National Post (National Edition)
Flair Airlines turns over NewLeaf with merger
Flair Airlines Ltd. has purchased the assets of airline seat reseller NewLeaf, a move the B.C. charter airline hopes will attract new investors as it aims to expand its commercial operations.
NewLeaf, which is not an airline but a reseller of seats, had partnered with Flair to provide its aircraft and crews when it launched last summer.
The travel company had approached Flair about three months ago regarding a potential purchase, said Flair’s vice-president of commercial operations Chris LaPointe on Wednesday, with NewLeaf indicating that operations would work better under one roof.
A deal was finalized this week which will see Flair take over NewLeaf’s marketing, selling and distribution, which LaPointe says will essentially function as the airline’s commercial division.
“The way it was structured was as two separate companies; one was a marketing arm and one was the airline. I think the message wasn’t clear enough and people had difficulty getting their heads around it,” LaPointe said, adding people the company spoke with were more open to investing in an airline, as opposed to a travel company.
“I think it’s a different profile, it takes on a different complexion and it is a lot more interesting for investors.”
LaPointe said Flair plans on expanding its operations to new destinations, including a southern location, and will announce a new fall and winter schedule within the next few weeks. About 85 per cent of the NewLeaf staff will join Flair’s operations. In the meantime, the company says service will not change for existing NewLeaf customers.
“This acquisition will build on the strength of both companies and now we are truly committed to providing the lowest possible fares as Canada’s newest national airline,” said Flair Airlines chief executive Jim Rogers.
When NewLeaf launched in July, 2016, it positioned itself as an ultra-low-cost option that would undercut Air Canada and WestJet on price.
Six months after it launched, NewLeaf dropped several cities from its schedule, including Victoria, Kamloops, Fort St. John, Kelowna, Moncton, Saskatoon and Regina. It had ambitions to fly to Phoenix and Orlando but ditched those efforts, blaming WestJet for squeezing them out of the market.
The Consumers’ Association of Canada has a travel alert warning people of “arbitrary cancellations and alterations to flight dates and times on thousands of tickets” from NewLeaf.
“Buyers of NewLeaf tickets should be asking themselves the question ‘does the saving of buying cheap tickets warrant the risk of being stranded?’” the alert says.
LaPointe said by removing NewLeaf as an intermediary, it should clear up any potential confusion as to who is accountable to the passenger. “We’ve always had the responsibility and knew we had it, both contractually and morally,” he said. “This removes that question mark.”
Several airlines are racing to launch their own ultralow-cost carrier in Canada, including WestJet and Canada Jetlines Ltd.
Jetlines executive chairman Mark Morabito said Flair’s new acquisition was about saving NewLeaf’s “failing” operations and that he doesn’t view the company as competition. “At the end of the day, it doesn’t impact what we’re doing,” he said.