WestJet are firing another shot at Flair (under the guise of 'listening to the local market'...funny how they don't do that anywhere Flair doesn't exist...must be a total coincidence) by adding back 4x weekly mainline on top of Swoop: https://www.newswire.ca/news-releases/w ... 40101.html
Which likely frees up the Swoop tail, as well as the others they've been sandbagging, to do other things.
So who do you think has lower costs?
Swoop who fly organically with the benefit of the larger entities economies of scale but much less complexity, (and therefore cost, with no brand confusion issues to contend with), or Flair, who have all their costs to contend with, and now have to pay a margin to Transat to operate the flights for them?
WS looked at this exact model, albeit with different aircraft types, in 1995. Preliminary discussions occurred with KFC in Calgary.
Basic analysis definitively concluded the model did not work. Little has changed since, (other than fuel is 3x the price).
Flair has yet to figure this out. They will, the hard way.
The lack of domestic investor interest in the venture, which is required to keep their ownership % on side with 49% cap, tells the story. If investors thought it was a solid bet, Flair would be turning down equity offers left, right and center.
Anyone dialed into the financial side of the business knows that Flair story is stale on the street and has no traction. I know they were pounding the pavement recently, and were doing so without their Executive Chairman in tow, which, frankly, is a bit weird. Investors want to see a good plan and good management. Showing up to pitch sessions without the big Kahuna does not inspire confidence.
Claiming to be profitable in July in Canada isn't much of a story. Toys R Us were profitable in December. So what? A duck with a lawn chair strapped to its back will make money in Canada in July and August.
It's those other 10 months of the year that investors are interested in and after 5 years + of trying, they remain uninterested in the story.