Canada Jetlines sees an opportunity from other airlines diving to the middle

Canadian start-up carrier Canada Jetlines believes a "dive to the middle" by the country's two largest carriers Air Canada and WestJet has created an opportunity for the pure-play ultra low-cost business model to manifest itself in Canada as fares continue to climb.

The new carrier's thesis is it can stimulate traffic by offering lower fares to passengers that would otherwise travel by car and adopt the ultra low-cost carrier strategy of extreme unbundling - charging for nearly every aspect of travel outside of a seat. It is a strategy that has worked for Spirit Airlines in the larger US market.

It is not a certainty the ULCC model can be easily replicated in Canada; but if Canada Jetlines does ultimately become airborne perhaps the carrier to feel most of the heat is WestJet, an airline that is moving up market, but still has significant dependence on cost-conscious leisure travellers.