New low-cost flights out of Fredericton are in for the long haul, says airline CEO

The CEO of Fredericton's newest airline service says "ultra-low-cost" flights are here to stay, with plans for continued expansion.

Lynx Air announced recently three flights a week from Fredericton to Calgary and Toronto, starting June 12.

Merren McArthur said the airline's business model involves finding airports without low-cost airline offerings and the East Coast is a perfect example.

"Fredericton, New Brunswick, has historically been under served by ultra-low-cost carriers," McArthur told Information Morning Fredericton. "That means fares have been too high for too long."

McArthur said the choice to offer direct flights to Toronto and Calgary came after the airline did its own research.

"We've identified that in Eastern Canada particularly, there's a relatively low proportion of air opportunities," she said, "So it's going to be a real focus of ours."

Fred Lazar, a professor in the Schulich School of Business at York University in Toronto and an airline industry analyst, said with WestJet and Air Canada somewhat pulling back from Eastern Canada, Lynx is taking advantage of what seems to be a good opportunity.

WestJet pulled its services out of all New Brunswick airports last fall, and has yet to reinstate them.

Air Canada also cut some flights from Saint John to Toronto and Montreal at the end of last summer, but that was temporary.

The COVID-19 pandemic disrupted the airline market significantly and more recent labor shortages have exacerbated the issue.

Over the last year, there's been an uptick in flight delays, cancellations and baggage woes as airlines cope with demand.

Lynx flights from Fredericton to Toronto are as low as $79 and from Fredericton to Calgary as low as $199, but in-flight entertainment, food and drinks are not offered.

Lazar said ultra-low-cost carriers are able to charge these prices because they have much simpler operations than carriers like Air Canada and West Jet.

He said they usually only have one type of aircraft, which for Lynx is the 737 Boeing, they have smaller overhead costs than bigger carriers, and there's no seniority in their labour pool yet, so they're likely paying lower wages on average.

But Lazar said the flight prices for these ultra-low-cost carriers likely won't stay as low as they are now.

"You'll always see them introduce very low fares to get a foothold in the market, to become visible, to develop a buzz," he said. "And over time, the fares will rise, nowhere near the levels of Air Canada and West Jet of course, but they will rise."

Still, he sees the entry into Atlantic Canada as a positive thing. He said it will put pressure on the established carriers to be more cost conscious, and it will give travelers more option since the two established carriers likely won't be building up capacity in Atlantic Canada.

McArthur said Lynx chose to include a flight option to Calgary because there is a strong connection between both communities.

"There are people who work in Alberta and travel home to New Brunswick, and there are people who study in New Brunswick and who grew up in Alberta," she said.

McArthur said the airline has seven aircraft, limiting the number of flights it can offer, but the plan is to grow the fleet to 46 "over the next few years."

The flight from Fredericton to Calgary will stop in Toronto, but passengers will not need to exit the plane and she said they will wait on the plane for "no more than an hour."

McArthur said whether these flights are offered year round will depend on demand.

"If the demand drops off over the winter period, we might reduce services… it's too early to speculate."

Lazar said the reality is that the Canadian market can't support three ultra-low-cost carriers: Flair, Swoop and Lynx.

"If we have this interview again a year from now, what we'll be discussing is who survives of the three and why."