Ex WJ execs starting up another carrier. Any info?

Hey TS I think you and I were both watching CTV newsnet this morning. I all I heard was 4 ex execs including Tim Morgan. Should be interesting. I sure hope they dont keep the name "newair"

Yep, that's it. The impression I got was this company will be a sched operstion, probably low cost.

To be launched as a charter-type operation focusing on (secondary) cities underserved by AC & WS with either 737-700/800 or MD80's. Similar to Allegiant in the US. I've read the prospectus or whatever its called and they seem to think the charter market is in need of a Western Canadian based carrier. They listed themselves as the only charter airline to be based out of Western Canada which is fine but the charter market is as competitive as it ever has - both in East and West Canada.

Former WestJet bosses hatch NewAir
BRENT JANG

From Monday's Globe and Mail

October 22, 2007 at 2:20 AM EDT

Four former WestJet Airlines Ltd. [WJA-T]executives, led by co-founder Tim Morgan, are drawing up plans to launch a new Canadian carrier.

The fledgling venture's first round of private financing has been oversubscribed, and the second phase is now under way, industry sources say.

Using the name NewAir & Tours, the business model is still being fleshed out, but the goal is to fly travellers in smaller cities to larger centres and U.S. holiday destinations.

NewAir's 55-page proposal is modelled after Allegiant Travel Co., a Las Vegas-based firm that runs a vacation division and low-cost airline with a fleet of 32 McDonnell Douglas MD-80 planes flying scheduled and charter service.


An Air Canada jet takes off as a Westjet plane taxis on the ground behind it at Calgary International Airport. (Larry MacDougal/For The Globe and Mail)

WestJet Airlines


The four NewAir organizers have a proven track record at WestJet, and hope to repeat the tale of success from humble beginnings. WestJet will be sensitive to the upstart's potential impact, even though NewAir wants to emphasize charters and avoid direct attacks on scheduled service, an industry insider said.

Calgary-based NewAir believes it will carve a niche by pursuing routes either neglected or underserved by WestJet and Air Canada.

Mr. Morgan, former WestJet executive vice-president of operations, is spearheading the plan with William Lamberton, former vice-president of marketing. They are being supported by Gareth Davies, former vice-president of technical services, and Alan Mann, a former WestJet accounting executive.

Mr. Morgan and Mr. Lamberton declined to comment on their NewAir proposal. Mr. Davies and Mr. Mann couldn't be reached for comment.

“They're trying to fly under the radar and avoid head-to-head competition against WestJet and Air Canada,” one industry insider said.

Calgary-based WestJet, launched in 1996 with just three planes serving five cities, has grown to a fleet of 68 Boeing 737s in a network of more than 40 destinations.

Sources say NewAir's offerings could include charter flights with a seasonal schedule. For instance, there may be weekly non-stop service from Fort McMurray, Alta., to Vancouver for part of the summer, and that could switch to Fort McMurray to Reno, Nev., in the winter. Consumers could choose to bundle flights with hotel rooms and, in some cases, tour packages.

Others have tried and failed to make a go of it this decade in battling WestJet and Air Canada: Canada 3000 and Roots Air shut down in 2001, Jetsgo Corp. closed operations in 2005, CanJet Airlines halted scheduled flights in 2006 and Harmony Airways wound down earlier this year.

Mr. Morgan, who resigned from WestJet in 2005, co-founded the carrier with Clive Beddoe, Donald Bell and Mark Hill. Mr. Beddoe, WestJet's executive chairman, became the lone co-founder left at the airline after Mr. Bell departed this past July as executive vice-president of corporate culture. Mr. Hill resigned in 2004 as vice-president of strategic planning.

Planes under consideration by NewAir include Boeing 737s (700 and 800 series) and McDonnell Douglas MD-80s, sources say. Depending on how the concept unfolds, service could start in the spring of 2008. But NewAir is seeking to be nimble and flexible, so the launch could be late next year, if more time is needed to nail down tour packages. Seed money for the venture could vary from $70-million to $100-million, all from private placements with investors.

“It's premature to say how much money needs to be raised. No destinations, no planes and no departure points have been determined yet,” said an aviation official familiar with NewAir. “The business model is fluid and moving. It's in a state of flux.”

Consumers in smaller centres across Canada complain that they have to increasingly travel to major airport hubs on connecting flights before getting to their final destination. So, NewAir has an opportunity to meet pent-up demand for non-stop leisure charter service from point to point, another official said.

Mr. Lamberton already runs Classic Canadian Tours, packaging December trips for consumers in markets such as Brandon, Man., Kamloops, B.C., and Terrace, B.C., who want to visit friends and family in Calgary and Edmonton. Classic Canadian also flies from Calgary and Edmonton to Klondike escapes in Whitehorse and has trips to see polar bears in Churchill, Man.

While NewAir would likely initially focus on Western Canada, the venture could easily expand into Central Canada.

Porter Airlines Inc., which celebrates its first anniversary tomorrow, currently flies from its base at Toronto's island airport to Montreal, Ottawa and Halifax. Porter hopes to expand within four years to smaller Ontario sites such as Sault Ste. Marie and Sudbury – two cities that would also fit NewAir's target market.

A hard nut to crack with oil at $90.

Well, sounds like they know what they're doing. Let's hope they pay their pilots well.

Thanks for posting the Globe article. As I peered throught bleary eyes this morning at Business News Network, their news ticker stated "Ex Westjet Founder Starts Rival Airline". One would get the impression that it would be trying to go head to head with Westjet. As the Globe article states, that would appear to not be the case.

Good luck to Tim and Crew

I had the same impression.

They make it quite clear in their prospectus that they do not want to go head-to-head with WS or AC. They want to specialize in serving secondary markets that are underserved by WS and AC.

Good news.......... and hope it gets off the ground. Here's wishing the customer base, prospective employees and their management structure the very best.

People from the western part of the country have a knack for making things work for them!!

I think they will start this company then in a few years sell it to Westjet to suck more money out of Westjet to make themselfs and shareholders more rich!! Not sure this is a good thing for Westjet. Also will they be going after Westjet's charter work!

Well, good luck to them but I'm having my doubts. They may start out under the radar, 'avoiding' WJ and AC, but for how long? There won't be many underserved markets anywhere soon enough as WJ and AC both expand.

As for the headline... just more irresponsible media at work.

You know I got to thinking, my buddies work out west in Fort Mac and other places, a mid-winter YMM-LAS, their buts would be in the seats every month on their days off for the right price.

I'm not so sure about the charter-only bit. Was reading the Globe today in the plane (required reading material) and it seemed to indicate these guys want to serve smaller communities to bigger centres that are "underserved or ignored" by WJ and AC. Didn't mention the word sched but it certainly seemed to imply it. You guys catch it?

Yeah I assumed it was sched too...to markets not already served. Makes me wonder at what point the "unique" Canadian domestic market (small population base vs. geographical size, predominantly oriented east-west) will be considered saturated...

Yep... I believe the article mentioned the intent was to serve the smaller underserved and ignored markets and would also supplement operations with seasonal charters. I have to wonder though, given that many of the smaller markets are currently served by either AC through Jazz, to some extent WJ and by many smaller privately owned companies that operate into some major hub. How much profit can be made on some of these routes with a larger jet, given the nature of the marketplace? Are Tim & Co. bored with their millions that they need something else to do?

Tony, as far as paying their pilots well... I doubt it. If/when they get off the ground they will probably offer up the same kind of pay / incentive plan that WJ offered when they first started.

After digesting some of the news, I'm starting to think something is amiss here. They're planning on launching in Spring 2008 but they haven't finalized an aircraft type yet.

They plan to fly under the radar. How the hell do you do that with a 150 seat aircraft (a king air into yxd seems to be a little more stealthy)

Let's not kid ourselves here people. Westjet sees them doing a YMM to YVR, do you think they'll give it a pass allowing Newair to build a cash flow base?

Their business plan hasn't got routes or a definite aircraft type but they want to raise 70 mil from investors. How do you legitimately do any kind of revenue projections? "Well if we fly from Kenora to Kelowna in an MD83 we'll make this amount of revenue or if we fly from Flin Flon to Deer Lake in a 737-800 we'll make this amount of revenuee"

Just doing some armchair quarterbacking, but I still wish them luck

STW

P.S. Resigned my a$$

As far as I'm concerned, this is an in-your-face at WJ and everyone who works here. There's no way they'll operate an airline sized plane anywhere out west without competing wtih WJ, AC or Jazz. I hope to hell the power's that be at either AC or WJ won't give this company an inch.

Well if any company knows about slaps in the face, it should be the Holy Westjet.

How about the slap that Tim received. A founder and a significant reason for the success of the company. Probably the greatest force for the way the pilots and the employees are treated and what does he get for his efforts: a swift kick in the ass out the door (and, I know, a few million bucks in stocks) but he sure as hell didn't resign.

Just out of curiosity, when does AC & Jazz union contracts come due? A strike would open a lot of skies for a short while to get some market share, and there would likely be many pilots to choose from. If you had all your ducks in a row, someone could certainly jump on such an oppurtunity and make it big...

Four1oh wrote:As far as I'm concerned, this is an in-your-face at WJ and everyone who works here. There's no way they'll operate an airline sized plane anywhere out west without competing wtih WJ, AC or Jazz. I hope to hell the power's that be at either AC or WJ won't give this company an inch.

You might be right bro but it ain't no slap in the face yet. They have a long way to go before you can give them that much credit. Like Mr. Carty said in the Globe, they will have to be "different" in order to succede. So if AC is apples and WJ is oranges (sorry), what else is there? Good luck to them. I have always said the more-the-marrier. But it won't be easy for them. Look at this way, if they out-do WJ with those 737s, you're already trained!!

Stop the world, I think you heard a different story than I did, and it was time for him to go. Way overdue, actually.

if they'll truly stay under the radar, then I wish Tim good luck with the airline vision he prefers. That's it, that's all.

WestJet outgrew Tim's vision. Whether he liked it or not, that's another story.

If he pays pilots like he did at the beginning of WestJet, he'll have lots of takers, including some that currently fly for WestJet.

It is interesting that the 2 people at the helm of this are both people who had WS outgrow their vision and/or abilities.

Tim was a good operator when WS was considerably smaller than it is now. Bill never wanted WS to expand to the US. Maybe their caution will one day be proven right but they were no longer the right men for the jobs.

Huge Hammer wrote: they were no longer the right men for the jobs.

i think, more accurately, the job was no longer right for them :/