Canadian upstart NewLeaf will relaunch following two and a half months of uncertainty surrounding the requirements for a license. Initially launched as an ultra-low cost carrier to bring competition to the Canadian market, NewLeaf is now a reseller. As they are not flying themselves – they are merely buying seats and selling them to the public – a license is not required.
The ‘no frills’ service offers customers considerably lower prices as they are paying for a seat and a seat belt. The choice to add on extras is at the customer’s discretion. Tickets will be sold on flights to Kelowna, Hamilton, Abbotsford, Halifax, Regina, Saskatoon and Winnipeg.
The issue surrounding NewLeaf and their potential need for a license has caused much debate. Air Canada, the largest airline in the country, said: “Air Canada believes that the person having commercial control and selling the air service should hold a license and comply with the usual requirements with which ‘airlines’ are expected to comply.”
There appears to be confusion around the use of language when it comes to the travel company. In the ruling, it is stated that the Canadian Transportation Agency “will consider whether the person promotes themselves as an air carrier, including providing images of aircraft with their livery and using business name(s) and words/phrases that create the impression that they are an air carrier.”
It could be argued that the fact NewLeaf are called a travel company – their social media accounts include the word 'travel' – it could be interpreted that they are the carrier. The carrier will instead be Flair Airlines, a charter airline based in British Colombia, Canada.
In January, when NewLeaf launched their website promoted their impending services and included aircraft images painted in their livery. It is believed the aircraft that will be used on upcoming flights will use NewLeaf livery, but this again could make it appear as though they are the operator as opposed to Flair, as the ruling stated that “the use of similar images in the would suggest that NewLeaf would be holding itself out as an air carrier operating an air service.”
The agency also noted the importance of clarity for the customers, saying “the public should be clearly informed about whether they are contracting and dealing with the operator of the air service so that they can assess any risk and make informed decisions.”
Of the ruling, CEO of NewLeaf, Jim Young said: “The introduction of the distinctive term ‘reseller’ in airline regulation not only clarifies the role of NewLeaf in the travel marketplace, but it also allows for innovation and consumer choice while maintaining consumer protections.”
The introduction of the National Transportation Act 1987 ushered in deregulation of the aviation industry. Deregulation in Canada removed the distinction between non-scheduled and scheduled for domestic air services, which allowed air carriers to distribute their capacity with a single domestic licence, but no legislative provisions were introduced to require resellers to hold a licence.
Despite the early hiccup in regards to legislation, NewLeaf believe they will resume booking in the near future. Young said: “This is a victory for Canadian travellers. We are determined to bring low-cost air travel pricing to the Canadian marketplace... Our goal was always to make sure we had a good firm footing for the summer season, and I think we’re going to be there.”