High-powered Investors Hold Key to Enerjet’s LCC Future

The business acumen and industry knowledge of a trio of Canadian institutional investors and backer Indigo Partners will enable Canadian charter airline Enerjet to compete successfully when it relaunches as an ultra-low-cost carrier (ULCC) in the Canadian domestic and U.S. transborder markets in 2019, according to Enerjet’s co-founder, lead investor, and CEO, Tim Morgan.

Speaking with AIN after 10-year-old Enerjet announced on December 20 that it would become a scheduled-service ULCC next year, Morgan described his company’s new backers as “some of the best investors I could possibly have to come with me” in the effort to reposition Enerjet. The former director and COO of WestJet described the Canadian institutional investors—mid-market private equity firms TorQuest Partners, Claridge Inc., and Stephenson Management—as “very strong” players in Canada’s financial markets, while Indigo Partners offers extensive experience in running low-cost carriers. “They’re going to be hands-on” partners in Enerjet’s strategic decision-making, said Morgan. “The people I have with me know how to compete.” 

Other than confirming the ULCC will not operate as Enerjet but will reveal a new name from a shortlist now under consideration in the new year, Morgan did not offer much detail regarding the ULCC’s network and future fleet. He confirmed Enerjet would not use the "FlyToo" name it used as a placeholder in 2016, when the company began considering becoming a ULCC and hinted at launching scheduled services in 2019’s third quarter. However, the launch “depends on when we acquire aircraft” and other factors, including filling most senior management positions. “We are giving ourselves a lot of time,” said Morgan.

Enerjet has returned to its lessors two Boeing 737-700s it used for charter flying. Indigo Partners, whose portfolio includes outstanding orders for 430 Airbus A320neo-family narrowbodies, “has the ability to help” in evaluating future fleet types, but Enerjet’s management will decide what type best suits the carrier, said Morgan. He confirmed Enerjet will launch with “at least three or four” new aircraft.

Morgan said Enerjet will make a further major announcement in 2019’s first quarter and that the ULCC will employ a simple fare structure. “The ULCC model is not new. It’s not rocket science,” he said. “We will do the same kind of things as other ULCCs do and which have proven to be successful.”