"We have built WestJet from its low-priced, regional roots", the airline's chairman Clive Beddoe said in a statement.
WestJet plans to enter the ultra-low-cost market to provide Canadian travellers with more no-frills, lower-cost travel options.
Launch of the subsidiary remains contingent on WestJet reaching agreements with pilots and receiving regulatory approval, the company adds.
WestJet Airlines Ltd.is a Canada-based company, which provides airline service and travel packages.
But ultra-low-cost carriers take it a step further.
WestJet operates 119 aircraft, including 46 Boeing 737-800s, according to Flight Fleets Analyzer.
But if you wanted to be fed on a flight that is more than 7,600 kilometres, it came at a cost, leading to complaints from fliers.
Late previous year, Minister of Transport Marc Garneau granted investment exemptions to ULCC start-ups Jetlines (Vancouver Int'l) and Enerjet (ENJ, Calgary) thereby allowing foreign investors to own up to 49% foreign voting interests in either airline. Pilots have negotiated contracts covering wages and scheduling through that group, as well as new business decisions, such as adding transatlantic flights.
WestJet launched in 1996 as a low cost carrier, but in recent years has been moving more upmarket and has continued its global expansion, adding United Kingdom and Ireland flights to its North American and Caribbean destinations.
In recent months WestJet's executives downplayed threats posed by the three incumbents, even while responding aggressively to competitive encroachment.
"We have airport costs and navigation fees that are... the highest, at least, in North America, if not the world", Taylor said. Further, the launch of the ULCC may not have the impact now anticipated by WestJet. For instance, NewLeaf in November 2016 announced plans to fly to Phoenix from both Edmonton and Calgary; days later, WestJet announced it would launch the same route.
This is a return to the roots for the Alberta company that started as a discount carrier.
Among 8 analysts covering Westjet Airlines Ltd.
"We have built WestJet from its low-priced, regional roots into a renowned, worldwide airline with service to 21 countries and today it's all about disrupting at the price-sensitive end of the market".
A spokesman for Air Canada was not available for comment.