The launch of WestJet's planned ultra low-cost subsidiary could slip to the first quarter of 2018, as it works through the regulatory and labour approvals process.

The Calgary-based carrier outlined a late-2017 launch for the new ULCC when it announced the plan in April. However, today chief executive Gregg Saretsky says that launch could occur in late 2017 or early 2018, citing all of the approvals needed for the new subsidiary.

Those approvals include securing an air operator's certificate from Canadian regulators for the new airline, which it has yet to name, as well as reach agreements with its labour groups and other approvals ahead of launch, he says on the sidelines of the IATA annual general meeting in Cancun.

The ULCC will operate independently of WestJet with an initial fleet of 10 Boeing 737-800s transitioned from its parent's fleet. The plan calls for an unbundled offering that takes after the business model of ULCC's in the USA and elsewhere in the world.

"Launching a ULCC will broaden WestJet's growth opportunities and open new market segments by offering more choice to those Canadians looking for lower fares," said Clive Beddoe, chair of the WestJet board, in April.

The new ULCC will also allow WestJet to counter Air Canada's own dive into the market segment with Rouge, which the mainline carrier launched in 2013.

Calin Rovinescu, chief executive of Air Canada, is unconcerned with WestJet's plans in an interview at the meeting. Rouge, he says, is a "competitive tool" to allow them to compete for leisure passengers in both international and domestic markets.

WestJet has yet to disclose routes and other details for its new ULCC, which Saretsky says will be released soon.

Source: Cirium Dashboard