Swoop looking to partner with airports willing to offer incentives, guarantees and waivers in return for service
Desperate to get people flying again, Canadian ultra low-cost carrier Swoop is turning to airports to share the cost of restarting airline service. Swoop is taking the unusual step of asking airports to pitch the airline for new service to help speed recovery from the global pandemic – so long as the airport can come up with the cash to make it happen.
“We believe the key to recovery lies in strategic collaboration, creativity and innovation to get travellers moving back through airports and into the skies,” said Charles Duncan, President, Swoop. “We are encouraged by early signs of recovering demand for ultra-low fares and are eager to collaborate with airports across the region to re-think how we, as an industry, approach affordable and accessible air travel.”
Swoop is offering a pared-down schedule this summer, serving its key markets of Halifax, Hamilton, Edmonton, and Abbotsford, British Columbia. Service to dozens of destinations in Canada, the United States, and Mexico was suspended as a result of COVID-19.
The airline has launched an on-line request for proposals, hoping to attract airports in Canada, the United States, Central America, and the Caribbean as service slowly recovers from the pandemic.
Swoop said it wants to work with airports “that understand providing value to travellers through fair fares, and low fees creates demand as well as the importance of travel and tourism in stimulating economic recovery.
“The airline is looking for strategic partners that share an entrepreneurial, consumer-driven mindset to work together on boosting air travel recovery while continuing to provide access to affordable airfares,” reads Swoop’s initial posting. “Swoop will be looking for innovative proposals with financial (and tax) incentives, revenue guarantees, fee waivers, marketing support and ways of bringing additional economic activity to local communities.”
The RFP is a rare glimpse inside the murky world of airport incentives.
Airlines wanting incentives from airports is not new, though it is rarely publicly seen in the ultra low-cost sector in North America. More often, airports use financial incentives to attract international service. Regina International, for example, has received millions in tax breaks from the city in the hopes of attracting non-stop service to a U.S. hub.
Toronto offers incentives to both Air Canada and Westjet if they exceed passenger targets at Canada’s largest hub airport.
“Having welcomed 2.5 million travellers on board in our first two years of operation, our unbundled airfare model has proven successful here in Canada, said Duncan in a statement. “This demonstrated demand for ultra-low fares translates to increased passenger traffic in airports, and the significant spillover effect through the support of jobs and businesses in local economies, all of which are essential for economic recovery,” stated Duncan.
Swoop flew its first flight June 20, 2019 with a fleet of 189-seat Boeing 737-800 NG aircraft formerly flown by parent company Westjet.
The airline is in a pitched battle with Flair in the ultra low-cost sector where passengers pay for a seat, but must pay additional fees for every additional service, such as a printed boarding pass. Both airlines cancelled their expansion plans this summer as a result of the pandemic.
Airports saw their traffic dropped around 97% during the depths of the pandemic. For example Ottawa, which does not have ULCC service, said its traffic was just 8,921 people in May, compared to 440,466 in 2019. In Canada, airports earn their revenues from passengers and the fees they generate.
In 2019, airports generated about $4 billion in revenues, according to data compiled by Western Aviation News. The Canadian Airports Council expects revenues to drop more than $2 billion as a result of the pandemic.
As a private company, Swoop does not report its financial results or passenger data. The airline said it has helped create 1,800 jobs since its inception, with an economic impact of $295 million.
Swoop has given airports until July 3 to submit proposals. Successful applicants will be announced by the end of the year.