Cormark Analyst – Canada Jetlines “Could Prove a Profit Challenge to Incumbents”

Yesterday (September 11, 2017) was a busy and fruitful day for Canada Jetlines’ senior management and board of directors. The entire team assembled in Toronto and hosted its first news conference. Click here to view the news conference.

The team also met with investment advisors and Transportation Analysts, one of them being David Tyerman from Cormark Securities. He used the opportunity to feature Canada Jetlines in his team’s “Morning Meeting Notes.”

In the piece titled “Air Transport – Jetlines ULCC Announces Launch Program”, he makes the case that Canada Jetlines “could prove to be a profit challenge to incumbents.” Specifically using the United States’ Ultra Low Cost Carrier (ULCC) market as an example, “We are seeing this in the current U.S. airline price war, which was sparked by incumbent, United Continental, trying to fend off ULCC, Spirit. JET’s announcements may suggest future similar challenges in Canada.

Although, Canada Jetlines is just under a year from having planes in the air. Mr. Tyerman states, “We remain constructive on Air Canada (AC), WestJet (WJA) and Transat (TRZ) from a recommendation standpoint in the short term due to current positive market dynamics (reasonably rational competition) and the CAD tailwind and for AC, benefits from internalization of its loyalty program (probably in the 2022 timeframe). But longer term, risks are brewing from potential ULCC competition, WJA’s long-haul expansion, potential international long-haul ULCC competition and possibly from reduced competitiveness against international carriers.

Here is an excerpt from the Cormark report on how Canada Jetlines is positioning itself against West Jet, Air Canada and other Ultra Low Cost Carriers.

Yesterday’s news conference resulted in a number of media outlets featuring the company, below is a select list of articles including links.

September 11, 2017 – BNN
Canada Jetlines CEO outlines plan for summer 2018 ultra-low-cost carrier launch

September 11, 2017 – Financial Post
Canada Jetlines promises base fares below $100 out of Hamilton and Waterloo

September 11, 2017 – Global News
Canada Jetlines to offer low-cost flights from Hamilton and Waterloo

September 11, 2017 – CBC
‘A rebellion against high fares’: New low cost airline launching in Hamilton

September 11, 2017 – The Globe and Mail
Startup Canada Jetlines plans to offer base fares below $100, CEO says

September 11, 2017 – SKIES
Canada Jetlines launches low-fare ‘rebellion’