country. They to should be offered the same protection that westjet was afforded limiting the expansion of the established carrier's into 1major focus city. If the plan succeeds great we add alternatives to the duopoly if the plan fails then atleast they tried.

[loopa]

If you consider the 3 companies at face value.

WJ/AC you can buy the cheapest fare, pay for bags, pay for reserved seats, and pay if you want anything more than water/pop and bits & bites / pretzels.

NLF you buy the cheapest fare, pay for carry on if you want, or pay for checked bag if you want, pay for water, pay for snacks and you still come out ahead financially on similar routes.

WJ/AC have a brand in that their service is known, and people know what they are paying for.

NLF will probably not have any branding in their service as it's like they say "no frills" flying.

Look at what WJ has done recently. It used to be 25 bucks to sit plus on WJ flying YYC-YVR. 25 x 6 seats across one row = 150. Now it's 50, and they block the middle seat. 50 x 4 seats across 1 row is 200 dollars. They just boosted profits on their usage of plus seating by 33%. Mind you there are less souls on board as a result, but that increase in revenue, decrease in aircraft weight has ought to punch out some increased profits. I believe YVR-YYZ is like $100 / plus seat.

The few items which leaves people skeptical is how they can make money on 89-150 dollar fares, how financially viable it is to use Flair, and the routes they are offering.

Either way our industry has turned into a system where you buy to get more. It works at AC/WJ level. If NLF has identified a cost structure where they can make money on your nominal 89 dollar fare that becomes $150 (considering the addons), and the consumer still coming out financially ahead, then the ULCC will work and they will be successful.

[floatplanepilot]

Voluntarily suspending service during CTA review.

http://globalnews.ca/news/2461220/newle ... ng-review/

[AlphaOne]

Great start! I was wondering when the CTA would chime in..

[Realitychex]

Great start! I was wondering when the CTA would chime in..

I guess it's better to blame Government rather than acknowledge that an investor and key partner walked from the deal.....

[loopa]

Realitychex, where did you get your information that a key investor/partner walked away?

[SnotRocket]

'Memba Dis?

http://aviationweek.com/awin/canadian-l ... operations

[brooks]

Something is up. Perhaps lack of ticket sales and the sound of money flushing down the toilet is more likely.

[co-joe]

Why do you guys keep citing the poor economy as a reason a new start up will fail? The way I see it, the less money people have to spend on travel the more attractive a LCC is. We're not talking sun and fun vacations here. I don't vacation in Winnepeg or Hamilton so if I'm going there it's because I absolutely have to...

[Old fella]

You mean to say the bright lights who run this new start-up didn't think it necessary to have all the i's dotted and t's crossed when dealing with all the regulatory authorities be it TC or CTA, especially the CTA who regulate carrier liability and the business end of operations as it pertains to passengers. Methinks there is more to the story, but who knows.............

[Realitychex]

Realitychex, where did you get your information that a key investor/partner walked away?

A little bird told me last Friday when the decision was made.

Two guesses who pulled out, and the first one doesn't count.

[Airbrake]

Realitychex, where did you get your information that a key investor/partner walked away?

A little bird told me last Friday when the decision was made.

Two guesses who pulled out, and the first one doesn't count.

Who was invested originally?
I am certain you were not.

[tincanflyer]

Gotta love the I have information but not gonna tell......well I'll tell you enough to make me look important and get some attention.

[Troubleshot]

I actually wrote the CTA about New Leaf, I had a lot friends ask me about this airline so I asked a few questions . I was curious who would be liable for claims violating CTA's rules for "air carrier" services. This is what they replied with:

Thank you for contacting the Canadian Transportation Agency.


NewLeaf is an air travel company that will partner with Flair Airlines, which will operate the aircraft. I can confirm that Flair Airlines holds a licence and a Canadian Aviation Document, and meets all insurance requirements.

As business models in the airline industry are rapidly evolving, the Agency is currently reviewing whether companies who bulk purchase all seats on planes and then resell those seats to the public, but do not operate any aircraft, such as NewLeaf, should be required to hold a licence.

The Agency is consulting with Canadians on this issue. Information on the Agency's consultation and how to participate can be found at: https://www.otc-cta.gc.ca/eng/consultat ... -a-licence. Interested persons may submit written comments no later than January 22, 2016.

While this review is under way, the Agency will not require companies such as NewLeaf, which bulk purchase all seats on planes and then resell those seats to the public, to apply for a licence.

Once the consultation is over, the Agency will review and carefully consider the submissions before determining whether such companies should be required to hold licences.

The Agency will continue to carefully monitor this issue. Should NewLeaf's business model evolve into that of an air carrier, the Agency will require NewLeaf to hold the appropriate licence.

In addition, by law, all carriers operating air services to, from or within Canada are required to have a tariff and to make their tariffs available to the public at their business offices. The rights and obligations of air passengers and airlines are set out in these tariffs — the airline's contract with passengers.


As NewLeaf has partnered with a licensed air carrier, Flair Airlines will operate the air services. Flair Airlines is the licensed carrier in this situation and, as such, it is Flair Airlines’ tariff that applies to this air service.


As per the Air Transportation Regulations, Flair Airlines is required to have the appropriate tariff in place and to make it available to the public at its business offices upon request. In addition, Flair Airlines’ tariff must include terms and conditions related to a number of matters, including the carriage of persons with disabilities, acceptance of children, compensation for denied boarding, failure to operate the service or failure to operate on schedule, limitations of liability for passengers and baggage.



I hope this proves useful.



Office des transports du Canada / Gouvernement du Canada
info@otc-cta.gc.ca / Tél. 1-888-222-2592 / ATS: 1-800-669-5575
Site Web: https://www.otc-cta.gc.ca/fra

[Realitychex]

Gotta love the I have information but not gonna tell......well I'll tell you enough to make me look important and get some attention.

It's called protecting sources. Sorry.

The decision to pull the pin was made at least last week. I don't know the precise day, but I know
the press release had been written by Friday afternoon. It was decided to frame the decision around the CTA, even though the CTA had already given its blessing to the current arrangement. Why they didn't release it late Friday or on the weekend to further bury the story is beyond me. It further illustrates how inexperienced New Leaf is in every respect.

Positioning it as a "little guy vs big bad government" story gives New Leaf faint hope to try and replace two very key elements to their plan: equity and lift.

Had they announced that this particular investor and partner had walked, it would have been obvious to all, including potential new investors, potential operators of the lift they now require, not to mention the general public, that the jig was up.

Doing it this way gives them a window, a very small window mind you, to fix the problem.

I would be very, very, very surprised if New Leaf is able to resurrect the deal.

I strongly suspect it will wither and die on the vine. This occurring will make it just that more difficult for the two other paper ULCC airlines to raise the funds they've been looking for over the past 24 months..

[wallflower]

HO HO HO, cheap and nasty says it all. This is hilarious, perfect example of what you get when two screw ups get together, let's hope they both go down the toilet.......

[skat0r]

You people amaze me. You keep complaining that there is no jobs available and yet you want new start ups to go down.