New airline betting that hope will triumph over experience

“Starting an airline is like getting married for the second time,” goes an old joke. “The triumph of ‘hope’ over ‘experience’.”

Despite there being more than just a grain of truth behind that joke, there continues to be every so often a new attempt to launch an airline with the hope of making millions of dollars in profits.

The names of the startups have come and gone at Winnipeg Airport over the years. Canjet, Vistajet, Jetsgo and Greyhound Air each tried their hand at offering Winnipeggers a low-fare domestic alternative to Air Canada and the now-defunct Canadian Airlines. Zoom and Iceland Express did the same on international routes. Royal and Canada 3000 tried a mix of domestic and international services.

Of all the post-deregulation startups to fly into Winnipeg, only one still serves the city: WestJet, which launched out of Calgary in 1996 with three second-hand Boeing 737s, and is now the country’s second-largest airline.

The industry’s high infant mortality rate is not deterring Jetlines, a Vancouver-based corporation that hopes to begin flying around western Canada in 2014 as a self-styled “ultra low cost carrier”.

In a Nov. 14 business briefing, Jetlines outlined its plan to offer lower fares than either Air Canada or WestJet on routes from its Vancouver base, including a $143 one-way fare to Winnipeg. The airline would charge not just for food, baggage and seat selection as its competitors do, but even charge customers to call its reservations centre, to pre-board the aircraft, to get their bags put on to the baggage belt first, and even to pay.

Yes, that’s right: you would have to pay to pay. At least as long as you’re using a credit card, on which the airline will levy an extra service charge. Use a debit card instead, which transfers the cash directly from your bank account to the airline’s, and you can avoid the extra cost.

How much they would charge is not yet known, but Ryanair, a European low-cost carrier which Jetlines plans to emulate, charges $29 Cdn. to book through a reservation centre and $10 for priority boarding, and collects a two percent handling fee on the total amount charged to a customer’s credit card.

But while Jetlines follows a model used to some degree of success by other low-cost carriers such as Europe’s Ryanair and EasyJet and the U.S.A.’s Allegiant and Spirit Airlines, there appears to be a flaw in their early plans.

Ryanair and EasyJet succeeded in Europe in no small part due to their ability to sell the dream of travel: of London’s work-hard-party-hard City types being able to spend the weekend living it up in Latvia or to escape to second homes in France or Spain with the same ease that Winnipeggers flock to cottage country. Or of Germans and Scandinavians being able to fly to Poland for the cheap cosmetic surgery they can’t get back home.

It doesn’t hurt that European Union member-states have abolished limits on the value of goods that citizens can bring home from each others’ countries.

Jetlines, on the other hand, plans to start with a list of destinations that doesn’t exactly get the wanderlust going, as the Financial Post reported:

Jetlines would be based in Vancouver and aim to fly to underserved markets or those without any service. Potential destinations include Prince George, Winnipeg, Kamloops, Prince Rupert, Regina, and Edmonton.

Eventually, it aims to add international destinations like Orlando, Cancun, Las Vegas and Cabos San Lucas.

Why the airline does not start with the latter set of destinations is a bit of a mystery. Spirit Airlines has succeeded in the U.S. by focusing on taking northerners away to warm southern destinations. Allegiant specializes almost entirely on north-south travel.

Jetlines, on the other hand, is betting its early survival on being able to stimulate demand for flights to and from a set of cities of which only one — Vancouver — is among North America’s top 40 tourist destinations.

Stimulating demand for domestic travel within Canada by offering low fares will be difficult for other reasons as well. Unlike many European cities, which are densely populated, explorer-friendly and (particularly in the larger centres) blessed with an active nightlife, many North American cities away from the coasts are dreary replicas of one another. All but a few offer little more than a past-its-prime central business district that is deserted more than half the week, and little or nothing that is interesting to explore on foot aside from a somewhat revitalized old warehouse district.

Even cities like Atlanta and Dallas — cities with a population and head office base to (theoretically) support a cultural and nightlife scene that would make them tourist magnets on other continents — are barely thought of as tourist destinations at all outside of the smaller cities in their economic orbits.

Thus, Jetlines is taking a grand risk by focusing first on going head-to-head with Air Canada and WestJet to cities that have little price-sensitive, mass-market tourist appeal. Instead, it could be carving out a niche of its own selling the dream of cheap city-breaks in North America’s more attractive coastal cities (aside from its Vancouver home base), or even selling more imaginative packages, such as the ability to explore Havana — a city that should be a far stronger tourist draw and far more accessible than it currently is — before it emerges from its 1950s time warp.

Wish the new airline luck. Just by virtue of being in that industry, they will need it.


About theviewfromseven
A lone wolf and a bit of a contrarian who sometimes has something to share.

One Response to New airline betting that hope will triumph over experience

  1. johndobbin says:

    It does seem a longshot. I think the fact that they don’t have the money in place from the start also will hold them back.

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