Chief executive Gregg Saretsky said the airline industry has changed since the company began flying in 1996.
"As the price-sensitive consumer seeks out alternatives to what is presently available, we believe there is no better airline suited to bring [ultra low-priced carriers] to Canada than WestJet", WestJet CEO Gregg Saretsky said in a statement.
The Canadian airline expects the service to start in late 2017 with an initial fleet of 10 high-density Boeing 737-800s.
Calgary-based Enerjet, which is pursuing regulatory approvals for a low-priced commercial air service offering routes nation-wide, said it has known all along that WestJet would take action to defend its market position against new low-cost entrants.
"We've seen success in Europe and other parts of the world where larger airlines then start a division that they consider a low-priced carrier, where it's really unbundled fares and we see them all over the world".
WestJet, which started life as a low-priced airline, added premium services in a bid to increase revenue, but has scaled back its cost structure to return to its roots.
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Air Canada launched its discount brand Rouge with flights in 2013 servicing Europe and the Caribbean.
"Historically, other ULCC's including Spirit Airlines and Ryanair have generated above average returns in their markets and we believe WestJet could see similar returns", Murray wrote in a report. Members of our WestJet Rewards program earn WestJet dollars on flights, vacation packages and more.