BUSINESS

WestJet Has A Plan To Compete With NewLeaf, Canada's New Ultra-Low-Cost Carrier

01/14/2016 01:18 EST | Updated 01/14/2017 05:12 EST

MONTREAL — WestJet Airlines says it will use low fares to compete with new discount rival NewLeaf but its "ancillary revenue'' will come only from extra fees that it thinks will "add value'' for its guests.

The Calgary-based airline's chief financial officer told an investor conference Thursday that WestJet won't follow NewLeaf by charging passengers for carry-on baggage or for printing boarding passes at the airport.

"We want to grow our ancillary revenues but we want to grow it through the things we think add value to our guests and their experience with us,'' WestJet CFO Harry Taylor told an AltaCorp Capital conference webcast from Toronto.

Winnipeg-based NewLeaf, which begins service next month, plans to start with two planes flying among seven secondary airports in Canada.

Its website clearly courted the budget traveller when its launch was announced Jan. 6, saying: "Your fare gets you the two essentials: a seat and a seatbelt. The rest is up to you.''

WestJet, which first flew in 1996, started as a discount carrier with a small fleet, but has since grown to become Canada's second-largest airline behind Air Canada (TSX:AC) while adding amenities to its flights.

It has also increased "other'' revenue, which totalled $355.9 million in the first nine months to Sept. 30 from $267.8 million in the comparable period of 2014 — up nearly 33 per cent.

WestJet began charging a $25 baggage fee for economy flights to Europe after Jan. 6, and has raised fees for some reserved seating, in order to generate between $15 million and $25 million in additional revenue this year.