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Air Canada Strategy Outlined  
User currently offlineCaptaingomes From Canada, joined Feb 2001, 6413 posts, RR: 56
Posted (10 years 5 months 1 week 4 days 4 hours ago) and read 3596 times:

http://www.achorizons.ca/en/issues/2003/november/new_leaf.htm

Air Canada CEO Robert Milton has outlined the strategy Air Canada will take as it emerges from bankruptcy. From what I see, I like it a lot. What is refreshing, is that Air Canada will NOT be a low cost airline. It will remain a full service airline, with frequent flyer points, 2 class seating (on many routes), meals (at a cost on shorter routes), access to lounges, Star Alliance privileges, interlining and all the things that people actually do want in airline travel, but have shown lately that they do not want to pay an arm and a leg for. If he is to be believed, Milton claims that Air Canada's costs have been reduced dramatically so that they may compete on price on a sustainable level with the LCC's. Domestic prominence will be reduced, and more focus will be placed on U.S. and international routes, including many secondary markets. Also, look out for profit sharing for the employees.

I do like what I read, and it seems as though it will probably work. Any thoughts? Let's see what the next 100 or so replies have to say (including about 75 off topic replies)  Smile


"it's kind of like an Airbus, it's an engineering marvel, but there's no sense of passion" -- J. Clarkson re: Coxster
42 replies: All unread, showing first 25:
 
User currently offlineLeskova From Germany, joined Oct 2003, 6075 posts, RR: 70
Reply 1, posted (10 years 5 months 1 week 4 days 4 hours ago) and read 3531 times:

Seems like a good outlook for Air Canada - a well planned strategy and a vision for the future... and a CEO that does seem to be in touch with reality (noticeable in his comments at the end of the article).

Seems like good times ahead for Air Canada...  Wink/being sarcastic



Smile - it confuses people!
User currently offlineGoose From Canada, joined Aug 2003, 1840 posts, RR: 15
Reply 2, posted (10 years 5 months 1 week 4 days 4 hours ago) and read 3517 times:

Also, look out for profit sharing for the employees.

Yeah... "Look out." If the company posts a loss, would the employees get a bill for a couple hundred bucks instead of a fat cheque? "You owe us...."

... I know, probably not. But it still made me laugh.....  Big grin

It'd be nice to see Air Canada concentrate on doing what it does well, and let certain Canadian markets go to its competitors - or even its Zip subsidiary. Maybe they have learned that chasing after their competition and trying to put the little guy out of business is detrimental to their overall health... and the health of the industry.

As for cost reductions.... we'll see. I don't think AC has posted their quarterly report yet......



[Edited 2003-11-08 23:05:16]


"Talk to me, Goose..."
User currently offlineCaptaingomes From Canada, joined Feb 2001, 6413 posts, RR: 56
Reply 3, posted (10 years 5 months 1 week 4 days 3 hours ago) and read 3482 times:

Goose, you are right, we still haven't seen the quarterly report! Can't wait to see that!  Smile


"it's kind of like an Airbus, it's an engineering marvel, but there's no sense of passion" -- J. Clarkson re: Coxster
User currently offlineLymanm From Canada, joined Jan 2001, 1138 posts, RR: 1
Reply 4, posted (10 years 5 months 1 week 4 days 3 hours ago) and read 3478 times:

I think AC's jaunt as a wannabe LCC in the past 2 years has been good for them as far as introducing innovation into a company that needed it. The lessons from Tango and the pay structure from Zip will last, even if the names won't. All this can contribute to AC being more responsible and more efficient.


buhh bye
User currently offlineGoose From Canada, joined Aug 2003, 1840 posts, RR: 15
Reply 5, posted (10 years 5 months 1 week 4 days 3 hours ago) and read 3470 times:

... "Can't wait."  Big grin I think CanadaEH posted in another threat that it's a little "unsettling" that AC has delayed its quarterly report so long. I'm sure some shareholders are getting nervous.....

I'm a little leery of an Air Canada that says it will relax on certain markets to concentrate on others..... if WestJet or someone else starts cutting seriously into AC's prominance - say, in the transborder market, where there is currently no scheduled, national, Canada-based competition other than some JetsGo and CanJet flights out east....

.... if WestJet starts hurting AC's transborder pax share wholesale, it'd be interesting to see if AC will keep with its new strategy of live-and-let-live, or revert back to its former ways of predatory pricing and undercutting competitors to push them out or under. They did this very thing to Canadian Airlines - it was one major reason CP was finally put into a position in which it could be absorbed by Air Canada....

.... if that sort of crap starts over again, we'll be back to square one.... with AC in dire straights again, or at least in a fragile position.



"Talk to me, Goose..."
User currently offlineCaptaingomes From Canada, joined Feb 2001, 6413 posts, RR: 56
Reply 6, posted (10 years 5 months 1 week 4 days 3 hours ago) and read 3430 times:

Goose ... true on your trans-border thoughts. However, AC has a fleet that is currently being utilized unprofitably. Westjet has its planes being utilized profitably. Air Canada must change their direction, and this just might be a good way. Westjet is successful in what they are doing, and by staying with their current strategy, and with less competition from Air Canada by dumping prices, then both companies will win, and in effect, the industry will win.

Now ... of course Westjet can just take up on all those options they have on 73G's. I saw a recent Air Transport World article which included Westjet's fleet plan, but I don't recall exact figures. Needless to say though, in a couple of years, the fleet will grow to roughly 40 aircraft, but with another 40 or so options. If Westjet were to expand into trans-border flights, they would take up many of those options.

Alas, even if Westjet does go towards trans-border flights, they would likely be going after different markets, as Air Canada would be interested in transiting as many passengers onwards from Vancouver or Toronto to international destinations. This would likely be from many new secondary markets, and thus passengers that Air Canada would otherwise never be able to get, and also Westjet would not be able to get since they do not have the international connections.



"it's kind of like an Airbus, it's an engineering marvel, but there's no sense of passion" -- J. Clarkson re: Coxster
User currently offlineCaribb From Canada, joined Nov 1999, 1633 posts, RR: 8
Reply 7, posted (10 years 5 months 1 week 4 days 3 hours ago) and read 3398 times:

Air Canada can outline whatever strategy it wants but it will only work if as Lymanm says they be responsible and efficient. I'll just add they should also stick with their role choice for the airline and not be all over the board like before. Furthermore whatever it is they morph into this time for God's sake look, act and be professional and give your competition something to worry about. Pleaseing the customer will at worse only want to make them come back.... so this means everyone from Milton to the check in clerk should learn to get along, at least publically and not take out their frustrations on the poor sap trying to get home for Christmas. Lastly just stay realistic, we are talking about a Canadian airline here, not some mega US carrier.. there are more people in the State of New York than there are in ALL OF CANADA... I've seen enough silly route combinations that were better suited to much larger markets than anything realistic out of Canada. Toronto isn't Atlanta. Montreal & Vancouver are not New York & L.A. and the Canadian population is spread out thinly along the US border.. that's reality and let's live within it.

As far as the strategy itself is concerned.. looks good on the surface. Reducing domestic importance will be a good thing if they turn to Zip or a more efficient set of regional jets to run their flights. Upgrading YYZ & YVR for international routes.. ok but I really don't know where they have left to expand to that makes a lot of sense at this point. All key routes are already well established. Anything new will be secondary and will have to be developed. IF they plan to funnel Americans through YYZ and YVR good luck. That might work short term but Americans will quickly see this and find a way to secure their market and not let a Canadain company take it away from them.. so long term I can't see this really working. Maybe their strategy will be to work with US Airways and United. Those carriers though will likely want to run their own planes eventually. So I don't really know if any of what I've read so far is really going to go anywhere. Sounds "ify" to me.



User currently offlineGoose From Canada, joined Aug 2003, 1840 posts, RR: 15
Reply 8, posted (10 years 5 months 1 week 4 days 3 hours ago) and read 3391 times:

Now ... of course Westjet can just take up on all those options they have on 73G's. I saw a recent Air Transport World article which included Westjet's fleet plan, but I don't recall exact figures. Needless to say though, in a couple of years, the fleet will grow to roughly 40 aircraft, but with another 40 or so options. If Westjet were to expand into trans-border flights, they would take up many of those options.

Maybe I can fill in some blanks....

If you're talking about overall fleet plans - WestJet currently operates 44 aircraft. Tail 216 was delivered only days ago in YYC - making it the 25th 73G that WestJet operates. The -200s are supposed to be phased out by '06 - replaced with -700s.

The airline currently holds something to the tune of 96 (!) options from Boeing, with 32 firm orders at present; 19 of which are unfilled right now. That'd bring WS' total -700 fleet to 44, once all orders are filled.

I don't know how WestJet would plan transborder expansion. I know that Clive Beddoe has mentioned that the company will do it in a short while - he mentioned early this year (or late last year) that WestJet's timetable for scheduled transborder service was "12 months." I don't know if the original plan was for WS' start of transborder service to coincide with the opening of new transborder gates at YYC (WestJet's main hub).... but those gates and the "D" concourse widening project seem to have fallen slightly behind schedule. The concourse was originally supposed to open in the fall of 2003.



"Talk to me, Goose..."
User currently offlineFLYYUL From Italy, joined Jun 2000, 4952 posts, RR: 51
Reply 9, posted (10 years 5 months 1 week 4 days 3 hours ago) and read 3414 times:

Before I start.. for the record;

In the last 3 years Air Canada has cut the following US routes:
USA:
From YYZ: RIC/CHS/GSP/GSO/AUS/GRR/SDF/AZO/SAN/SJC/SYR/ONT/SYR/AKR and some temporary cuts to MSY/MCI/STL, and significant cuts to DFW (Jazz CRJ), ATL (Jazz BAE146), PIT (Jazz Dh8), PHL (Jazz CRJ), EWR (A mix of Jazz and CRJ), HPN (down to Georgian), BDL (down to Georgian), CLE (down to JAZZ DH8). Other routes MSP, MKE, BNA, RDU, CLT, SEA, IAH are a mix bag of unprofitable, and marginal.

From YVR: LAS, PHX, ORD, DEN, DFW..AC cannot support year-round service to MIA (1 weekly), BOS (2 weekly), and IAD.

So when AC expects to unleash itself into the secondary markets in the USA, I need to call the bluff. AC has tried and failed in nearly 15 markets, while many others barely hang on. AC has tried to send everyone via YYZ and YVR (to a minor scale) within the context of an operational hub, which implies the system of connection banks.

AC has tried to imitate the other network carriers, where many of the above destinations are filled with business pax on 2-5 daily frequencies...


Mark





User currently offlineYyz717 From Canada, joined Sep 2001, 16228 posts, RR: 57
Reply 10, posted (10 years 5 months 1 week 4 days 3 hours ago) and read 3372 times:

What is refreshing, is that Air Canada will NOT be a low cost airline. It will remain a full service airline, with frequent flyer points, 2 class seating (on many routes), meals (at a cost on shorter routes), access to lounges, Star Alliance privileges, interlining and all the things that people actually do want in airline travel, but have shown lately that they do not want to pay an arm and a leg for.

Sounds like the same strategy they've had for the last 5 years, the one that landed them in bankruptcy in the first place.

Does ANYONE actually have confidence in ANYTHING Milton says or does anymore?



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineCodeshare From Poland, joined Sep 2002, 1854 posts, RR: 1
Reply 11, posted (10 years 5 months 1 week 4 days 3 hours ago) and read 3374 times:

Any word on a code-share to Warsaw from Toronto (or Montreal too) ?
As part of Star Alliance that's what LOT did with United, after ending the deal with AA.



How much A is there is Airliners Net ? 0 or nothing ?
User currently offlineFLYYUL From Italy, joined Jun 2000, 4952 posts, RR: 51
Reply 12, posted (10 years 5 months 1 week 4 days 2 hours ago) and read 3362 times:

WS wont expand to the USA for a little while as per an article but Clive himself in the Montreal Gazette dated a month ago.

WS doesnt have the advantage of network carriers. Only a few routes cna support point-to-point service, and most of them are all non-YYC route pairings.

And if WS starts service to the USA (to where?), it will have to pay for the PFI which is an escalating cost, that just might be too much to bear for WS.

Mark


User currently offlineYyz717 From Canada, joined Sep 2001, 16228 posts, RR: 57
Reply 13, posted (10 years 5 months 1 week 4 days 2 hours ago) and read 3352 times:

WS doesnt have the advantage of network carriers. Only a few routes cna support point-to-point service, and most of them are all non-YYC route pairings.

Well, that didn't help UA or AC much....they're both in bankruptcy. Most AC passengers to the US stop at the US gateway; they do not reconnect onto US domestic flights. The many US-Cda transborder routes are overwhelmingly O+D which fits very well into the WS world when WS expand into the US.

WS could add YYZ-EWR/MDW/MIA/FLL/LAX nonstops which would decimate AC yields and traffic. I can't wait.







Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineFLYYUL From Italy, joined Jun 2000, 4952 posts, RR: 51
Reply 14, posted (10 years 5 months 1 week 4 days 2 hours ago) and read 3328 times:

"WS could add YYZ-EWR/MDW/MIA/FLL/LAX nonstops which would decimate AC yields and traffic. I can't wait."

-The problem is that YYZ will probably be too expensive for WS to operate cheaply and profitably.... All hail the GTAA!!

Mark


User currently offlineYyz717 From Canada, joined Sep 2001, 16228 posts, RR: 57
Reply 15, posted (10 years 5 months 1 week 4 days 2 hours ago) and read 3302 times:

The problem is that YYZ will probably be too expensive for WS to operate cheaply and profitably.... All hail the GTAA!!

WS will always be a lower cost airline at YYZ than AC the GTAA fees aside. Even transborder routes from YHM will steal YYZ traffic from AC.

It's clear that AC is on the run from WS. The war will start on a new front when WS commences US routes.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineFLYYUL From Italy, joined Jun 2000, 4952 posts, RR: 51
Reply 16, posted (10 years 5 months 1 week 4 days 2 hours ago) and read 3293 times:

Perhaps.

But Air Canada will always have the feed advantage of UA network hubs, and hubs in Canada that can connect you internationally in terms of YYZ, YUL and YVR. It will always have preferrential airport slots, and the best frequencies..

Not sure WS wants a piece of the USA, they should stay away for now... Canada-USA is costly matter, so much so that has scared B6 from starting service to Canada (B6 was close on beginning YYZ/YUL-JFK this fall). The PFI is the biggest complaint right now, its simply too costly. Add in all the other security measures that must be paid for by airlines, which include the CATSA screeners (Canadian Air transportation security agency)..

Then when WS discovers that itll be serving the most EXPENSIVE airport in North America YYZ  Big thumbs up to EWR which is no.2 or 3... LOL I cant wait  Big grin

Mark


User currently offlineGoose From Canada, joined Aug 2003, 1840 posts, RR: 15
Reply 17, posted (10 years 5 months 1 week 4 days 2 hours ago) and read 3289 times:

YHM works too. WestJet's been pretty successful there....

And if WS starts service to the USA (to where?), it will have to pay for the PFI which is an escalating cost, that just might be too much to bear for WS.

... and the WS profitability bubble will go "pop," right? Well, considering that WestJet has been profitable now nearly from inception, I'd call your perception and opinion a folly.

WestJet has already proven a lot of people wrong - those who said they could never make an airline work out of YYC, in the midst of the CP-AC "war," those who said they'd never make it in Ontario or any other points east..... and so on. Doubtless they're working hard on figuring how to make a transborder operation work. If they go for it, they'll probably make at least one bad call and not see the returns they'd like to see - like with YAM and YSB service in Canada - but overall, they'll be successful. Doubly so, if they choose to partner with a US carrier. I know it's never been done.... but a LCC had not been attempted in Canada before WestJet.

WS has made themselves successful by making their business work, and being sensible when it comes to expansion. That won't change.

WS doesnt have the advantage of network carriers. Only a few routes cna support point-to-point service, and most of them are all non-YYC route pairings.

.... nearly 50% of WS' traffic through YYC are connecting pax to other destinations. It doesn't really matter where those folks originate.... as long as the flights out of YYC are full. As with many of the current charter operations to VRA or PVR, I can see WS operating YEG-YYC-? service which would be full, and draw upon YEG as well.



"Talk to me, Goose..."
User currently offlineOlympus69 From Canada, joined Jun 2002, 1737 posts, RR: 7
Reply 18, posted (10 years 5 months 1 week 4 days 1 hour ago) and read 3223 times:

Even transborder routes from YHM will steal YYZ traffic from AC.

Not unless YHM can get US Customs/Immigration pre-clearance. I don't know how much traffic they would need for that.



User currently offlineGoose From Canada, joined Aug 2003, 1840 posts, RR: 15
Reply 19, posted (10 years 5 months 1 week 4 days 1 hour ago) and read 3213 times:

Not unless YHM can get US Customs/Immigration pre-clearance. I don't know how much traffic they would need for that.

It doesn't really matter, I suppose. YLW does quite well with inbound and outbound flights to SEA on QX, and I don't believe they have US Customs pre-clear. It's not a pre-requisite for transborder routes.



"Talk to me, Goose..."
User currently offlineFLYYUL From Italy, joined Jun 2000, 4952 posts, RR: 51
Reply 20, posted (10 years 5 months 1 week 4 days 1 hour ago) and read 3215 times:

Goose,

Yes WestJet has taken advantage of the west,and have by NO means taking advantage of the East. YHM is still a tiny operation in relative terms.


"WS has made themselves successful by making their business work, and being sensible when it comes to expansion. That won't change."

-Yes and No. No because WS has exploited routes within Canada mostly out of the west where Canadian/Air Canada's presence was significantly reduced after the merger. The cost of operation in Canada is so much cheaper than American airports.

Operations on the Canada/US border become mroe complex that its just not so easy to assume that WS will walk in with staggering success.

"nearly 50% of WS' traffic through YYC are connecting pax to other destinations. It doesn't really matter where those folks originate.... as long as the flights out of YYC are full. As with many of the current charter operations to VRA or PVR, I can see WS operating YEG-YYC-? service which would be full, and draw upon YEG as well."

-Yes agreed. However, YYC still isnt a big draw for US connections, because YYC is so far out from most major economic centres of North America. Where are you gonna go from YYC, YLW? YXE?

Mark




User currently offlineGoose From Canada, joined Aug 2003, 1840 posts, RR: 15
Reply 21, posted (10 years 5 months 1 week 3 days 23 hours ago) and read 3116 times:

-Yes agreed. However, YYC still isnt a big draw for US connections, because YYC is so far out from most major economic centres of North America. Where are you gonna go from YYC, YLW? YXE?

Well, unless you consider the petroleum traffic (CP used to run the Black Gold route, YYC-IAH, with 100% of its business-class seats filled.... ah, the memories...), you're pretty much right - business conx in YYC aren't as big as they would be in YYZ, YVR or YUL.

But, when I worked AA flights out of YYC to DFW, they were often packed going in and out. With the problems in the industry and with AA in particular, though, I know that AA's yields in YYC have gone down. UA, though, has added more frequncies in the same stretch of time... most (if not all) of those to DEN. America West has added service to Calgary in that stretch of time as well. QX has added more frequencies as well (flying Q400s instead of F28s as they used to)....

YLW would most likely be a prime connecting flight for inbound folks from the United States. It was when CP was running around... folks would come in on AA from ORD or DFW to YYC, then connect onto YLW on CP or KI - it was the most popular outbound destination for interline pax, as I recall.

I'll admit, it's been a while... so I don't know if that's changed.... I somewhat doubt it, as YLW has always been very popular for CP and now, WS. But, judging by the fact that YLW has seen phenomenal growth since WestJet coming in is a testament to the fact that WS could see a good volume of folks connecting through to destinations such as YLW.

The fact that the Canadian dollar isn't as low as it once was might mean that YYC probably won't see the numbers of ski-vacationers it used to, this year.

There's pros and cons to everything. I'll agree that the transborder market would be a new fascet for WestJet that they don't have a lot of experience with before..... but the opportunity there is apparent; even you can admit that. It could cause some problems - but their prior track record and business decisions indicate that they'll most likely be successful, even if it's only in the West. They are WestJet, after all. Most of their traffic still flows in that direction.....



"Talk to me, Goose..."
User currently offlineBOEING747-700 From , joined Dec 1969, posts, RR:
Reply 22, posted (10 years 5 months 1 week 3 days 23 hours ago) and read 3104 times:

Why does this always seem to break out in a YYZ - YUL fight? I for one think that the airport who draws in the most business should be the dominant on in every factor.

User currently offlineFLYYUL From Italy, joined Jun 2000, 4952 posts, RR: 51
Reply 23, posted (10 years 5 months 1 week 3 days 23 hours ago) and read 3086 times:

Who is making this a YYZ-YUL fight?

There is absolutely no chatter about this.

Mark


User currently offlineBOEING747-700 From , joined Dec 1969, posts, RR:
Reply 24, posted (10 years 5 months 1 week 3 days 22 hours ago) and read 3032 times:

Argh your right Mark, I posted this reply in the wrong thread, I am a little high right now oops my bad.

25 Yyz717 : Operations on the Canada/US border become mroe complex that its just not so easy to assume that WS will walk in with staggering success. All WS has to
26 FLYYUL : "LAX, SFO, SEA, DEN, DFW, IAH, ORD, MSP, SLC, LAS, PHX....." Really? YUL connects about twice as much as that. Mark
27 Yyz717 : YUL connects to EWR, LGA, BOS, MIA, DTW, ORD, LAX, MSP, ATL on mainlines.
28 Planemaker : This just in: Air Canada Chooses Li As Equity Investor November 9, 2003 Air Canada has chosen a group led by Hong Kong-based businessman Victor TK Li
29 FLYYUL : Alright im not gonna get into a war with you ... this subject has been discussed to death. "YUL connects to EWR, LGA, BOS, MIA, DTW, ORD, LAX, MSP, AT
30 Captaingomes : I read this earlier today in another message board, and there seems to be a collective sigh of relief by Air Canada workers that Li was chosen.
31 Allee : Sorta off topic, but why is Air Canada getting rid of an A320? At YVR's Shell apron, a title-less and maple leaf-less A320 sits re-registered as N754U
32 Goose : Air Canada is losing a few airframes because their leaseholders don't want AC to be using them for revenue service, and not be getting paid for their
33 ChrisA330 : I believe AC still had some outstanding narrowbody orders pending delivery when they file for CCAA. With the new GECAS deal, they agreed to take deliv
34 Yyz717 : There are no SFO-YUL nonstops.
35 Post contains images FLYYUL : Yes there are Neil.. your wrong again. AC brought it back on 02Nov because its unprofitable.
36 Post contains images Goose : AC brought it back on 02Nov because its unprofitable. They reinitiated the route because it lost money in the first place? Sound business decision!
37 Post contains images FLYYUL : LOL.. Its one of YYZ717's ridiculous statements that he ends up being wrong again, time after time.... its just funny when you archive this stuff, and
38 Post contains images Yyz717 : Its one of YYZ717's ridiculous statements that he ends up being wrong again, time after time.... Grow up Mark. Anyway, YUL-SFO has been stopped and st
39 FLYYUL : It must be hard accepting your wrong, yet again. This thread started as a non-YUL vs YYZ thread, and has ended it up being that again... I wonder why?
40 Yyz717 : Mark, the YUL-YYZ "war" commenced with you in post #14. Stop the YYC/YYZ badmouthing and the YUL glossing. Otherwise I will respond. It's up to you.
41 FLYYUL : Respond all you want.. your wrong 99.99% of the time anyway, shall we consult the archives? post #14 had nothing wrong with it. It had no YUL vs YYZ i
42 ChallengerDan : Look, guys. YYZ is Canada's biggest airport, YUL is 3rd or fourth. Those are known facts. It's incredible how everytime, you two always end up in this
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