Canada's Enerjet further postpones plans for leisure flights

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Canadian start-up Enerjet has indefinitely deferred plans to launch leisure flights and will focus exclusively on workforce transportation.

The Calgary-based carrier launched services in December with domestic charter flights for Suncor Energy and Sands. Enerjet had been planning to start in the third quarter of this year public charters connecting smaller Canadian cities with international leisure destinations but CFO Alan Mann says this operation has been put on the backburner entirely.

"It's not a priority right now," Mann tells ATI. "It's not something we want to explore at the moment."

He says despite the collapse last year of Zoom Airlines the Canadian leisure market is still highly competitive with several leisure carriers remaining. He adds low-cost carrier WestJet is also "very aggressive" at expanding its network of leisure destinations in Mexico and the Caribbean.

Mann says the workforce transportation market is more lucrative and less competitive. He says Enerjet now competes mainly against Canadian North which operates ageing 737-200s while Enerjet operates a pair of ex-AirTran Airways 737-700s equipped with satelitte radio.

"We found our niche," Mann says. "We'll focus on the workforce market."

Enerjet now mainly operates charters for Calgary-based Suncor Energy and Sands, which late last year awarded the carrier a multi-year contract to shuttle its workers to oil sand development sites in remote parts of northern Canada. Mann says Enerjet now mainly shuttle workers from Alberta's two main cities, Calgary and Edmonton, to a 10,000-person "camp" in northern Alberta.

He says Suncor has built its own airport, ramp and terminal at the camp, which is about 50 miles north of the town of Fort McMurray. While flights now only link the camp with Calgary and Edmonton he says as the site grows and the "Alberta labour market dries up" Enerjet will start flying in workers from cities in other Canadian provinces.

He says most of the workers Enerjet is now flying are construction employees as Suncor expands its operations near Fort McMurray.

Mann says January and February were busy months for the Suncor operation but he acknowledges March through June were slower due to the economic downturn. However, he adds "it is now starting to pick up again".

He says on weekends Enerjet has been using its 737-700s to fly for Air Transat on routes to the Caribbean and Mexico. Air Transat is a Canadian tour company with its own fleet of widebodies operating over the transatlantic but it uses other carriers for medium-haul routes to the Caribbean and Mexico. While Enerjet now has no plans to operate its own leisure flights it is open to chartering out its aircraft to other leisure operators on weekends as Suncor only requires aircraft during the week.

Mann says for now Enerjet is not in the market for more 737s and expansion of its fleet will be "demand dependent". He says depending on demand Enerjet may consider the larger 737-800 and -900 variants.

"We're going to grow one plane at a time just like WestJet," Mann says.

Originally called New Air and Tours, Enerjet was first established in 2007 by a team of former WestJet executives. It initially planned to launch as a low-cost leisure carrier serving small Canadian markets and following a model pioneered by Las Vegas-based Allegiant.

But late last year, shortly before taking delivery of its first aircraft and securing an operating certificate from Canadian authorities, Enerjet dropped its original business plan for workforce charters. At the time it said it would expand into leisure flights in the third quarter of 2009. But Mann now says leisure flights will not happen in 2009 and "our focus now is workforce transportation".