Takin’ a stroll down memory lane! It’s been 365 days since we sold our very first seat and we have countless more to look forward to. Here’s a swoop back over the past year … #FlySwoop pic.twitter.com/8WEDdZqlzM— FlySwoop (@FlySwoop) February 1, 2019
One year ago today, Westjet ultra low-cost subsidiary Swoop sold its first seat, on a flight between Hamilton and Abbotsford, British Columbia. From that humble beginning, the airline now boasts six 737-800 aircraft, four more on the way, and more than 300 employees.
Up the road in Edmonton, rival carrier Flair has also been busy spooling up, doubling the size of its fleet, adding staff, and expanding its list of destinations.
While their strategies vary somewhat, both airlines boast that the cities they serve enjoy lower airfares and more passengers, offering a base fare for bare-bones air travel, and then charging for every service and add-on after that.
But residents of large parts of the country wonder when they’ll be invited to the party.
Cities big – think Ottawa and Montreal – and small – Regina, Saskatoon, Quebec City and St. John’s for example – have not been included, leaving residents to wonder when they’ll be offered the promised benefits. Social media are full of residents begging the ULCCs to serve their cities.
“I have actually talked with the ULCCs,” said James Bogusz, President and Chief Executive Officer of Regina International Airport. “the short answer is a lot of airlines, as they should, have more opportunities than aircraft.”
In its summer plans, Swoop will offer service to seven Canadian destinations, from Halifax in the east, to Abbotsford in the west. Though it has yet to release its full summer schedule, Flair has already revealed it will resume service to Halifax and Victoria for the peak summer season.
Even yet-to-be launched ULCC Canada Jetlines recently added Kelowna and Winnipeg to the roster, and both cities are already served by its ULCC competitors. Where Jetlines does go out on a limb is planned service to Red Deer and Lethbridge, Alberta.
“The addition of these airports will extend our reach,” said Jetlines CEO Javier Suarez in a statement, “giving Jetlines future access to more large populations and strong markets.”
Still, no mention anywhere of Saskatchewan, the nation’s capital, or Quebec.
“(The ultra low-cost carrier) business model is really about taking existing routes and looking to find high-traffic routes and create a great price point for passengers,” said Bogusz. “Typically, airlines are always going to look for what they perceive as a high-yield, low-risk opportunity wherever possible. And it’s not to suggest that Saskatchewan isn’t something they’re going to look at more seriously, but they’re typically going to pluck what they see as the most obvious fruit.”
In Regina’s case, that strategy would mean competing with Air Canada and Westjet on flights to Calgary, a risky proposition given that both airlines maintain a hub in Alberta’s largest city.
Ultra low-cost carriers say their low fares entice more people to fly who might otherwise have driven or crossed the border to fly from points in the United States. Though it’s still early, data suggest there is some truth to the argument.
While many factors influence air fares, in its quarterly review of 10 Canadian markets, Statistics Canada showed that from the spring 2017 to 2018, average domestic fares across Canada fell 3.9%. What was telling was that Edmonton, where the ULCCs have been waging a pitched battle, had the lowest average fares in the country, taking the title away from Saskatoon.
In only two of the 10 cities did prices rise. That was in Montreal and Ottawa, and neither has service from a ULCC.
“At the moment we’re really focused on big population hubs,” said Swoop airlines President and CEO Steven Greenway, “that’s where we need to go first, stabilize the business.
“There’s obviously a market in terms of cheap fares transcontinental, in terms of getting people east to west, west to east.” But in Saskatchewan, “everyone keeps on saying ‘we can see your planes flying over us, but that’s basically it.'”
And there are no plans to add smaller cities in the near future, though London, Ontario will soon have Swoop flights to Edmonton, Abbotsford and Halifax.
“What we would like to do is to think we could offer the whole of Southern Ontario cheap fares and that’s the reason we’re going into London as well,” said Greenway. “If it works out of Hamilton, why shouldn’t it work out of London?”
The rest will have to wait at least until Swoop can add more aircraft. Another 737-800NG will join the fleet in Edmonton in May, and three more will be added in late-2019. Only then will the airline look at expanding to Canadian destinations beyond the ones already served.
In the end, it all comes down to the consumer. Will the ultra low-cost carriers offer airfares cheap enough to entice new travellers, or encourage them to switch their mode of transportation?
“This is a new market for Canada,” said Reginal International’s Bogusz. “So the real question is, does the Canadian consumer have a high demand for this or not, and the next couple of years will be very telling.”
Great story. Very informative. I’ll be crossing my fingers that canadians do use the ULCCs and that they pull some passengers out of the US airports. It did seem odd that the Swoop president said large centers were the priority yet is not focused on some of the largest cities in the country. Well let’s see if that changes. Nice to see halifax and London get some attention so far.
Thanks for your comment. Agreed, and I find it unusual that the other ULCCs seem to be following exactly the same pattern. It’s almost like they’re building stores right across the street from each other, rather than finding their own patch.