New Leaf (ULCC) starts February 12

[DanWEC]

Why have there been so many failed attempts at cut rate airlines that make people miserable? I'd rather pay for a bit more convenience.

Two pretty successful startups offered a better service, not a worse one. Westjet and Porter... I think they're still around....

[I WAS Birddog]

Low Cost Carrier...
Ultra Low Cost Carrier...

I wonder what will the next generation be termed...Subatomic Low Cost Carrier?



I wish the folks at New Leaf and everyone under their employ the best. I hope it is successful

[loopa]

Razor thin profit margins. Sounds like so much fun. Watch WJ match them for a few months and party will be over.

Margins are far too thin in the airline business for a marketing company to hire a separate airline to do the flying for them.

WJ entertained the idea very briefly in the Spring of 95, in an era of $20 oil, and had discussions on the subject with JR and BL, who,at that time were joined at the hip. It took a couple of hours meeting at the Shell Aerocentre in YYC and running the number thru a model to indicate it would have no chance of success.

The idea is to recapture margin, not give it away to an ACMI operation.

Greyhound figured this out the hard way.

The other key mistake being made is to make bases on the basis of where it is convenient, not on the basis of opportunity. Kelowna is a wonderful place, but not a place I'd ever consider as a base for a passenger air service.

As for YHM? WJ has operated there for 15+ years. They know a little something about that market. If there were greater opportunity there, they'd have taken advantage of it long ago.

Other than cheaper labor, which will change the moment unions get involved at Flair, they don't have a cost driver that is cheaper than WJ. They need stage length adjusted costs to be 30% below the current lowest cost operator. I doubt they are more than 10%, but they have probably convinced themselves it's more than that. I see that all the time in these sorts of startups.

Is the plan to lose a little on each seat but make it up on volume and sell future capacity to pay today's bills? We've seen that too. Paging Jetsgo.....

BL at KFC knows where his bread is buttered. He has an excellent relationship with WJA. He won't jeopardize that deal by touching JR's old, maintenance pig 737-400's. That is going to cause JR all kinds of operational and reliability issues.

Just wait till those old birds have to start flying 10 hours a day, 7 days a week with compensatory revenues. I sure hope Flair has 90 days of operating cash from New Leaf tucked away in a bank somewhere....

New Leaf are trying to short cut their way into the business.

ACMI deals have never worked in the past and I see nothing here to suggest that will change anytime soon.

I feel sorry for investors who will subsidize cheap airfares for a few months before losing it all.

Sometimes it's just best to walk away from a dumb idea..

You certainly make some valid inferences based on how things have gone in the past. To put some of your concerns at ease, one of the biggest hurdles that delayed the New Leaf flying at Flair was the funding. I believe the managers are smart in that they won't take on any flying without some generous upfront funding of the program. It sounds like this has sorted itself out for the most part. Whether this ends up being a short term or long term tenure, the impact it would have on Flair is alike any other charter/ACMI program. If the customer continues, Flair makes money prior to brake release, if the customer doesn't continue, it frees aircraft up to do other flying. To my understanding, Flair won't pursue an avenue of flying today in anticipation of tomorrow's funds. If the advance-funding ends, then I would imagine so would this partnership. Don't forget as well that there's another 8 years left on the Shell program (granted they don't cancel this given today's Economy). Granted that bread and butter stream of income continues, plus 737's that are wholly owned by the company, it puts the company at a financial advantage to take on higher risk tenures like New Leaf. Also I don't know if this is old news, but Flair has had its own maintenance for a while now. From my knowledge, the maintenance is no longer provided by KFC. At the end of the day, there's a special relationship between BL and JR that takes them back many years. And it's my guess that long time friends and business partners as such will not let a venture like New Leaf get the better of them. Like Greg Saretsky claims, "competition makes us stronger." So I'd like to hope Greg speaks with integrity and won't take it out on KFC solely due to BL and JR being friends...

It looks however as if there will be a serious need for 737 drivers if this program goes nuts. This is a good thing as I hear another reduction bid is in order at C.North... once Transat flying comes to an end

[Longtimer]

I understand they are partnered with Flair Air which(according to Flair website) 5 B737-400. I didn't know Flair had that many or are plans to lease to support this new scheduled airline. I notice they are in our neck of woods(YHZ) with daily to Hamilton connecting points further west on their route structure. Be interesting to see from Halifax with the mix of AC mainline, JAZZ, WJ, Encore and Porter all heading westbound. Best of luck and hope it all works out..........

The existing Flair 737 Fleet.

http://wwwapps.tc.gc.ca/Saf-Sec-Sur/2/C ... c&m=%7c%7c

Common Name

Model Name

Serial Number

Owner

Owner Regist. Since

C-FLDX Boeing 737-408 24804 Flair Airlines Ltd 2013-09-17
C-FLEJ Boeing 737-4B3 24751 Flair Airlines Ltd 2009-01-30
C-FLEN Boeing 737-4K5 24769 Flair Airlines Ltd 2009-12-04
C-FLER Boeing 737-46B 24573 Flair Airlines Ltd 2009-05-07
C-FLHJ Boeing 737-4Q8 25104 Flair Airlines Ltd 2015-01-08

[North Shore]

To be a wet blanket: I cant see this going long-term at all..the loonie is down again this morning, and Canadian oil has sunk to a new low. There's not enough employed bums to fill all of the seats on offer. A couple of bad passenger experiences will hit the news ( and there will be - its a start-up, after all) and that will be the end - do not pass (jets)Go, and do not collect $200.

[edited to add: two threads on this topic now merged]

[loopa]

To be a wet blanket: I cant see this going long-term at all..the loonie is down again this morning, and Canadian oil has sunk to a new low. There's not enough employed bums to fill all of the seats on offer. A couple of bad passenger experiences will hit the news ( and there will be - its a start-up, after all) and that will be the end - do not pass (jets)Go, and do not collect $200.

Yeah I don't know what to say here. I thought New Leaf was going to end up with their own fleet and was solely using Flair for the start up/interim phase... time will tell I guess.

[DanJ]

I wonder why Flair wouldn't have just done this themselves if there was a need.

[AirMail]

One ugly livery they have. Must be part of the discount to have pre-schoolers draw up the design.

[FICU]

Horrid livery! Puke yellow... How could they have approved that?

[Meatservo]

Horrid livery! Puke yellow... How could they have approved that?

If your puke is bright yellow, I am worried about you.

[Rockie]

Flash in the pan at best. But then I thought the same about WestJet so they'll probably be a huge success.....

[brooks]

This airline could be around for a year or two traditionally speaking. But with razor thin profits I don't see how this airline can grow. This is not Europe its Canada where the provinces are thousands of miles apart and with a population only the size of California. Good Luck is all I have to say.

[plhought]

The schedule seems really restrictive at the moment, and it doesn't look like the reservation system (clunky amelia) is allowing passengers to connect between flights.

Did a little test booking, couldn't book to Hamilton from Kelowna on a Wednesday in March through a Winnipeg connection (although the sched. looks like it actually is the same plane).

Tried a little test to compare - Planned a YLW to YYZ trip in March on a Sunday. Return following Sunday. Assuming no checked baggage but normal size carry-on.
On AC ~700 bucks. Connect through YYC.
WestJet ~680 bucks. Direct flight (flight to Hamilton was ~900)
NewLeaf ~450 bucks. Direct to Hamilton. Extra fee for 'normal' size carry-on. Plan extra couple buck to take the city bus then 23 bucks for GO bus to Union Station (adds extra 2 hours).

So if you are a really cost-conscious traveler you could save a couple hundred bucks on NewLeaf....

But all the extra time, effort, and stress does it really seem worth it?

I just don't think the Canadian Public is really enthused about a RyanAir-esque carrier quite yet. It's not like Europe where one can jaunt over the channel to a party in Amsterdam on a ~ quick 45 minute flight for 25 pounds. We're talking about people really needing to get from here-to-there across a pretty big landmass.

The problem is the poor experiences I anticipate a lot of the flying public will have to endure - and the subsequent media backlash. It's not the airlines fault; their website is actually pretty laid out and uses plain language to explain everything. I just anticipate that a lot of people will book these flights and not quite understand how bare-bones their travel actually is going to be. Throw a IROP in there and people will go nuts.

[Realitychex]

2 planes....that is about 20 pilot jobs.
15 in a couple of years....150 pilot jobs.

Yep complex, it baffles me as well why people who cry that there are no jobs for them dont wish this new company great success,

It is not all that long ago that a little startup was running three jets between places like Calgary, Edmonton and Grand prairie. People said they would never compete with Air Canada. Maybe you have all heard of them...Westjet

I wish them all the best.

WJ ran 3 jets between Calgary, Edmonton, Vancouver, Victoria and Winnipeg. They flew places people wanted to go.

They operated 120 seat jets and devised a network where, even operating into the biggest cities in the west, they never had to rely on O&D traffic. 50% or more of WJ's traffic was connecting or thru.

They owned the jets outright and didn't pay a sub company their operating costs plus a 10% profit margin to operate the flights on their behalf.

They had complete control of the product offering. Who is responsible for customer service? Flair Air, the operator, or New Leaf, the marketing scheme?

Wj operated a daily, consistent, reliable schedule, within the tight geographical confines of Western Canada.

Those are only a few of the considerable differences between WJ and New Leaf.

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

[LousyFisherman]

I fly Air Canada for pleasure travel.

Either this is a definition of "pleasure" I was not previously aware of, or you, Sir/Madam, are, no offense, a masochist.
IMHO
LF

[tbaylx]

It looks however as if there will be a serious need for 737 drivers if this program goes nuts. This is a good thing as I hear another reduction bid is in order at C.North... once Transat flying comes to an end

The recent reduction bid at 5T is downgrading a few captains in Feb (no more layoffs as of now), not due to Transat yet.

Also with Flair's pay scale there aren't going to be too many 5T captains (downgraded or not) that are interested in moving to Flair. A senior 5T F/O makes almost as much as a Flair Captain for far better work conditions.

Still more jobs are good, so wish them success. First ones to challenge the AC/WJ duopoly in quite a few years

[Strobes]

I see promise but with bad timing.

Promise, in the sense that many of you are discounting using an ACMI agreement for the lift. Well, I know of one airline in Canada that did that in the early years, and that airline is now successfully running as Sunwing. Permanently using Flair would be a bad idea, but on the short term, a very good safe bet. Costs are mostly known in advance and early "growing pains" are split between two parties, making fixing them easier.

Timing, that, like North Shore said, the economy is in the crapper more and more every day. Time will tell.

One thing for sure. New Leaf has yhm-yhz on Apr 1 returning the 8th at $189, and the sale price at Westjet for yyz-yhz the same dates are $476. So it's generating a huge amount of buzz.

[fish4life]

I don't fly to Europe ever but how often are companies like Ryan Air or anyone over there have to de-ice with type 1 and 4? I have a rough idea of de-icing costs and on shorter sectors a Type 1 and 4 on a short hop probably makes even AC and WJ lose money on a flight that was profitable.

[loopa]

It looks however as if there will be a serious need for 737 drivers if this program goes nuts. This is a good thing as I hear another reduction bid is in order at C.North... once Transat flying comes to an end

The recent reduction bid at 5T is downgrading a few captains in Feb (no more layoffs as of now), not due to Transat yet.

Also with Flair's pay scale there aren't going to be too many 5T captains (downgraded or not) that are interested in moving to Flair. A senior 5T F/O makes almost as much as a Flair Captain for far better work conditions.

Still more jobs are good, so wish them success. First ones to challenge the AC/WJ duopoly in quite a few years

It was my understanding that with the reduction of captain to f/o process, once transat flying came to an end on top of the massive reduction in the specific work force sector 5t does flying for, that another reduction would occur at 5t. If this is incorrect, I apologize for spreading wrong info.

Also I don't know the pay scale at 5T, but unless you're speaking of the old pay scale at Flair, I don't know of anyone working there that isn't well into the six figures in the left seat. F/O's make 6 figures at Canadian North? That's awesome. I think to each their own honestly. From my understanding Flair pilots work 8-10 days a month, sometimes 11 and 12 days / month but that is rare. If we want to simply do an apples to apples comparison of 737 flying, for the number of days worked, they are not treated too poorly given the size of the airline. Then again, better working conditions and work for a company that lays off its pilots, or be able to weather the storm and suck up some conditions in return? After all, it's a small company with 7 airplanes. Can things be improved? Always. But money as we know is only part of the equation. Anyway, my point was that there will be a need for 737 pilot's if this becomes successful. It also seems that there's some really nice pay incentives if you go there type rated.

[JoeShmoe]

It looks like for more then a couple flights that new leaf does they are cutting the price by more then half of what AC and WJ are charging. I can't say much about their business plan, but Im pretty sure those planes are gonna be full at those prices. I think a whole new group of people that wouldn't otherwise be flying will fly with new leaf at those prices.

The website is pretty awful though, if there's any foreshadowing for this company, it would be how much the cheaped out on the website.

[awitzke]

Well considering the site is now down because it got the hug of death...

[springlocked]

There is only 1 ULCC here in the US. The FO's can effectively make over 6 figures, during their second year.

- This is just a recent event in the US of A. Maybe the same will happen here if Canada follows suite with crew requiements as well. South of the border they went through a period where they had to park aircraft because no qualified f/o's. With the increase of licencing requirements it created a pilot shortage and the law of supply and demand kicked in.

From my point of view I could give a rat's about this viability or success of the present attempt to tap into the Canadian market. Geographically it will be difficult but since 99% of our population lives within 100 miles of the US border. This has and will be a large factor for either success or failure.

When I see this type of start up I get upset since it will do nothing about improving the crew working conditions. The whole industry will feel the impact. Salaries will suffer, working conditions will be regressing. Pilots will be working more for less money. It will even impact contract negotiations for the larger carriers. Most know the rep of Ryan Air - jeezus plugging in your mobile on company power is subject to dismissal or at the very least discipline. Paying for your own recurrent training etc. I know it can be argued that Flair is crewing and operating but depending on agreements they will need a plan to cut costs to allow for money to be made. Crews are the easiest target for the bean counters. Can you spell Motel 6

[HiLo]

There is only 1 ULCC here in the US. The FO's can effectively make over 6 figures, during their second year.

- This is just a recent event in the US of A. Maybe the same will happen here if Canada follows suite with crew requiements as well. South of the border they went through a period where they had to park aircraft because no qualified f/o's. With the increase of licencing requirements it created a pilot shortage and the law of supply and demand kicked in.

From my point of view I could give a rat's about this viability or success of the present attempt to tap into the Canadian market. Geographically it will be difficult but since 99% of our population lives within 100 miles of the US border. This has and will be a large factor for either success or failure.

When I see this type of start up I get upset since it will do nothing about improving the crew working conditions. The whole industry will feel the impact. Salaries will suffer, working conditions will be regressing. Pilots will be working more for less money. It will even impact contract negotiations for the larger carriers. Most know the rep of Ryan Air - jeezus plugging in your mobile on company power is subject to dismissal or at the very least discipline. Paying for your own recurrent training etc. I know it can be argued that Flair is crewing and operating but depending on agreements they will need a plan to cut costs to allow for money to be made. Crews are the easiest target for the bean counters. Can you spell Motel 6

From what I understand, in Europe, may FOs are starting straightaway on a 737/'Bus/JungleJet/CRJ ( which sent a zap down my back). Here, on the other hand, there are an abundance of pilots working on turboprops, many at GGN wages, living in places that end in Lake, Bay or Lookout. I'm sure there are many who would jump on the opportunity to fly a "real airliner" and live somewhere with a Walmart. I think it's called "shiny jet syndrome," and I'm sure it's easy enough to contract when you're flying a rust bucket.

The skinny: no shortage for Flair, just for those who pay less and have worse wawcon.

[brooks]

I don't fly to Europe ever but how often are companies like Ryan Air or anyone over there have to de-ice with type 1 and 4? I have a rough idea of de-icing costs and on shorter sectors a Type 1 and 4 on a short hop probably makes even AC and WJ lose money on a flight that was profitable.

ZING!

[flyinhigh]

From my point of view I could give a rat's about this viability or success of the present attempt to tap into the Canadian market. Geographically it will be difficult but since 99% of our population lives within 100 miles of the US border. This has and will be a large factor for either success or failure.

Its funny how if someone wants to start an airline, EVERYONE jumps on them for WAWCON before they are even out of the gate. Flair is not that bad at all, maybe pay could be better, but if you need to make 200K per year to live you did something wrong in your life.

I will New Leaf all the best and hope they do well, especially those that have signed on and their families depend on it.