Travel News Today

Tim Morgan, a former WestJet Airlines Ltd. executive, has chosen Boeing 737 Next Generation planes for his fledgling company, opting for the same aircraft model flown by WestJet.

"Boeing 737 NGs are good planes. WestJet loves them and we love them," Mr. Morgan said in an interview yesterday.

The selection is a sharp upgrade from his original plans to acquire older McDonnell Douglas MD-80s for Calgary-based NewAir & Tours Group. With oil prices about $115 (U.S.) a barrel, the cheaper but gas-guzzling MD-80s didn't make sense for the startup firm, which expects to open for business by late November, said Mr. Morgan, NewAir's chief executive officer.

Leasing rates for Boeing 737 NGs have fallen in recent months as carriers around the world cancel routes and ground planes to help combat high fuel bills, he said. Mr. Morgan is a WestJet co-founder who was instrumental in the Calgary-based airline's decision to use Boeing 737-200s when it launched in 1996, and he helped oversee the transition to new Boeing 737 NGs before he resigned in 2005.

WestJet currently has a fleet of 76 Boeing 737 NGs in the 600, 700 and 800 series. For its first leasing order, NewAir has lined up a Boeing 737-700 NG, seating about 135 people. The tour and charter operation expects to lease another five Boeing 737 NGs by late 2009.

MD-80s once appeared to be the best bet because of their lower lease payments, but oil prices have nearly doubled since early 2007, when Mr. Morgan and three other former WestJet executives began contemplating ways to improve air service from smaller Canadian cities.

After developing a business plan last fall, Mr. Morgan said yesterday that he also considered the Airbus family of A318, A319, A320 and A321 planes. "I'm not down on Airbus by any means, but Boeing was easier for us to do, and works better for us," he said.

NewAir's largest shareholder is Westerkirk Capital Inc., a private equity firm that invests on behalf of the family of Victoria's Sherry Brydson, who is the niece of the late billionaire Ken Thomson.

NewAir's lawyers have registered "Canadiana" for possible use in future marketing campaigns, but a new name for the company has yet to be selected, NewAir communications vice-president Dean McKenzie confirmed.

Mr. McKenzie worked on contract for WestJet on the carrier's advertising campaigns from 1996 until early 2005. Also helping to launch NewAir are former WestJet executives William Lamberton, Gareth Davies and Alan Mann.

The Canadian Transportation Agency has determined that NewAir is an entity that is owned and controlled by Canadians, the first in a series of regulatory approvals expected within weeks.

Canadians living in smaller cities are NewAir's target market, as the company seeks to woo consumers by offering non-stop flights to sun destinations in winter and focus on domestic service in summer.

"NewAir's strategy is to open up and capitalize on new and uncontested market space in the airline and travel industries," according to NewAir's business plan. Air Canada Vacations and WestJet Vacations are among the established players, but Mr. Morgan said NewAir will concentrate on underserved markets.