Canada Jetlines Ltd. will begin operations with four planes next year instead of six as originally planned and has scaled back plans to start flying out of two airports in Southern Ontario.

The planned June 1, 2018, launch is on schedule, but flights will begin initially from Hamilton only and not Waterloo, Ont., chief executive officer Stan Gadek said in interview. The airline will offer service to Waterloo eventually, Mr. Gadek said. The airline has chosen Abbotsford, B.C., as its Western Canada hub.

Canada Jetlines is one of two ultra-low cost carriers (ULCC) scheduled to take to the skies in 2018. The other is Swoop, which will be operated by WestJet Airlines Ltd.

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Both airlines believe there is demand for a carrier that will offer rock-bottom fares mainly to leisure travellers who can't or won't pay full fares but might be willing to pay fees for baggage, meals and the ability to change flights.

"One of the questions we get is, 'Is the market big enough for Canada Jetlines and Swoop?'" Mr. Gadek said as he ran through a slide presentation he made to potential investors in Toronto. "I believe the market is big enough for both."

That belief is underpinned by the history of ULCC startups in the United States and Europe, he said. New carriers offering rock-bottom fares stimulate demand as well as grab share from existing players. Lower prices should stimulate demand for 17 million new passengers by 2023, the airline's presentation shows.

Mr. Gadek said the arrival of Swoop at around the same time Canada Jetlines launches might be good for the start-up carrier because Swoop will advertise heavily and that will encourage travellers to look at other low-fare options.

He believes Swoop is not aimed at Canada Jetlines but more at Air Canada's low-cost carrier Rouge, which Canada's largest airline plans to expand after reaching a new agreement with its pilots in September that allows the carrier to expand Rouge beyond its original limit of 50 airplanes.

Air Canada officials said in an investor day presentation in September that it will expand Rouge to some regional routes in Canada.

Canada Jetlines plans to increase its fleet by four planes annually through 2023 after it starts operations next year.