The unveiling of routes set for debut in Feb-2016 by Canada’s NewLeaf Travel generated significant buzz about a long awaited ULCC revolution in Canada. But the reality is New Leaf’s approach is more evolutionary, and any market disruption it may trigger will take some time to reach fruition.
NewLeaf represents a small fraction of Canada’s domestic capacity in 2016. Air Canada and WestJet will no doubt watch how the market responds to NewLeaf’s no-frills model closely, but their competitive response will be measured. The upstart has taken great pains to avoid direct competition with the Canadian titans, opting to base itself from secondary airports with low frequency service.
NewLeaf’s success hinges on many factors, but one crucial part of its execution is educating passengers about its business model. The largest North American ULCC, Spirit Airlines, was late in launching a campaign to ensure that passengers understood its offering, and it still generates the highest level of customer distaste among major US airlines.
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