TORONTO – Discount airfare ticket seller NewLeaf Travel is back in business five months after it abruptly shut down to await a federal regulatory ruling.
Travellers can purchase tickets starting Thursday from the Winnipeg-based startup, with the first flight scheduled for take off on July 25.
The company has also added five more destinations to its service, which now include Halifax, Moncton, Hamilton, Winnipeg, Regina, Saskatoon, Edmonton, Kelowna, B.C., Kamloops, B.C., Fort St. John, B.C., Abbotsford, B.C. and Victoria.
When it originally launched in January, NewLeaf billed itself as an alternative to airline juggernauts like Air Canada (TSX:AC) and WestJet(TSX:WJA) by offering bargain-priced “no frills” flights. It advertises flights for as low at $79 one-way including all taxes and fees.
But just a week after the company started selling tickets, it hit some turbulence over whether it needed a licence to operate. NewLeaf contended that it did not require a licence because it does not operate airplanes and only resells seats from Kelowna, B.C.-based Flair Airlines.
In late March, the Canadian Transportation Agency (CTA) ruled in favour of NewLeaf and cleared the runway for the company to resume ticket sales.
“We will absolutely adhere to the CTA’s clarified rules for resellers, and have taken the past few months to review our practices to make sure we are in full compliance,” NewLeaf CEO and president Jim Young said in a statement Thursday.
“We are glad that we took the extra time to plan our re-launch as we wanted to protect consumers and offer them long-term business stability. It has taken a bit of time to get off the ground, but we are excited to now bring to Canada the ultra-low cost business model that has proven successful around the world.”
The company said its flights will still be booked through Flair Airlines, which owns and operates a fleet of Boeing 737-400 jets, and is licensed under the CTA. Flair Airlines will provide the pilots and crew members.
NewLeaf said it can offer discount airfare tickets because it flies out of smaller airports with lower landing fees and makes customers to pay fees for extras like carry-on and checked baggage, priority board and call centre assistance.
Meanwhile, earlier this month, the Federal Court of Appeal agreed to hear an appeal by air passenger rights advocate Gabor Lukacs over whether the CTA has the jurisdiction to permit NewLeaf to operate without a licence, arguing that other companies that have operated under similar business models have been required to hold licences.
Lukacs also questions whether travellers’ rights will be still be fully protected — for instance if a flight is overbooked — if they originally purchased their airfare from a company that doesn’t actually operate the airplanes.
NewLeaf’s chief commercial officer Dean Dacko said that passengers will be protected under Flair Airlines’ licence.
“There is no question, no ambiguity,” he said.
“We’re selling a ticket on Flair Airlines. Flair is 100 per cent licensed. All the protection, the insurance, the coverage that every licensed airline has to have to operate, they have. They have the exact same sense of assurance they have with Air Canada, WestJet, anyone that is licensed by Transport Canada in Canada.”
Dacko said the company is also looking into adding on U.S. sun destinations in the winter.
Ultra-low cost airlines are common in many parts of Asia, the U.S. and Europe where there are more higher-density markets.