NEWLEAF GETS GREEN LIGHT When is an airline not an airline
Posted on 03/31/2016 | About Ottawa, Ontario
Discount air carrier NewLeaf Travel will resume selling low-cost seats in the next few weeks now that it has received the go-ahead from Ottawa to continue operations. Chief executive Jim Young said Wednesday, that the company expects its first flight to take off by late spring or early summer. In the meantime, it will work on reintroducing itself to consumers.
“This is a second relaunch for the company,” he said in an interview. “It's our opportunity to make a second good impression.”
Late Tuesday, the Canadian Transportation Agency issued a ruling that said indirect air service carriers like Winnipeg-based NewLeaf would not be required to hold a licence if their flight operator is licensed.
NewLeaf purchases seats from Kelowna, BC-based Flair Airlines and resells then to the public. Flair Airlines, which owns and operates a fleet of Boeing 737-400 jets, is licensed under the CTA.
Young said the company never described itself as an airline, which needs to be licensed, even though he concedes there was some confusion in the marketplace.
Moving forward, NewLeaf will ensure that all its marketing and branding reflects that it is only a reseller, which complies with the CTA decision.
NewLeaf had originally planned to begin flying last month, but suspended operations in January after just a week pending a decision on the licence issue. In that week, it sold more than 4,000 tickets, but subsequently refunded all purchases.
At its original launch, NewLeaf said it would offer flights from Kelowna International Airport and John C. Munro Hamilton International Airport in Hamilton, Ont., to Abbotsford, B.C., Halifax, Regina, Saskatoon and Winnipeg.
It advertised one-way fares from as low as $89, which included all fees and taxes. Extra charges would apply for snacks, drinks and checked baggage.
Although NewLeaf encountered a turbulent start, it says it still expects the demand for low-cost flights to be strong in Canada.
“We need competition and choice. We need a third option in place to create good choices,” said Young.
“We look at this for the long haul. We're going to be here for a long time. A two- month delay at the beginning isn't unheard of in the airline industry when people are trying to get something like this started. Our goal was always to make sure we had a good firm footing for the summer season and I think we're going to be there.”
However, not everyone was happy with the situation.
In a submission to the CTA prior to the decision, Air Canada cited the danger of the CTA taking a “hands-off” approach with flight resellers like NewLeaf.
“Air Canada believes that the person having commercial control and selling the air service should hold a licence and comply with the usual requirements with which 'airlines' are expected to comply,” it said in the letter.
Air passenger advocate Gabor Lukacs also criticized the ruling, which did not specifically address passengers' rights when it comes to damaged baggage and cancelled flights.
NewLeaf said passengers sign an agreement with them, but ultimately, reimbursements for delays and damages will come from Flair Airlines.
Ontario's travel regulator, the Travel Industry Council of Ontario, (TICO) said it was also “concerned” that the CTA does not see the need for more regulations over indirect air service carriers.
“I'm always concerned when consumer protection is lessened in general but I understand the environment we operate under and that balance is always a fine balance,” said Richard Smart, TICO's president and chief executive.