Discount airline offering flights as low as $89 out of B.C.

A NewLeaf Travel airplane is shown in this image from the company's website.

MONTREAL - A new airline in Canada is hoping to shake up travel next month by offering rock-bottom fares - but be prepared to pay for everything from carry-on luggage, on-board drinks and printed boarding passes.

NewLeaf Travel, which announced Wednesday it will fly between seven cities in the country starting Feb. 12, is unabashedly courting the budget traveller market. On its website, it says, “Your fare gets you the two essentials: a seat and a seatbelt. The rest is up to you.”

The company will initially fly two 156-seat Boeing 737 aircraft leased from Kelowna's Flair Airlines. It aims to have a fleet of 15 planes including larger models of the popular aircraft in three years if its plans to expand across Canada and into the United States, Mexico and the Caribbean are successful.

NewLeaf chief commercial officer Dean Dacko says Canadians have been forced to pay too much for air travel because of a lack of competition.

“There's a huge hole in the market today of Canadians that are just looking for a more cost-effective travel value for their travel dollar and we believe that we can fill that void,” he said in an interview.

Initial interest in the airline caused its online booking system to crash - an unfortunate but potentially positive omen, said Dacko.

“It's amazing that we've had that much interest that fast.”

The company is promoting one-way fares for as low as $89 including taxes. But passengers will face additional charges ranging from $25 to $150 for a variety of services, including checked-in and carry-on bags, seat selection and printed boarding passes.

The carrier will fly into Halifax, Hamilton, Regina, Saskatoon, the B.C. cities of Abbotsford and Kelowna, and Winnipeg, where the carrier is based.

About one-third of capacity will be available at the lowest fares with the cheapest fares available for flights between the B.C. and Saskatchewan cities, NewLeaf said.

Fares will be slightly higher for longer distances. The longest flights between Hamilton and Kelowna will start at $149. WestJet and Air Canada flights from Toronto's Pearson International Airport to Kelowna cost at least $340.

Airlines around the world, including large carriers like WestJet and Air Canada, have been moving to a similar so-called unbundled model.

Dacko said NewLeaf is going to be disruptive to Canada's two largest airlines, but has deliberately avoided going head-to-head by using secondary airports where costs are at least half of those at larger facilities. It also won't offer daily service.

WestJet, which said it has been Canada's low-fare leader since it got off the ground with three planes in 1996, said it will “vigorously defend this position in the market.”

“While a new entrant may selectively offer low fares in certain markets, we have the network, schedule and airline partners to provide our guests with so much more,” said spokeswoman Lauren Stewart.

Air Canada said it welcomes competition, adding it offers competitive pricing in all markets.

Robert Kokonis, president of airline consulting firm AirTrav Inc., said NewLeaf's launch is good news for passengers who avoid flying because of high costs.

“(NewLeaf) is pulling people really out of the cars, off the bus and stimulating travel from people who don't travel that often, so it's really good news, at least in the short run,” he said.

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