Canadian ULCCs: Indigo Partners to enter a crowded market

The field of new ULCCs in Canada has officially widened now that Enerjet plans to launch in 2H2019. The company has always been the quietest among ultra low cost hopefuls in the country but now, with a new group of investors that includes Indigo Partners, Enerjet is exuding a high level of confidence about its prospects in the Canadian market.

Backing from the ULCC specialist Indigo occurs at an interesting time. In the past Indigo has evaluated opportunities in the Canadian market, including an investment in Enerjet, but has opted not to enter Canada's ULCC fray until now.

Enerjet's market entry will likely have little impact in 2019 but with the company's planned debut, all three ULCCs that have been trying to get airborne for years will finally realise their ambitions. Those airlines are joining WestJet's new ULCC Swoop, which plans to have a fleet of 10 Boeing 737s by YE2019. However, experiences elsewhere suggest Canada's market is unlikely to support four ultra low cost airlines, in the longer run.

But the benefits to consumers, airports and the economy will in the meantime justify the disruption.