The owner of Frontier Airlinesis investing in an ultra-low-fare airline in Canada.
Backed by financial commitments from a consortium of Canadian investors and Frontier owner Indigo Partners, LLC, Enerjet, a Canadian charter carrier, will be rebranded and expanded.
Indigo has a controlling interest in Frontier.
The airline will use the model that offers low base fares and additional charges for seat assignments, baggage and reservation changes.
A release stated that the airline will operate an “extensive network of destinations across Canada and into the US.”Terms of the transaction were not disclosed.
“We believe there are millions of Canadians who would jump at the chance to have a simple, safe, and affordable alternative to the sky-high costs of air travel,” said Tim Morgan, who will serve as CEO.
“We believe we can significantly increase the size and competitiveness of Canada’s domestic and trans-border aviation market by offering an ultra low-cost alternative to the high cost of air travel,” said Bill Franke, Indigo’s managing partner. “Our goal is to be in the market by this time next year to help more Canadians visit family and friends over the holidays and for years to come.”
West Jet was founded as a low-fare alternative, but has struggled with cost and labor issues and has shifted toward international routes. West Jet also launched a separate low fare carrier as did Air Canada. That has created a crowded market in the northern nation that Indigo and other investors believe is ripe for the ultra-low-fare model.
Meanwhile, Southwest Airlines, the largest lower-fare carrier in the U.S. has stayed out of the Canadian market, while expanding in Mexico, Central America, and the Caribbean.
In addition to Frontier, Indigo has a controlling interest in Mexico’s Volaris. Holdings also include a European airline. Indigo is now in negotiations regarding an investment in Iceland-based Wow air, which is in financial difficulty.
Frontier has 200 Airbus jets on order and other Indigo carriers have an equal number on the books.
Frontier briefly flew out of New Castle Airport but shifted flights to Philadelphia. It now serves dozens of cities from the airport, typically with flights that operate a few days a week.