Swoop has yet to pick up a single customer, but Canada’s newest ultra-low-cost carrier is already talking about expanding into a market that is just taking off.
Launched by WestJet Airlines Ltd., Calgary-based Swoop started booking customers this month for flights that begin this summer connecting five Canadian cities.
It is offering discounted fares on a handful of routes, such as $39 for a one-way trip between Abbotsford and Edmonton, or $69 between Hamilton and Winnipeg.
Swoop will start flying in June, with three Boeing 737-800 planes. WestJet CEO Gregg Saretsky is considering adding more aircraft to its discount carrier fleet, both in the short and long run.
“We’ll have six aircraft flying in Swoop by September and all 10 by next spring,” he said on a recent conference call.
“Our assessment is that the size of this market is 30 to 40 aircraft and that will be driven by earning the returns that we’ve set for ourselves.”
It’s aggressive talk and speaks to the potential opportunity ahead.
It’s also setting the stage for a fierce dogfight — with cheaper fares for travellers — in an emerging area of the Canadian travel industry.
Ultra-low-cost carriers (known as ULCCs) such as Ryanair and Easyjet have been successful in many other countries, although new players are only beginning to dip their toes into Canada.
Such airlines offer thrifty travellers bargain-basement prices, while charging customers for additional “unbundled” services, such as food and beverages, checked baggage or extra legroom.
For instance, WestJet will charge at least $36.75 for carry-on luggage booked online, and $26.25 for the first checked bag.
“We know that in other markets like in Europe and the United States, there is a chunk of the flying population who want ultra-low cost,” said Marvin Ryder, a professor of marketing at McMaster University in Hamilton.
“It’s basically like hopping on a Greyhound bus, rather than hopping on a limousine.”
But Swoop won’t be alone in the market.
Kelowna-based Flair Airlines Ltd. is already offering ultra-low-cost flights to seven cities — Toronto, Hamilton, Winnipeg, Edmonton, Abbotsford, Kelowna and Vancouver — and expects to expand in 2018.
Another proposed carrier, Vancouver-based Canada Jetlines Ltd., has announced plans to launch in late summer or early fall.
At Flair, the company flies up to seven Boeing 737-400 planes and new CEO Jim Scott wants to bring on two larger 737-800 jets later this year.
The company is considering adding southern-bound flights to possibly Mexico and the U.S. in 2018, he said in an …read more