CALGARY - WestJet Airlines Ltd. (WJA.TO) says it plans to launch a new cheap airline later this year.

The Calgary-based company says it will start with 10 Boeing 737-800 aircraft in its initial fleet and offer no-frills, lower-cost flights.

WestJet says the new yet-to-be-named airline carrier is subject to agreement with its pilots and any required regulatory approvals.

Co-founder and chairman Clive Beddoe says the so-called ultra-low-cost carrier will broaden the company's growth opportunities as it goes after the price-sensitive end of the market.

WestJet started in 1996 as a discount carrier with three aircraft serving five destinations in Western Canada.

The airline, together with regional carrier WestJet Encore, now offers scheduled flights to more than 100 destinations in North America, Central America, the Caribbean and Europe.

Discount airline NewLeaf Travel, who said earlier this year it was cancelling plans to offer flights between Alberta and the Phoenix-Mesa airport in Arizona this year because WestJet copied its idea, responded to the news Thursday.

“The greatest compliment you can give someone is when they copy you," Julie Rempel, a NewLeaf spokesperson, said. "This is proof we’re doing something WestJet sees as a great contribution to Canadian travel.” 

Jim Scott, CEO of Vancouver-based low-cost carrier Canada Jetlines, also responded.

"Today's announcement by WestJet is recognition that millions of Canadians continue to be underserviced by airlines in markets throughout the country, while millions more are looking for a lower-cost option than what has been offered by Canada's two dominant carrierss," Scott said in a statement. "Today's announcement offers nothing more than an 'airline within an airline' that will not increase competition into the market, and it remains to be seen whether it will be able to achieve the full benefits of a ULCC."