Discount airline eyes Winnipeg for hub but faces opposition from First Nations

Travellers may clear Canada Jetlinesfor landing, but an investment group of seven Manitoba First Nations wants the discountairline startup grounded before takeoff.

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Canada Jetlines wants Transport Minister Marc Garneau to give the B.C.-based company an exemption on foreign investment rules for airlines. The current limit is 25 per cent. The company says it has an investor lined up from Europe and wants the cap raised to 49 per cent.

Canada Jetlines president and CEO Jim Scott says the company will bring new ultra low fares to Winnipeg,and250 direct jobsand1,200 total jobs, as well as inject$260 million into the local economyby the eighth year of operation.

The prairiecity would become an east-west hub for the carrier, he said.

"Winnipeg is, by it's geographical location, a place to have crews based and to have aircraft overnighting, and by overnighting creatingthe maintenance," Scott said.

But to find the capital (approximately $27 million) to satisfy requirements for a federal airline licence, the company wants Ottawato ease foreign investment restrictions.

The company solicited letters from politicians and stakeholders across the country, asking the federal governmentto grant Jetlines theexemption.

"They basically said the same thing; our communities are not being fully developed because they don't have the proper air service into them," Scott said.

But the South Beach Capital Partners are sending the minister a different letter.

First Nations investors want competition grounded

The group of seven Manitoba First Nations recently made a sizable investment in NewLeaf Travel. The Winnipeg-based ticket seller has partnered with Flair Airlines to offer discount flights, operating 60 flights a week since starting in July.

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Speaking on behalf of the South Beach Capital Partners, Brokenhead Chief Jim Bear says the letter being sent tothe federal minister on a rule change asks for a definite no.

"As First Nations we are always being told, 'Why don't you guys get into business? Why don't you work towards self-sufficiency?' Then when we do, to have the audacity of foreign ownership come into play," Bear told CBC News.

Bear says the partners are also writing to Indigenous and Northern Affairs Minister Carolyn Bennett to lobby on their behalf against the exemption.

The group hopes to leverage its investment in NewLeaf into training partnerships with schools such as Red River College.

Bear noted that the port of Churchill and the rail line to the community arein the hands of foreign investors, and now the port is being closed and rail service has been cut in half.

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Airports authority welcomes competition

Winnipeg Airports Authority president BarryRempelwroteto the federal transport minister with his endorsement of the exemption for CanadaJetlines.

Rempelsays Canada's foreign investment restrictions should reflect what's happening globally, and said that as they are, theyare too strict. He points to Australiawith what he saysis a booming airline industry and fewinvestment restrictions.

The airport executive says easing the restrictions could even benefitNewLeafin the long run, but he sympathizes with the investment partners and the company.

"I do feel obviously for them in that they feel the rules are changing since they started that investment."

A recent transportation review for the federal government also recommended the exemption limit increase, but it may take years for those changes to happen.

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Rempelsays more companies such as NewLeaf and additional routes out of Winnipeg aregood news for consumers.

"There is more competition here now. New routes to new places, and the fares are the kind of fares that are encouraging people to travel, so it's a good summer for our community."

NewLeaf wants time to grow

NewLeaf president Jim Young says the company's first month of operation in Winnipeg has been a success and it is eyeingnew routes for the fall. As a sign of commitment to the city, Young says, it hasdecided to base an aircraft here, which means crews and maintenance work feeding the local economy.

But Young isn't pleased with the idea of investment restrictions being changed for Canada Jetlines just as NewLeaf is taking off.

"There is already an ultra low-cost carrier in the combination of NewLeaf and Flair in the market. As a result, let's see how that works... We don't necessarily need to see a ton of competition thrown into the market."

But he says they are ready to compete ifnecessary.

Young says he is proud of the investment South Beach Capital Partners has made, and the First Nations investment is about as Canadian as you can get.

"Getting First Nation investment was a big achievement as far as NewLeaf was concerned. It's good for Manitoba."

There's no timeline on a decision from the federal government.A spokesperson for Transport Canada saidthe department "is currently reviewing the request by consulting stakeholders and evaluating the public interest."