Canada Jet­lines get­ting for­eign cap­i­tal sup­port for launch

The Guardian (Charlottetown) - - BUSINESS/OBITUARIES - BY ROSS MAROWITS

Canada Jet­lines’ CEO says the fledg­ling air­line is look­ing for cap­i­tal out­side of Canada to help fund the June 1 launch of the ul­tra low-cost car­rier.

Stan Gadek told an in­vestor con­fer­ence Tues­day that it has re­ceived in­ter­est from sig­nif­i­cant undis­closed air­line in­vestors.

He says the ini­tial fo­cus is for­eign cap­i­tal be­cause there’s a lack of risk cap­i­tal in Canada while Europe and the United States have ex­pe­ri­ence with the low-cost busi­ness model.

The fed­eral gov­ern­ment has given the air­line an ex­emp­tion from for­eign own­er­ship rules that will al­low it to have 49 per cent for­eign own­er­ship with no sin­gle in­vestor hav­ing more than a 25 per cent stake.

Canada Jet­lines plans to start op­er­a­tions from Hamil­ton, Ont., and will add Ab­bots­ford, B.C. in 2019 and hopes to fly out of Mon­treal down the road.

It will ini­tially fly four Boe­ing 737s, adding four an­nu­ally to reach 24 planes by 2023.

Ganek says the air­line will of­fer the ab­so­lute low­est fare in the mar­ket­place, with an av­er­age be­low $100.

He crit­i­cized WestJet’s (TSX:WJA) claims that it can dou­ble rev­enues from fees for flight changes, can­cel­la­tions and checked bags.

Ganek says cus­tomers will make their de­ci­sion based on the fi­nal cost so air­lines can’t get car­ried away charg­ing an­cil­lary fees.

Ear­lier, WestJet CEO Gregg Saret­sky told the Sco­tia­bank trans­porta­tion and aero­space con­fer­ence that Canada hasn’t his­tor­i­cally sup­ported more than the equiv­a­lent of 2.5 air­lines.

He said the plans for three new star­tups, plus its Swoop and Air Canada Rouge brands will make for a crowded mar­ket.

Saret­sky added that the Calgary-based air­line won’t make Air Canada’s mis­takes in launch­ing Rouge in 2013 by en­sur­ing pas­sen­gers don’t get any nasty sur­prises.

Flights will be booked on a sep­a­rate web­site, check-in will be at a sep­a­rate Swoop air­port counter and the uni­forms will be a dif­fer­ent colour.

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