Canada Jetlines applies to start domestic operations

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A start-up called Canada Jetlines has filed an application with the Canadian Transportation Agency to operate domestic flights.

If approved, the license would permit the airline to operate aircraft with more than 89 seats on a scheduled or non-scheduled basis, the agency tells Flightglobal. The application is under review.

Canada’s Financial Post reports that Jetlines would be an ultra-low cost carrier planning to launch in the second half of 2014 with two Airbus A319 aircraft. The airline reportedly plans to start service to underserved locations in Western Canada and eventually expand internationally to leisure destinations.

An ultra-low cost carrier entering the region would go up against WestJet and Air Canada’s domestic narrowbody operations at larger cities like Edmonton and Vancouver. These carriers have also ramped up competition to serve smaller cities in Western Canada as low-cost carrier WestJet expands its new Calgary-based regional airline, Encore.

Since launching in June, Encore has sought to bring down average fares as it competes against incumbent Air Canada in those smaller markets. However, these reductions were limited by competitive pricing actions during Encore's first three months of operation, said Bob Cummings, WestJet’s vice-president sales, marketing and guest experience during a November conference.

Ahead of Encore launching Bombardier Dash 8 Q400 turboprop routes in the region, Air Canada initiated its own service with the aircraft type to boost regional service in the provinces of British Columbia, Alberta and the Northwest Territories.

WestJet says Encore reduced fares in some Western markets by as much as 20% to 30% in the third quarter, which is on the lower end of the 30% to 50% in planned fare reductions that the carrier outlined in May.