The Company: Enerjet
Enerjet is a fledgling charter airline and tour operator. The Calgary-based company has leased two 131-seat Boeing 737-700 Next Generation planes to launch its business. First, Enerjet is tapping into the industrial sector, including transporting workers to and from northern Alberta's oil sands. Then it will seek to start tour and leisure operations in the fall of 2009, hoping to offer non-stop flights to sun destinations from smaller Canadian centres. No cities have been selected yet for service, but "secondary airports" could be targeted in places in Alberta such as Lethbridge, Grande Prairie and Fort McMurray, as well as B.C. communities such as Kamloops, Kelowna and Prince George. Enerjet, which produced preliminary business plans under the temporary name NewAir & Tours Group, says it is keen to blaze an entrepreneurial trail. Its "core strategy is to capitalize on uncontested market space, focusing simultaneously on low costs and differentiation from any closely related competitor." Enerjet is being modelled after Allegiant Travel Co., a Las Vegas-based firm that runs a vacation division and low-cost airline, but the Calgary executives are adapting the U.S. concept for Canada.
Founded: Enerjet's initial business plan was developed in 2007 by four former WestJet Airlines Ltd. executives, led by WestJet co-founder Tim Morgan. Mr. Morgan, WestJet's former head of operations who used to pilot planes for Canadian Regional, is guiding Enerjet with William Lamberton, former WestJet vice-president of marketing. They're being supported by Gareth Davies, former WestJet vice-president of technical services, and Alan Mann, a former WestJet accounting executive. Their new Enerjet duties: Mr. Morgan is president and chief executive officer; Mr. Lamberton is marketing vice-president; Mr. Davies is vice-president of technical operations, in charge of locating aircraft and overseeing maintenance; and Mr. Mann is chief financial officer. Also helping launch Enerjet are Tim Morgan's brother, Darcy, who is an Enerjet director, as well as communications vice-president Dean McKenzie, who previously crafted WestJet advertisements.
Company background: Enerjet completed its primary phase of financing in the spring of 2008. Although Enerjet won't discuss a figure, industry experts have estimated that roughly $50-million has been raised so far from private investors. Toronto-based private equity firm Westerkirk Capital Inc. took part in the initial round of financing, and is among Enerjet's 400 shareholders. Enerjet has its hands full just preparing to launch flights, so it expects to stay a private entity in the foreseeable future, although it hasn't ruled out an initial public offering in the long term. Mr. Morgan envisages Canadian investors supplying at least 75 per cent of total financing for NewAir, keeping within rules that limit foreign ownership of domestic carriers to 25 per cent of voting rights.
Staff: Nearly 150 non-union employees are expected to be in place by next fall's launch. There are currently about 50 staff.
Regulatory approvals: In late November, Enerjet received its air operators certificate from Transport Canada and its air operators licence from the Canadian Transportation Agency. With the approvals, Enerjet embarked on a "soft launch" with its maiden flight on Nov. 30, transporting workers from northern Alberta's oil sands to Gander in Newfoundland and Labrador.
Competition: Enerjet believes there's a niche market that's being overlooked by WestJet and Air Canada "Middle Canada." That's a reference to markets that are under-served or neglected by Canada's two largest carriers. Air Canada and its affiliate, Jazz, have trimmed flight schedules amid high fuel prices and the economic downturn, including cancelling or scaling back routes to smaller communities. On the other hand, WestJet has been generally adding seat capacity. WestJet and Air Canada have an advantage in offering multiple leisure destinations. Transat, Sunwing, Signature, Sunquest, Air Canada Vacations and WestJet Vacations are among the established players on the tour side. Enerjet doesn't want to go head-to-head against these players, seeking instead to build a boutique brand.