Air Canada routes blow to WestJet
Calgary-Las Vegas added: 'Trumps WestJet' and is 'just the beginning': analyst
Chris Sorensen, Financial Post
Friday, June 03, 2005
After a short breather following the collapse of Jetsgo Corp., the competition for Canada's skies is once again heating up as Canada's three largest carriers -- Air Canada, WestJet Airlines Ltd. and CanJet Airlines -- attempt to outmanoeuvre each other on domestic and transborder routes.
Air Canada said yesterday the arrival of new regional jets has allowed it to launch several new city pairs, including Calgary-Las Vegas and Vancouver-Las Vegas.
The routes will be served by an Airbus A319 aircraft, which was previously used to fly between Houston and Calgary before it was replaced this week by a new 75-seat Bombardier CRJ-705 flown by Air Canada's regional carrier Jazz.
"This trumps WestJet," said Rick Erickson, an independent Calgary-based analyst, who said the Calgary-based low-cost carrier had been eyeing the gambling Mecca for its portfolio of leisure destinations in the United States.
"More importantly, this is just the beginning," Mr. Erickson said, referring to the anticipated delivery of between 45 and 90 new regional jets from Bombardier and Embraer over the next several years. "Does this spell trouble for WestJet? I'm sorry to say, but I think it does."
Mr. Erickson added that Air Canada's move to enter Las Vegas could also be tied to parent company ACE Aviation Holdings Inc.'s recent decision to invest US$75-million in the merger of US Airways Inc. and America West Airlines. In addition to giving Air Canada Technical Services a line on $1.5-billion worth of outsourced maintenance work, the 7% equity state is being touted as a way for Air Canada to increase its presence in U.S. markets by gaining better access to gates at key U.S. airports.
Air Canada also said yesterday it will use existing regional jets and turbo-prop aircraft to add new non-stop flights on domestic routes. They include Edmonton-Regina, Edmonton-Saskatoon, Hamilton-Montreal and Hamilton-Ottawa.
"Air Canada is now able to implement significant network improvements that will benefit consumers with more point-to-point, non-stop flights and enhanced schedules," said Ben Smith, Air Canada's vice-president of network planning, in a statement.
Karl Moore, a business professor at McGill University, said Air Canada's new approach to the domestic market, using smaller aircraft to offer more non-stop service between more cities, promises to create headaches for WestJet, which is limited to flying busier routes using its larger Boeing 737 aircraft. "What they are doing is providing opportunities in these cities that will take some of WestJet's customers away."
However, Clive Beddoe, WestJet chief executive, said he is not overly worried about competition from Air Canada or Jazz, telling attendees at an industry conference hosted by Insight Information yesterday that he expects the country's largest airline to suffer from rising costs. Nor does he see Nova Scotia-based CanJet as much of a threat, despite the fact that CanJet recently began operating flights in Western Canada, WestJet's backyard.
Mr. Beddoe said WestJet plans to continue adding transborder flights to its network and has recently renewed a deal worth $300-million to continue flying sun-seekers for charter tour operator Transat A.T. Inc.
He also poured cold water on Air Canada's decision to invest in the U.S. airline market. "I think it's going to be very interesting to see how the US Airways-America West thing works out," Mr. Beddoe said. "I would suggest it's going to be a negative for America West and could end up damaging it."
I hate to say this but....I could see all this happening months ago!!
Personally, I think the RJ and Embraer gives AC/Jazz so much flexibility in pax loads and in range. You can have a small load and still make a profit. Something you can't do with 737700's or 737800's at Westjet.
Also, I think the AC deal with United will be a boost for securing landing slots and gates besides the maintenance contract.
All in all, I think it will be another interesting year in aviation.
With all the AC and WJ bashing aside this could be interesting. I do wonder how well Air Canada will do on these runs. One thing Air Canada doesn't understand is the West. It is like the Liberals there is a certain way people here in the West perceive things. If you don't see or understand it you will not be successful.
That coming for a 28 year veteran of Air Canada. The West has its way of doing things and unless you were born and raised here or lived here for a while you will not understand. I hope they do well and I hope all airlines do well as much as some people may say other. It is in the best interest for all pilots.
flyer 1492 wrote:People don't care who they travel on. They will always look for the best price and the best times.
No people will care who they travel with. Since it is most probable that the airlines will match fares and times are usually fairly close. It then comes down who I want to fly with. Then pick the airline they prefer that is the point I'm making.
Understanding the passenger as they differ from city to city and province to province is a very important field to recognize and comprehend. It is why airlines like Canadian North or Canjet do well in the selective markets. They understand the culture they are dealing with.
Not to say people don't always go for the best deal they do, but it is much easier for an airline to match a price then try to change their operations.
I ALWAYS choose AC to take me to the place I'm rotating out of. My company will pay the extra to get me there on time and with my luggage. But one has to realize that Can'tJet and Worstjet will be there to pick up the crumbs.
I hate to say it but Westjet has a bettre OTP and a better bagage ratio than Air Canada and most airlines for that matter.By the numbers there's a much larger chance that you will arrive late and loose your luggage when you fly Air Canada. It's just the facts as hard as it is swallow.
If you are connecting on a flight, then yes it is transfered for you.
If you are talking about interline baggage transfers, then no, I believe they don't. But interline baggage is an extremely small percentage of baggage at AC as well, and even if every single interline bag was lost it would probably only be 1-2% difference in bag handling numbers.
But your point is taken, that there are always varying circumstances that have to be taken into account. In the end they are only statistics, whose application is highly malleable.
But to say that someone always takes AC so that they leave on time and get there bags, as opposed to 'wastjet', is factually and anecdotally incorrect. It is plainly obvious that it is from an internet poster whose sole goal is to deride their competition, with no basis in truth.
It will definately be an interesting time over the next year as Air Canada's new RJs come online. However I have learned to take anything Mr. Erickson says with a grain of salt after an article that appeared a month or so a go where he was quoted as saying something along the lines of "The addition of these new Embraers will allow Air Canada to start to serve markets such as Calgary - Lethbridge which would normally be considered to small for air service". I had to laugh considering Lethbridge has had Air Canada service for years and years, from Air BC to CMA. Not only that but Mr. Erickson's offices are located in Calgary.....
You really cannot believe anything you read from our so called "journalists" or self declared "industry experts".
The Post recently stated that the 25,000 layoffs at GM would help Canadian autopart manufacturing while the Globe reported the opposite.
"The sun is baaad for you..........no good for you......no, its' peanut butter thats bad."
These guys don't know if they should eat, sleep, shit or steal third.
Rick Erickson.......an independant Calgary Based Analyst. What the hell is that?
