NewLeaf to resume selling cheap airline tickets after CTA ruling
Published Wednesday, March 30, 2016 2:26PM EDT
Air-ticket reseller NewLeaf Travel has a new lease on life, thanks to a ruling by a federal regulator that will allow the fledgling company to resume selling seats on Canadian flights.
NewLeaf is expected to begin selling tickets in the next few weeks, after it rejigs its public image so that it does not present itself to the public as an air carrier.
The Canadian Transportation Agency ruled on Tuesday that airline ticket resellers like NewLeaf do not need an air licence to operate, so long as they don't advertise themselves to the public as an "air carrier operating an air service." The CTA also ruled that NewLeaf Travel fits the definition of a "reseller," based on the company's proposed business model.
NewLeaf operates its business by purchasing and then reselling all the seats on aircraft owned by its partner company, Flair Airlines. Flair, which operates a fleet of Boeing 737-400s, is licensed under the CTA.
Under the clarified CTA rules, lost luggage or flight complaints would be subject to Flair's terms and conditions.
NewLeaf CEO Jim Young said the decision is a chance to "make a second good impression" through a public relaunch of the company.
The company initially presented itself as an "ultra low cost carrier" when it launched in early January, prompting critics to challenge it under the CTA rules. NewLeaf suspended operations in mid-January, while it waited for the CTA to clarify its rules around licensing. NewLeaf was also forced to refund more than 4,000 air fares it sold in the week it operated.
NewLeaf has advertised low-cost, one-way fares as low as $89, with all taxes and fees included. Extra charges apply for food, drinks and checked luggage. The company has said it will sell tickets on flights to airports in Kelowna, Hamilton, Abbotsford, Halifax, Regina, Saskatoon and Winnipeg.
The CTA decision will allow NewLeaf to begin selling low-cost airline tickets for flights to seven different cities in Canada, at prices as low as $89.
Young said the company remains committed to offering more "competition and choice" in the Canadian market. "We look at this for the long haul," he said. "We're going to be here for a long time. A two-month delay isn't unheard of in the airline industry when people are trying to get something like this started. Our goal was always to make sure we had a good firm footing for the summer season, and I think we're going to be there."
In a Facebook post, NewLeaf applauded the CTA "on their rapid review process and determination." The company also said in a response on Facebook that it will be taking time to adhere to the CTA's regulations before it begins booking flights again.
"This shows that Canada wants this type of low-cost option, and we are excited for the results of the review and our future," the post said.
With files from The Canadian Press