Canada's federal cabinet has overruled a National Transportation Agency decision and allowed coach operator Greyhound to launch a low-cost, no-frills airline that became Canada's fourth scheduled trans-continental carrier in early July.
The NTA had previously blocked Greyhound's plans by ruling that the company could not obtain its own licence, because of its majority US ownership. The regulator also ruled that Greyhound could not use the operating licence of charter operator Kelowna Flightcraft, which planned to provide the aircraft, cockpit and cabin crew to operate. The latter ruling was overturned by the cabinet.
Greyhound Air launched services in early July with four of Kelowna's B737-200s, fitted with new hushkits paid for by the US company. Two more aircraft were set to join the fleet in mid-July. Barry Lapointe, Greyhound Air's president, is unhappy his company is required to hushkit the fleet, while rival low-cost operator WestJet, which also flies 737-200s, is exempt because it is a startup. Greyhound could not claim that exemption because of its reliance on Kelowna's existing licence.
Analysts are sceptical that Canada's market is big enough for four scheduled airlines plus several charters, but Greyhound claims it has a unique strategy by feeding its bus passengers to low cost flights at key cities. Copying Southwest's strategy, it hopes to generate new traffic rather than divert it from rivals.
Greyhound has also taken steps to spin off its Canadian operations into a Canadian-owned subsidiary so that in future it could qualify to hold its own operating licence.
David Knibb
Source: Airline Business
