runours of a new western Canadian airline

[Henry Tenby]

Rumours abound that WestJet founder and now former employee is starting some kind of new western Canadian based charter airline that will target smaller western Canadian markets with package holiday deals perhaps using smaller aircraft and/or 737NGs.

On the surface it seems like it might be a good idea. But trying to sell dedicated tours from small markets definately has its challenges.

[King F. Hui]

WestCan of Edmonton??

[Henry Tenby]

The name of this airline is not known as they are keeping it a secret. But the main fellow behind the venture is Tim Morgan who was one of the founders of WestJet.

[King F. Hui]

Former WestJet bosses hatch NewAir

BRENT JANG

From Monday's Globe and Mail

October 22, 2007 at 2:20 AM EDT

Four former WestJet Airlines Ltd. [WJA-T]executives, led by co-founder Tim Morgan, are drawing up plans to launch a new Canadian carrier.

The fledgling venture's first round of private financing has been oversubscribed, and the second phase is now under way, industry sources say.

Using the name NewAir & Tours, the business model is still being fleshed out, but the goal is to fly travellers in smaller cities to larger centres and U.S. holiday destinations.

NewAir's 55-page proposal is modelled after Allegiant Travel Co., a Las Vegas-based firm that runs a vacation division and low-cost airline with a fleet of 32 McDonnell Douglas MD-80 planes flying scheduled and charter service.

The four NewAir organizers have a proven track record at WestJet, and hope to repeat the tale of success from humble beginnings. WestJet will be sensitive to the upstart's potential impact, even though NewAir wants to emphasize charters and avoid direct attacks on scheduled service, an industry insider said.

Calgary-based NewAir believes it will carve a niche by pursuing routes either neglected or underserved by WestJet and Air Canada.

Mr. Morgan, former WestJet executive vice-president of operations, is spearheading the plan with William Lamberton, former vice-president of marketing. They are being supported by Gareth Davies, former vice-president of technical services, and Alan Mann, a former WestJet accounting executive.

Mr. Morgan and Mr. Lamberton declined to comment on their NewAir proposal. Mr. Davies and Mr. Mann couldn't be reached for comment.

“They're trying to fly under the radar and avoid head-to-head competition against WestJet and Air Canada,” one industry insider said.

Calgary-based WestJet, launched in 1996 with just three planes serving five cities, has grown to a fleet of 68 Boeing 737s in a network of more than 40 destinations.

Sources say NewAir's offerings could include charter flights with a seasonal schedule. For instance, there may be weekly non-stop service from Fort McMurray, Alta., to Vancouver for part of the summer, and that could switch to Fort McMurray to Reno, Nev., in the winter. Consumers could choose to bundle flights with hotel rooms and, in some cases, tour packages.

Others have tried and failed to make a go of it this decade in battling WestJet and Air Canada: Canada 3000 and Roots Air shut down in 2001, Jetsgo Corp. closed operations in 2005, CanJet Airlines halted scheduled flights in 2006 and Harmony Airways wound down earlier this year.

Mr. Morgan, who resigned from WestJet in 2005, co-founded the carrier with Clive Beddoe, Donald Bell and Mark Hill. Mr. Beddoe, WestJet's executive chairman, became the lone co-founder left at the airline after Mr. Bell departed this past July as executive vice-president of corporate culture. Mr. Hill resigned in 2004 as vice-president of strategic planning.

Planes under consideration by NewAir include Boeing 737s (700 and 800 series) and McDonnell Douglas MD-80s, sources say. Depending on how the concept unfolds, service could start in the spring of 2008. But NewAir is seeking to be nimble and flexible, so the launch could be late next year, if more time is needed to nail down tour packages. Seed money for the venture could vary from $70-million to $100-million, all from private placements with investors.

“It's premature to say how much money needs to be raised. No destinations, no planes and no departure points have been determined yet,” said an aviation official familiar with NewAir. “The business model is fluid and moving. It's in a state of flux.”

Consumers in smaller centres across Canada complain that they have to increasingly travel to major airport hubs on connecting flights before getting to their final destination. So, NewAir has an opportunity to meet pent-up demand for non-stop leisure charter service from point to point, another official said.

Mr. Lamberton already runs Classic Canadian Tours, packaging December trips for consumers in markets such as Brandon, Man., Kamloops, B.C., and Terrace, B.C., who want to visit friends and family in Calgary and Edmonton. Classic Canadian also flies from Calgary and Edmonton to Klondike escapes in Whitehorse and has trips to see polar bears in Churchill, Man.

While NewAir would likely initially focus on Western Canada, the venture could easily expand into Central Canada.

Porter Airlines Inc., which celebrates its first anniversary tomorrow, currently flies from its base at Toronto's island airport to Montreal, Ottawa and Halifax. Porter hopes to expand within four years to smaller Ontario sites such as Sault Ste. Marie and Sudbury – two cities that would also fit NewAir's target market.