Canadian Airline Says New Flights Will Be “As Cheap As A Pair of Jeans”
Jennifer Billock September 13, 2017
Panorama of Toronto skyline at sunset in Ontario, Canada.
Fly by the seat of your pants – or at least by the cost of them.
Next summer, a new airline will open for business: Canada Jetlines. It’s going to be an ultra-low-cost carrier based out of two hubs about an hour outside Toronto each, at John C. Munro International Airport in Hamilton, Ontario, and at the Region of Waterloo International Airport. The airline will fly across Canada and into Mexico, the U.S., and the Caribbean. And because it’s ultra-low-cost, tickets will be relatively inexpensive.
“Our target customers are people who want to save money,” CEO Stan Gadek told the Business News Network, reported by CTV. “People ask me how low are those fares going to be? And I will tell you they will be the same as the cost of a pair of jeans.”
So far, no more information on prices has been released. Gadek says, though, that the low fares that will be offered by Canada Jetlines are in response to customers tired of paying high prices for airfare. The new airline will include seat selection, checked bags, and drinks in-flight a la carte.
“Canadians are overpaying for air travel and we intend to change that by offering customers the freedom to select the travel experience they want,” Gadek said in a release.
The Canada Jetlines planes will be all economy-class seating, holding 189 passengers. Gadek expects that the airline will be stiff competition for the larger carriers.
“We will have the lowest costs compared to any Canadian, or U.S. carriers for that matter, including the ultra-low cost carriers,” he told CTV. “When you have the lowest costs, you can offer the lowest price point […] at a point well below their breakeven point. So even if they fill up 100 percent, they’ll be losing money.”
[Photo: Shutterstock]
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Has Mr. Godek ever seen the tax structure for airfares in Canada? Perhaps not. Maybe the base price will be a pair of jeans. But back in the days when JetsGo offered one way fares for $1 (and WestJet, doing something similar specifically doing it to prove a political point), the fare ended up being somewhere between $80 - $100+ dollars. Unless he has gotten the government to agree to give up charging taxes for his carrier, and I somehow highly doubt that, there is no getting around it. The taxes alone will be worth a few pair of jeans. The other issue, of which other airlines also failed because of, is the assumption that a mass of people are going to make their way out to Hamilton and Waterloo for these fares. These are small cities whch just do not have the demand for the kind of schedule you'd need to compete. Sure, the AIFs are cheaper, with savings that are passed on. If you're ok with a flight once a week to your destination, ok, maybe. Air Canada flies what, 6, 8, 10 flights a day from YYZ-YVR. Sure, you can skim a few of those people off and convicne them to drive to Hamilton for lower fares, especially from the Southern Ontario regions that are closer - Niagra, St. Catherines, Hamilton itself. Even with a subpar schedule. However, they just don't exist in the large numbers that are going to allow for a convenient schedule to attract enough people. Even the small airports in the US survive because of the ability to drive the traffic through the major hubs. But you don't have flights, from say, Grand Rapids, MI or Springfield, IL or Syracuse, NY to Mexico, Dominican Republic, etc, much less more than a handful of the biggest hubs that are relatively closeby. It just doesn't work. Yes, Canadians pay too much for air travel. BUt it sounds like its a recipe for another name in the graveyard of attempted Canadian air carriers, joining those like JetsGo, Canada 3000, Greyhound, Roots Air, etc.
Um, let's see... They're not getting their fuel, planes, landing fees, rent for counter space at the airport, spare parts, etc any cheaper than other airlines, so that basically leaves one area to cut costs: labor. From what i have read, labor averages 25 per cent of an airline's costs. Even if they can find people to work for half the going rate, in the long term they might be able to offer fares at say 12 per cent lower than the competition. Sorry, that's just not enough to get excited about.
It depends where Mr. Gadek buys his jeans... This, at Neiman Marcus, at $2775: http://www.neimanmarcus.com/prod200810123/p.prod or maybe a "bargain" at $1650: http://www.neimanmarcus.com/prod199910116/p.prod ? I doubt that he is talking about jeans at $19.99 from Kohls: https://www.kohls.com/product/prd-3009517/null.jsp