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WestJet Swoops in as Canada's incumbent airlines work to create stiff competition for ULCC hopefuls

Analysis

Aspiring ULCCs in Canada have endured a lot of flux during 2017, with New Leaf being absorbed by Flair Airlines, WestJet tabling plans to establish its own ULCC (dubbed 'Swoop'), and Canada Jetlines outlining a timeline for its debut.

Now, Air Canada is signalling that it will compete with discounters as it seeks to expand its low cost unit rouge into domestic markets.

An important passenger segment for both WestJet and Canada Jetlines are customers that drive across Canada's border to the US. It is an attractive passenger segment, but offering fares low enough for passengers to skip border crossing is key, which means cost efficiency is paramount for those airlines.

With the latest shake out in Canada's ULCC space, 2018 is proving to be a strategic year as both WestJet's Swoop and Jetlines are set to debut. Jetlines is entering the market at a time when large North American airlines are working to compete fiercely with ULCCs in order to maintain their dominance.

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