Winnipeg-based NewLeaf finally takes flight

NewLeaf'sinaugural flight was given a watery welcome as it arrived in Winnipeg on Monday.

After the travel company was earliergrounded by licensing problems, the aircraft's entrance"made history in Canada," itspresident said.

About 150 passengers boarded a Boeing 737-400 at John C. Munro Hamilton International Airportheaded for Winnipeg on the firstflight from thenew low-costair travel company.

"The journey to get here hasn't been without challenges, but today is proof that we are a dedicated group of individuals who are committed to providing Canadians with a good deal,"said Jim Young, president and CEO of NewLeaf Travel Company.

The next flight for the companyWinnipeg toKelowna was delayed an hour.

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Young said history was being made by the low-cost carrier while speaking at the WinnipegJames Armstrong Richardson International Airport for the company's official ribbon cutting.

"Thousands of people have purchased tickets across Canada. This exceeds our targets and we are thrilled," he said, adding the company has already sold out multiple flights.

Barry Rempel, president and CEO of Winnipeg Airports Authority, also referred to the numerous hurdles NewLeaf faced before taking flight.

"I believe there were probably days you weren't sure this was really going to happen it is, it has," he said.

The Winnipeg-based company hoped to begin operations in January, but the Canadian Transportation Agency was in the middle of conducting a review of the licensing requirements of indirect air service carriers like NewLeaf.

As a result of the delay, NewLeaf refunded all tickets sold and suspended operations until it could sort out the regulatory turbulence.

The issue arose because NewLeaf iscontracting flights through Kelowna-based Flair Air in an agreement called wet leasing, explained David Duval, with the faculty of business and economics at the University of Winnipeg.

"NewLeaf is entering into, as a travel company or a travel intermediary, entering into an agreement with Flair Airlines that will see Flair supply basically the aircraft and the crew and NewLeaf will endeavour to sell the seats," he said.

That's why CTA branded NewLeaf a reseller, which is a new classification in Canada.

NewLeaf doesn't need to hold the traditional airline licence because it's a travel intermediary, Duval explained.

"I think the idea is one that should be explored," he said, adding he thinks NewLeaf has its timing and route network reasonably correct.

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In June, the Federal Court of Appeal agreed to hear an appeal by an air passenger rights advocate regarding whether the CTA has the authority to permit NewLeaf to operate without a licence.

The court likely won't hear the appeal until at least the fall, but on Thursday, the advocate, Gabor Lukacs, filed an injunction motion asking the court to require NewLeaf to put up $3.7 million in financial security.

"We have all the necessary protections in place for the customer; this includes protecting the customers, the fund that they have paid that we hold prior to completing the flights," Young said.

Earlier this month, some consultantstold CBC News they're owed thousands in fees.

South Beach Capital Partners, made up ofseven Manitoba First Nations,are financial partners withNewLeaf.

"We became involvedbecausewe believe in businessdiversification and see this as an excellent investment," saidBrokenhead Ojibway Nation ChiefJim Bear at Monday's ribbon cutting.

"We know there is a real appetite in Canada forlow-costairtravel."

The costs are kept low by adding fees to baggage, especially if it is not checked in online from home. NewLeaf charges for carry-on bags anywhere from $31.50 to a whopping $92at the gate. NewLeaf passengers also have to pay for checked luggage from $26.25 online to as high as $80.50 at the gate.

The airline will face other challenges, including matching itsproduct with consumer expectations and adapting to changes, Duval said, but the company has "as good a chance as anybody."

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