A new Canadian airline is opening a ultra-low-fare corridor between Toronto and both New York and Chicago with fares starting at $84

• Canada's Flair Airlines is launching flights between Toronto and both New York and Chicago.
• Fares start at around $84 for a one-way ticket with Flair going up against the likes of Air Canada.

Flair Airlines is taking its bite out of the Big Apple and the Windy City.

The ultra-low-cost Canadian airline is expanding to more destinations south of its border and adding flights to New York City and Chicago from Toronto in 2022. Flights to New York are scheduled to launch on April 7 while flights to Chicago plans to launch on May 17 with fares starting at around $84 one-way.

John F. Kennedy International Airport will be Flair's gateway to New York City, offering an alternative to the nearby LaGuardia and Newark Liberty International Airports that are favored by Canadian airlines. Twice weekly flights between Toronto Pearson International and Kennedy International launch on April 7, rising to four times weekly flights starting May 16.

In Chicago, Flair will use O'Hare International Airport instead of Midway International Airport to take advantage of O'Hare's longer runways that could potentially accommodate longer flights to future destinations. Chicago will see three times weekly flights during its initial launch.

A potential fare war leading to lower ticket prices

New York City is one of the most popular US destinations for Canadians with a strong mix of business and leisure traffic.

"It's important for us to serve there," Garth Lund, Flair's chief commercial officer told Insider of New York City. "It's a huge market, just given the population size. There should be a lot of demand plus it's a great place for people to visit."

But in New York, Flair has chosen a market with no shortage of competitors. On the Toronto-New York route alone, direct rivals include Air Canada, WestJet, American Airlines, and Delta Air Lines, with United Airlines and Porter Airlines serving the route from nearby Newark.

"There is a lot of capacity already in the market but Flair will be, really, the only low-cost airline," Lund said. "We want to come in and stimulate demand off of low fares [and] make the trip affordable for people who maybe couldn't afford it previously."

Air Canada, the largest Canadian airline in New York and Chicago, may move strongly to protect its lucrative transborder routes and Flair might start a fare war that sees lower ticket prices.

"They might slash flares," Lund said of competitors on the route. "But I think for them, it can only be a temporary measure given their higher cost base. It's just not sustainable for them to exist at the lower fare levels."

Margins may be thin given the high taxes levied on international flights and Flair will rely on travelers purchasing tax-free ancillaries. "Our experience is that even on the shorter legs, people still do want to buy a bag, they would still want priority boarding, they might still want to purchase a seat," Lund said.

More access to Canadian cities for Americans, and vice versa

New York and Chicago join 9 US destinations that Flair has and is planning to launch during the COVID-19 pandemic, and Toronto may just be the start for Flair in both cities. The airline may soon connect both cities with its other Canadian bases, namely cities such as Vancouver, Ottawa, Edmonton, according to Lund.

COVID-19 entry requirements for vaccinated Americans entering Canada include a negative PCR test taken within 72 hours of a flight bound for Canada.

Flair's new Boeing 737 Max aircraft will operate the new routes to New York and Chicago. Travelers will be able to purchase snacks and drinks as well as use the Flair In-Flight App on their devices to view streaming content and play games.

"Low cost doesn't necessarily mean cheap," Lund said. "We want it to be a good experience for our customers."