CanadaEH From Canada, joined Jul 2003, 1341 posts, RR: 4 Posted (9 years 6 months 1 week 6 days 19 hours ago) and read 2467 times:
I pose this question: How do you see the airline industry in two years?
The players (in no particular order):
1. Air Canada (mainline, Zip, and Jazz)
2. Zoom
3. HMY
4. Westjet
5. Jetsgo
6. Air Transat
7. Skyservice
8. Canjet
9. Air North/Canadian North
10. All other regional carriers
How do you see the domestic market? International market? Charter market? Transborder market?
Do you think Air Canada will make a profit in the coming years?
Will adding LiveTV, adding legroom, and retiring the -200's help Westjet?
Will Westjet entering the transborder market hurt Air Canada?
Will HMY/Zoom make any noise on international routes?
Will adding smaller aircraft to Westjet/Jetsgo's fleet be good or bad?
Can Air Canada bring back passengers that have been lost to competition?
I don't need these questions to be answered, but just something for you to think about.
Yqfca From Canada, joined Jun 2001, 156 posts, RR: 0 Reply 1, posted (9 years 6 months 1 week 6 days 18 hours ago) and read 2408 times:
Air Canada will obviously go on forever but I don't see Zip survive.
Westjet will gain major revenue from charters at the expence of Skyservice and Air Transat in the North American market.
ZOOM HMY and Canjet will remain the same or very limited growth.
Goose From Canada, joined Aug 2003, 1840 posts, RR: 17 Reply 2, posted (9 years 6 months 1 week 6 days 18 hours ago) and read 2383 times:
-- Will adding LiveTV, adding legroom, and retiring the -200's help Westjet
--
The LiveTV might help bolster WestJet's standing and increase the load factor slightly - maybe single-digit percentages, but I doubt much more than that. But I think its primary value is more in retaining current customers by improving the existing product, in an increasingly competitive market. WestJet did a study late in 2002 amongst its customers, and found that many stated that they don't really care who they fly - be it JetsGo, Zip, or WestJet. The reason? Because WestJet "wasn't that different any more." WestJet is trying to make itself more 'different,' in an effort to foster customer loyalty and bring folks back.
WestJet still has a limited presence in some areas of its own country. Its eastern operations are still pretty much in their infancy, and many in Quebec have never heard of the airline. Part of the reason for this is because WestJet still relies primarily on word-of-mouth for new customers - Their actual advertising budget is somewhat limited. I can see the LiveTV and increased pitch helping to increase it's word-of-mouth proliferation, but I don't think you'll see an astronomical gain in terms of pax.
The retiring of the -200s will help WestJet's bottom line, despite the increased debt load from buying new -700s. The fuel savings from the newer aircraft do help.
-- Will Westjet entering the transborder market hurt Air Canada?
--
There is no low-cost competition on transborder routes. There's opportunity there for WestJet to cut into Air Canada's transborder traffic.... and Air Canada makes quite a bit of money on US-bound flights.
It could possibly hurt Mapleflot.... but I think the entrance of WestJet onto the transborder scene might generate new traffic which might not normally fly. We've seen this in areas of the country which WestJet has initiated service to.... that traffic is not so much taken from Air Canada, but new traffic is created because of the low fares or because of WestJet's profile.
-- Will adding smaller aircraft to Westjet/Jetsgo's fleet be good or bad?
--
I can't see WestJet adding another aircraft type. They've got a winning formula right now, and plenty of "low-hanging fruit" in terms of markets which can be served with their current aircraft type. The hassles of adding a second type, along with pilot training, crew pay scales, maintenance and so on.... might not be worth the trouble. The airline has an excellent working relationship with Boeing, and any need for a 'smaller' aircraft could probably be worked out with them - possibly the 737-600. That would negate the need to train crews on two types, buying parts from two suppliers, and so on.
Lymanm From Canada, joined Jan 2001, 1133 posts, RR: 1 Reply 4, posted (9 years 6 months 1 week 6 days 17 hours ago) and read 2304 times:
I think a major factor in any WJ expansion into the US will be the standing of the Canadian dollar. Opening a new international station is a lot of work, and a costly one. Additionally, virtually every operating cost out of an American airport would be in USD, inclduing employees, landings fees and fuel prices. With the CAD improving dramatically in the past year, the chance is certainly higher now, more than ever.
One element that would be relatively new for WJ would be having to contend with more than AC as competition on Canada-US routes (there is limited domestic competition beyond AC). With every US major (except WN) operating into Canada, I can't think of a single major Canada-US city pair that does not offer a US major AND AC as competition, with some cities featuring 2, even 3 US carriers plus AC.
NorthStarDC4M From Canada, joined Apr 2000, 2804 posts, RR: 40 Reply 5, posted (9 years 6 months 1 week 6 days 17 hours ago) and read 2310 times:
AIRLINERS.NET CREW CHAT OPERATOR
well AC will be about where it was 2 years ago... 747s gone, A346s in service on Trans-Atlantic services. New 100 seater entering service (leased).
Westjet will be about double its current size and will probably be withdrawing the last 732s. Regional partners possible.
Norterra/FirstAir/Air North no changes.
Zoom and HMY growing, Transat loosing share to them, possibly going bankrupt.
Skyservice moving operations to more Domestic/Carribean/Hawaii oriented, drop Europe, possibly becoming a partner carrier with european IT group (TUI or Cook) for trans-atlantic service not on SSV aircraft... A330s operated soley on wetlease to other airlines, A310 retuned as more 757s arrive. A319s dropped, A320/757-200 fleet by 2007.
Canjet... one of 2 things... operating no different that it is now OR buying newer aircraft (733/4/5, MD80 or F100) and expanding Florida operations, probably operating less in Atlantic Canada.
Jetsgo... somewhat bigger but not that much, possibly adding commuter partner out of YUL.
Zip all A319 or other 100 seater ops... no change in size much, possibly operating out of YYZ/YUL as well however.
Jazz... more CRJs (200s, maybe 700s), possibly some Q400s added. No major change in scope of operations, swapping routes with AC/Alliance as now.
Air Alliance, more 1900Ds added, more Quebec services from YUL from Jazz. some routes to US returned to Jazz as market recovers.
Central Mountain Air, no major changes.
Pacific Coastal Air... probably no changes or bankrupt, possibly operating as partner for US airline (Alaska or Delta).
Bearskin... northern services split off from Metroliner/PC-12 southern ops (inc Buttonville), Southern ops possibly operated as Air Canada franchise. Northern ops rearranged, possibly merged with Perimeter or CalmAir. most services switched to PC-12s. New Name possible for Southern Ops.
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
FraT From Germany, joined Sep 2003, 1101 posts, RR: 1 Reply 6, posted (9 years 6 months 1 week 6 days 16 hours ago) and read 2257 times:
Lymanm is right. Westjet won't have it that easy if they decide to go south of the border. The US LCC's will enter Canada at the same time. And employing staff in the US is a lot more costly. AC has UA staff in most destinations, so there won't be this advantage for WJ.
So my guess is that AC and WJ will have 90% market share and some of the smaller ones won't be there in 5 years.
Fallingeese From Canada, joined Apr 2001, 2097 posts, RR: 20 Reply 7, posted (9 years 6 months 1 week 6 days 16 hours ago) and read 2237 times:
It will be interesting...
If you guys get the chance, on the shelves any day now, will be the November-Demember issue of Wings. Take a look if you get the opertunity, I have a small photo feature in it, page 27 or thereabouts.
SkydrolBoy From Canada, joined Sep 2003, 341 posts, RR: 2 Reply 8, posted (9 years 6 months 1 week 6 days 15 hours ago) and read 2227 times:
For HMY:
They are adding four more 757-200's in March/April 2004, and from talking to people inside HMY they are planning to have 11 aircraft in service by September 2004. Also according to HMY"s website they are hiring 757 and 767 rated pilots, could this be a look into their future expansion plans.
Goose From Canada, joined Aug 2003, 1840 posts, RR: 17 Reply 9, posted (9 years 6 months 1 week 6 days 15 hours ago) and read 2190 times:
HMY's website recently (September) featured photos of its execs looking at aircraft parked down in the desert; specifically, a 747.... which looked to be from a Chinese airline.
Planemaker From Tuvalu, joined Aug 2003, 5488 posts, RR: 34 Reply 10, posted (9 years 6 months 1 week 6 days 15 hours ago) and read 2182 times:
I don't see how so many airlines flying transcon routes will survive. Recent low fares for YYZ-YVR: $99 to $149. Even AC was offering some seats at $149.
On two years I think that WestJet will have put in an order for smaller jets. In two years (or less) there just won't be any "low hanging fruit" for them to serve with the 737. The only way for them to continue their rate of growth (if AC doesn't go belly up and existing players survive) is by serving smaller markets that can't support the 737 (Thunderbay & Sudbury come to mind...) and/or increasing frequencies which can only happen with a smaller aircraft.
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
Goose From Canada, joined Aug 2003, 1840 posts, RR: 17 Reply 11, posted (9 years 6 months 1 week 6 days 15 hours ago) and read 2169 times:
Thunder Bay seems to make money for WS, and they've kept that route.... they actually added frequencies for it to Toronto recently, if I'm not mistaken. It might be Sault Ste. Marie you're thinking about.... they were cut at the same time as Sudbury, in early September.
I think the market is definately there for WS in Canada, with a sole aircraft type. They can concentrate on major centres (most of the country's population lives in large cities, such as YVR/YEG/YYC/YWG, and so on)... offering some trans-border service (with profitable city-pairs) and quite a bit of income from the "sun" charter destinations. WestJet had quite a bit of success offering Mexican charters during the summer this past year.....
Yyz717 From Canada, joined Sep 2001, 15990 posts, RR: 59 Reply 12, posted (9 years 6 months 1 week 6 days 15 hours ago) and read 2154 times:
A reasonable likelihood is the liquidation of AC in the next 2 years & its disappearance from the market. Their revenue continues to drop drastically and their cost structure remains too high. There is nothing to indicate that AC can turn around financially at this point.
Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
Yyz717 From Canada, joined Sep 2001, 15990 posts, RR: 59 Reply 14, posted (9 years 6 months 1 week 6 days 14 hours ago) and read 2138 times:
is AC's quarterly report even out yet?
Hmmm....not yet I think. This did release their monthly revenue stats. Oct 2003 revenue is down 10.9% from Oct 2002. I see this as good news, profit aside. The more AC shrinks ITO revenue, the less it can be a dominant bully in the future.
Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
Planemaker From Tuvalu, joined Aug 2003, 5488 posts, RR: 34 Reply 15, posted (9 years 6 months 1 week 6 days 14 hours ago) and read 2136 times:
Goose, you are right. I switched Thunderbay for Sault Ste. Marie. However, they are currently flying only one daily flight out of YQT.
They can concentrate on major centres (most of the country's population lives in large cities, such as YVR/YEG/YYC/YWG, and so on)...
The major centres are already well served and I don't see how, with current competition, they can increase their frequencies profitably. So, aside from the charter and trans-border markets you point out, where/how will they increase their domestic growth (assuming current competition is still around.)
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
Goose From Canada, joined Aug 2003, 1840 posts, RR: 17 Reply 16, posted (9 years 6 months 1 week 6 days 14 hours ago) and read 2102 times:
The major centres are already well served and I don't see how, with current competition, they can increase their frequencies profitably. So, aside from the charter and trans-border markets you point out, where/how will they increase their domestic growth (assuming current competition is still around.)
One can assume that the introduction of the IFE and, to a lesser degree, the increased seat pitch may draw more customers away from AC, and specifically Zip, and over to WestJet.
Also, WestJet has a tendancy to "produce" new customers and increase overall yields at bases just by its presence and introduction of competition - I'll use YLW and YQQ's phenomenal growth in the past few years as examples. Both of these markets were, prior to WestJet, small spokes on CP and AC's network, served only a few times daily by DHC8s. WestJet has gone in, and in the case of YLW, increased the amount of folks moving through that airport by over 300% since coming to town.
This is where WestJet has and can continue to make money - targetting people who wouldn't otherwise travel or, rather, take another mode of travel than booking an airline seat.
CanadaEH From Canada, joined Jul 2003, 1341 posts, RR: 4 Reply 17, posted (9 years 6 months 1 week 5 days 13 hours ago) and read 1994 times:
I agree with yyz.. I don't know if Air Canada can emerge from bankruptcy protection, and even if they do - will they be profitable in the short or long run? Robert Milton has said the focus will be on international routes, while "he doesn't care about the domestic market" and will allow AC for a 50% share domestically. Zip will grow, move over to a fleet of A319, and possibly be part of the smaller aircraft that Air Canada will order. I think that Air Canada will continue to try running out the competition (even though it hasn't worked for years).
Westjet will place an order for both smaller and larger aircraft. The fleet will consist of 737-600, 737-700, and 737-800. If a deal doesn't get worked out with Boeing, Westjet will choose the Embraer 190 over the -600. Westjet will start transborder flights and take away from some of Air Canada's transborder market share. (AC has had dropping transborder traffic for months now anyway). Westjet will continue to grow in the domestic market, gaining a 40%+ market share. FYI, Westjet is as big now as Canadian was domestically when they were taken over by AC.
I don't see Jetsgo surviving. I see Canjet staying put and not growing anymore than it has been.
I see HMY growing and starting flight to Asia. I see Zoom growing and adding even more international flights to Europe. I see Air Transat in trouble and I see Skyservice going bankrupt.
Fallingeese From Canada, joined Apr 2001, 2097 posts, RR: 20 Reply 18, posted (9 years 6 months 1 week 5 days 13 hours ago) and read 1976 times:
I'm very interested to see how Platinum Jet Air does. It is launching in February between YYC and YYZ. It is strictly targeting the business clientele and could take a bite out of Air Canada's profits.
$20000 for 20 one way flights between YYC-YYZ. So roughly $1000 one way, YYC-YYZ in first class accommodations.
Dash8King From Canada, joined Nov 2001, 2742 posts, RR: 12 Reply 19, posted (9 years 6 months 1 week 5 days 13 hours ago) and read 1947 times:
I hope that Westjet does not order the 736 hasn't this plane been proven to be un-economical just like every other shrink? The 736 costs roughly the same to operate as the 73G so what is the point in ordering it? I don't want them to go the Embraer route either, not until Jetblue can prove that it can be done profitably.
Planemaker From Tuvalu, joined Aug 2003, 5488 posts, RR: 34 Reply 21, posted (9 years 6 months 1 week 5 days 12 hours ago) and read 1902 times:
Robert Milton has said the focus will be on international routes, while "he doesn't care about the domestic market" and will allow AC for a 50% share domestically.
Yes, he may not care about the "discount" domestic market but he will about full Y and J class fliers. If AC orders the E170/190 family, they will be able to provide an excellent in-flight product while still maintaining flight frequencies that business fliers demand. But this is just pure speculation on my part.
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
CanadianNorth From Canada, joined Aug 2002, 3371 posts, RR: 10 Reply 23, posted (9 years 6 months 1 week 5 days 12 hours ago) and read 1866 times:
Air Canada... I dont think they would let it go down
WestJet... I see a decent airline that is off to a good start
Air North... not the worlds best, but they are slowly starting to get rolling
Canadian North... I see a nice airline with a promising future
First Air... I think they would probably stick around for a while
Jazz... its not that bad
ZIP... who knows, they might be a success, might be gone next week
Air Transat... good question
Skyservice... I think they have a chance
HMY... I think they are on the right track
Ckfred From United States of America, joined Apr 2001, 4658 posts, RR: 1 Reply 24, posted (9 years 6 months 1 week 5 days 10 hours ago) and read 1813 times:
I wonder if WestJet, if it continues to expand, might consider a code-share relationship with a U.S. carrier?
Starting a station across the border is very expensive, which is one of the reasons why Southwest hasn't entered the trans-border market.
If WestJet were to enter into a code-share, it would get even more domestic traffic, at the expense of AC.
I know that AA has cut back on trans-border flying, because it no longer has Canadian Airlines as a code-share partner to fly AA passengers beyond its Canadian destinations.
25 CanadaEH: Who know's, really. I think once one LCC starts transborder ops, more will follow. I'd like to see a code-share between carriers, but what do I know..
26 Airman99o: Hey there, I see Air Canada going to a more International structure. Jazz taking over most of the domestic routes, with Zip as the LCC. Air Transat???
27 Qb001: Basically, you guys all predict that the Canadian airline industry, for the next two years, will evolve. Interesting, I didn't think of that
28 CanadaEH: haha.. I just wanted to see what the other people had to say.. It seems like the industry is so Air Canada vs. Westjet right now that people seem to f
29 Dash8King: Well Westjet's loads aren't exactly poor, the October results came in at 72.8% those are pretty good results.
30 Goose: JetsGo is a private venture - with some pretty big wallets backing it - so its finances are a big question mark. Sustainability of their current low f
31 AC183: I suspect AC will end up ditching Zip. More RJ's at Jazz. Continuing realignment. WestJet I would expect to take a bit of a breather, use the new airc
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