You may soon have a lot more choice when it comes to travelling the skies.
Canada Jetlines, Jet Naked, and NewLeaf Travel, three Canadian aviation start-ups, will enter what is perhaps the country’s most daunting industry within a year.
The biggest challenge, of course, is finding a way to compete with Air Canada and WestJet. As the Financial Post notes, engaging in a price war with Canada’s current airline duopoly will not end favourably.
“With any startup, you’re playing a dangerous game if price is your key differentiator. You will normally have bigger, more powerful competitors who can match your price,” says David Tait, a key figure in Virgin Airlines’ success.
All available details about the three airlines’ service, however, suggest that price really is the only key differentiator between what’s being offered by the Big Two.
Jet Naked’s Tim Morgan, a co-founder of WestJet, laments how WestJet has separated itself from its low-cost roots, which suggests his new venture will employ the same kind of bare bones approach that has doomed many airlines trying to break into Canadian skies previously. Jetlines promises to offer fares that are 40 per cent lower than average, while NewLeaf has also stated its goal to lower airfares.
So, what else separates the three new carriers from what’s available now?
For Jet Naked, it’s “keeping things simpler.” Jetlines will employ en extra flight attendant on board so crew will be readily available when passengers want to make purchases, and NewLead will look to offer bundled fares that include ground transport and accommodation.
We’d love to see more competition in the skies, but it’s hard to believe such marginal tactical shifts can disrupt the current market.
Low-cost carriers are also forced to operate on exceptionally slim margins, which is not the ideal climate for Jet Naked and Jetlines, who are already dealing with financing purgatory, to get off the ground in.
As Rick Erickson, managing director of aviation consultancy RP Erickson & Associates, points out, a new airline needs to have “exceptionally deep pockets” in order to succeed.
We wish them best of luck in what will be an astronomically steep ascent.
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