Advocate raises licensing concerns with new Canadian air travel company
Josh Crabb, CTV Winnipeg
Published Thursday, January 14, 2016 5:08PM CST
Last Updated Friday, January 15, 2016 12:03PM CST
An air passenger advocate is raising licensing concerns with Canada's new ultra-low-cost air travel company, NewLeaf.
“People should be alarmed that it's an unlicensed company," said Halifax-based passenger advocate Gábor Lukács. “The risk here is financial, primarily for passengers.”
Recently-launched NewLeaf is partnering with Flair Airlines, based in Kelowna, BC, to offer cheap flights out of seven smaller airports in five provinces, including Winnipeg.
The self-declared air travel company, based in Winnipeg, currently does not have its own operating license from the Canadian Transportation Agency, the company told CTV News.
NewLeaf president and CEO Jim Young said the company does not need a licence because its operating partner, Flair Airlines, already has a license from the CTA.
Flair aircrafts and staff will be used for NewLeaf flights.
“All the same terms and conditions and contracts of carriage exist with Flair as they would exist with NewLeaf,” said Young. “We’re selling seats on Flair Airlines as a result of the NewLeaf brand, so customers should have no concerns at all.”
While Lukács supports more competition in the aviation industry, he said booking with NewLeaf could come with financial risks.
He said the licensing arrangement between NewLeaf and Flair could leave passengers in financial limbo if baggage gets damaged or lost during a flight sold through NewLeaf, or if the company cancels or delays a flight.
“It’s a question of who has commercial control, who sets the schedules, who decides what the terms and conditions are and there are some very practical problems with what we see here, which are quite obvious,” he said.
One of the problems stems from confusion around baggage liability within NewLeaf’s General Conditions of Carriage, said Lukács.
“They have two separate statements about baggage and liability. One says $750, the other says $1,500. Then go to the bottom of the page and lookup Flair Airlines terms and conditions; they say $250,”said Lukács. “Now which of them is going to apply, whichever is best for the airline?”
Flair Airlines vice-president of commercial operations, Chris Lapointe, told CTV News his company is currently working with lawyers and the Canadian Transportation Agency to review Flair’s tariff document, including baggage liabilities.
Lapointe said once the NewLeaf service begins, Flair’s tariff document will be applied.
Before the airline's agreement with NewLeaf, Flair only operated as a charter service. Lapointe said this new partnership, which he described as “new territory,” means his company will have to make some changes.
Changes that might result in some adjustments for baggage liability amounts, he said.
NewLeaf said once the service beings operating, consumers have nothing to worry about and that they will be treated as if they were flying with any other commercial airline.
“The tariff documents and the agreements between Flair and NewLeaf will reflect that protection for the customers,” said Young. “You’ve got the same assurances with us that would with any other airline that you fly in Canada.”
Flying while under review
The CTA is currently conducting a review of licensing requirements for certain air travel companies, including public consultations, which could have implications for companies such as NewLeaf.
“Whether organizations like ourselves should be regulated by the CTA, and we’re participating in that consultation review,” said Young. “But at this time, they told us that we’re clear to takeoff.”
Jack Branswell with the CTA confirmed NewLeaf is not required to have its own license during the review.
“While this review is underway, the agency will not require companies such as NewLeaf, who bulk purchase all seats on planes and then resell those seats to the public, to apply for a license,” Branswell wrote in email to CTV News.
“The agency will continue to carefully monitor this issue. Should NewLeaf's business model evolve into that of an air carrier, the agency will require NewLeaf to hold the appropriate license.”
NewLeaf Travel is promising non-stop trips beginning on Feb. 12, with flights running out of airports in Nova Scotia, Ontario, B.C., Saskatchewan and Manitoba. Flights will cost between $89 and $149, which includes all airline fees and additional taxes.
NewLeaf’s first flight out of Winnipeg takes off on Jan. 13.
So far, the company said ticket sales have been "strong," adding it appears Canadians are responding positively to lower fares.
A NewLeaf Travel airplane is shown in this image from the company's website.
Jim Young, president and CEO of New Leaf Travel Company, addresses media at James Richardson International Airport on Jan. 6, 2016.