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Air Canada Cancels Charlottetown To Toronto  
User currently offlineDFORCE1 From Canada, joined Jul 2005, 505 posts, RR: 0
Posted (8 years 9 months 6 days 12 hours ago) and read 4594 times:

http://www.theglobeandmail.com/servl...0050718/RPEI18/TPBusiness/Canadian

Was this a smart move on the part of the premier of PEI? Do you think WestJet will step up to maintain service during the fall/winter? Is Air Canada doing the right thing by pulling out and giving WestJet an opportunity to gain marketshare even despite that Air Canada believes the route in the winter is not viable?

27 replies: All unread, showing first 25:
 
User currently offlineAccargo From Canada, joined Sep 2004, 610 posts, RR: 8
Reply 1, posted (8 years 9 months 6 days 12 hours ago) and read 4561 times:

If the premier and the gov't want winter service to YYZ it will cost them. They set themselves up for this by throwing money out to get additional summer service. Now the airlines know that they can wait until the gov't ponies up some money to make sure the route is profitable. If WJ decides to try winter service it won't do it for free. The airlines are in business to make money, not provide money losing services to small burgs.

User currently offlineYyz717 From Canada, joined Sep 2001, 16228 posts, RR: 57
Reply 2, posted (8 years 9 months 6 days 11 hours ago) and read 4514 times:

AC is just being a sore loser. AC's decision to service YYG or not should be based primarily on the profit potential, or not. The WJ service might just grow the entire YYG market and enable AC to continue to make profits. To announce the pullout of YYG service ahead of knowing the profit impact of the PEI/WJ deal, AC just comes across as petulant and petty.

The sheer irony here is that AC has only ever been able to survive with government handouts itself for most of its existence. It's privatization led to bankruptcy when it had to face the open market. That AC should call a marketing deal betw PEI and WJ a subsidy, is both laughable and nauseating.

Grow up AC.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineHanginOut From Austria, joined May 2005, 550 posts, RR: 0
Reply 3, posted (8 years 9 months 6 days 8 hours ago) and read 4406 times:

Quoting Yyz717 (Reply 2):
The sheer irony here is that AC has only ever been able to survive with government handouts itself for most of its existence. It's privatization led to bankruptcy when it had to face the open market. That AC should call a marketing deal betw PEI and WJ a subsidy, is both laughable and nauseating.

If it look like a duck, walks like a duck and it quacks like a duck, then it must be a duck. The PEI deal with WJ is a subsidy plain and simple. The fact that AC is annoyed is understandable, as noted in the article, they use the profits from summer time to subsidise winter service. When Air Canada was government owned, then this would not have been such a big deal, but now that they are competing with other airlines in a dog eat dog environment they are not about to give the competition an unfair advantage.  irked 

It seems to me that PEI is acting as if AC is still government owned (well the way the Federal Government in Ottawa treats AC I'm not surprised). If it takes this action by AC to wake PEI up to the fact that AC is out to make a profit and not run unprofitable routes just because politicians want them to, then good for AC! I do agree with your sentiment though, I do think they should grow up - but it is the PEI and Federal Governments which need to grow up and leave AC alone. I'd like to have seen WJ's reaction if the roles were reversed and they were in this situation and what they would have done had PEI subsidised AC (somehow I think you would have seen the exact same thing happen).  hissyfit 

On a bit of a tangent, I really do believe that the feds should treat AC like any other company and stop treating it as if it was a Crown Corporation (if WestJet was hamstringed the way AC is by the feds, WJ would be in the streets protesting government interference). But because it is AC, people seem to think it is ok - nothing like trying to survive in the cutthroat aviation industry with one hand tied behind your back!  gnasher 

HanginOut



Dreaming of the day I can work for an airline
User currently offlineSebring From Canada, joined Jul 2004, 1663 posts, RR: 14
Reply 4, posted (8 years 9 months 6 days 7 hours ago) and read 4356 times:

Quoting Yyz717 (Reply 2):
AC is just being a sore loser. AC's decision to service YYG or not should be based primarily on the profit potential, or not. The WJ service might just grow the entire YYG market and enable AC to continue to make profits. To announce the pullout of YYG service ahead of knowing the profit impact of the PEI/WJ deal, AC just comes across as petulant and petty.

The sheer irony here is that AC has only ever been able to survive with government handouts itself for most of its existence. It's privatization led to bankruptcy when it had to face the open market. That AC should call a marketing deal betw PEI and WJ a subsidy, is both laughable and nauseating.

Grow up AC.

You're a laugh. You harangue Air Canada for doing money-losing flying and then when they actually defend market forces, you criticize them for it. The idea that WS is going to stimulate January and February vacation travel to that snow drift in Northumberland is laughable. Glad to see, however, that you are nauseous, and expect you will be positively barfing up your guts the day AC brings out its second quarter earnings.


User currently offlineAirbusCanada From Canada, joined Nov 2004, 312 posts, RR: 0
Reply 5, posted (8 years 9 months 6 days 7 hours ago) and read 4343 times:

Every story has a flip side. According to Toronto star, Gov of PEI claimed that AC received such advertising subsidies in the past. IF that is true and the WJ advertising subsidy is just an one time hand out and will not be repeated every year, I don’t' think it's unfair to Air Canada.

User currently offlineAccargo From Canada, joined Sep 2004, 610 posts, RR: 8
Reply 6, posted (8 years 9 months 6 days 7 hours ago) and read 4329 times:

Typical response from the usual suspect.


Just wait until the screaming starts from the premiers office when they find out how much WJ wants to fly a half empty acft into YYG in January and Febuary. WJ will be in the drivers seat, and good for them. AC chose to use it's acft on more profitable routes this winter, WJ will likely do the same unless the money is forthcoming.


User currently offlineHrhf1 From Canada, joined May 2005, 105 posts, RR: 1
Reply 7, posted (8 years 9 months 6 days 6 hours ago) and read 4304 times:

Once again another government is bungling its transportation policy. PEI giving subsidies to fly direct to YYZ in winter is laughable. If a route is not profitable, it should not be flow and taxpayer dollars should not be propping it up. The govt. of PEI will claim it's to stimulate tourist dollars flowing in the winter months, but the more likely reality is a specific group of frequent, and by PEI standards, influential constituents want to be able to fly to YYZ with less hassle to connect to winter vacations or other non-island pursuits. Not exactly a hospitable place in February.

OK, maybe that example is a little over the top, but how many small or remote areas will throw money at WJ or AC to service their areas? PEI is the size of a small city; Province or not I'm sure they have much more pressing matters on that island like infrastructure and health care for most islanders to be worrying about avoiding a connection.


User currently offlineAirbusfanYYZ From Canada, joined Oct 2002, 1431 posts, RR: 26
Reply 8, posted (8 years 9 months 6 days 6 hours ago) and read 4273 times:

I've flown the YYZ-YYG sector 4 times in the last three weeks on AC and not one of the flights has been full. It would stand to reason that if AC can't fill 50 seat CRJs in the peak of summer what kind of loads would exist in the winter?

Let's just see how WS goes about filling a 737 year-round.

Cheers,
Kaz



t.dot photography
User currently offlineCDNpax From Canada, joined Dec 2004, 45 posts, RR: 1
Reply 9, posted (8 years 9 months 6 days 5 hours ago) and read 4215 times:

I applaud AC! They aren't sore losers at all. They've just taken a golden opportunity to cut and run on an unprofitable route! There is no possible way that PEI has the population to support two major airlines competing for fares. Sometimes it's best to get out when you're ahead!! For all the vitriol that Yyz717 spews about Robert Milton, Montie Brewer and all AC management, I have to say that they have been making intelligent, timely decisions of late. Perhaps Milton decided to cancel the vote over drinks with Celine Dion!!!

User currently offlineDFORCE1 From Canada, joined Jul 2005, 505 posts, RR: 0
Reply 10, posted (8 years 9 months 6 days 4 hours ago) and read 4166 times:

I agree and fully support AC in their decision. AC is no longer a crown corporation and it does need to start putting its finances and yields at the top of its priority list. If this is the way the PEI government is going to behave, then AC should redeploy its aircraft on more profitable routes. If anyone should be getting subsidies, it should be Air Canada for having operated a non-profitable route during a very non-profitable season.

AC is just recovering from its financial turmoil whereas WJ's finances have traditionally been quite good. WJ is the last airline that needs subsidies. And why encourage an airline to come in and compete with another airline which is already struggling on a route? I applaud the decision to lure a US carrier but don't lure in a carrier to compete with another in a market than can clearly only support one major airline. At any rate, I know AC is making the right decision and best of luck to WJ - good luck filling those 150+ seat planes.


User currently offlineYyz717 From Canada, joined Sep 2001, 16228 posts, RR: 57
Reply 11, posted (8 years 9 months 6 days 2 hours ago) and read 4115 times:

Quoting HanginOut (Reply 3):
The fact that AC is annoyed is understandable, as noted in the article, they use the profits from summer time to subsidise winter service.

I'm sure that AC customers flying to YYG in the summer are thrilled that their fares are used to subsidize off-peak travel. AC should not be using profits from any route or period to subsidize any route.

Quoting Sebring (Reply 4):
You harangue Air Canada for doing money-losing flying and then when they actually defend market forces, you criticize them for it.

AC is upset that another airline got a subsidy in 2005 and they didn't, despite their decades of feeding at the public trough. Like I said, sour grapes.

Quoting Sebring (Reply 4):
Glad to see, however, that you are nauseous, and expect you will be positively barfing up your guts the day AC brings out its second quarter earnings.

Another operating loss huh? I'm not surprised.

Quoting Accargo (Reply 6):
Typical response from the usual suspect.

Translation: how dare anyone have a negative opinion of AC.

Quoting CDNpax (Reply 9):
For all the vitriol that Yyz717 spews about Robert Milton, Montie Brewer and all AC management, I have to say that they have been making intelligent, timely decisions of late.

And yet AC still can't generate a profit. You call it vitriol, I call it factual.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineYeggerman From Canada, joined Mar 2005, 143 posts, RR: 0
Reply 12, posted (8 years 9 months 6 days 2 hours ago) and read 4112 times:

Quoting DFORCE1 (Reply 10):
WJ - good luck filling those 150+ seat planes.

They do fill the -800 with around 150 of 166 seats pretty much everyday so far this summer, and when the summer is over and the loads go down, the route is pulled, and PEI has no service to YYZ from A/C or WS so really the big loser is not the airlines but the province.



"All great things must come to an end"
User currently offlineYyz717 From Canada, joined Sep 2001, 16228 posts, RR: 57
Reply 13, posted (8 years 9 months 6 days 2 hours ago) and read 4101 times:

Perhaps no airline can generate a profit on winter YYZ-YYG service. In which case, the route does not deserve winter service.

AC were fools for using summer profits to cover winter losses. No wonder they can't generate an operating profit if this route is any indication.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineAlespesl From Czech Republic, joined Jan 2004, 582 posts, RR: 2
Reply 14, posted (8 years 9 months 6 days ago) and read 4072 times:

I guess during winter it will be only YYG-YHZ service operated by DASH 8-100 or Beech 1900. This service will stay on its 3-4 daily frequency and people who wanna fly to YYZ will have to connect in YHZ.

Maybe that's the best solution.



Next Flight: Oct 10: PRG-MUC-KIV EMB 195/CRJ 900, Oct 12: KIV-MUC-PRG CRJ900/EMB 195 wiht Lufthansa
User currently offlineFLYYUL From Italy, joined Jun 2000, 4952 posts, RR: 51
Reply 15, posted (8 years 9 months 5 days 20 hours ago) and read 4022 times:

YUL-YYG is also in the mix

User currently offlineAlespesl From Czech Republic, joined Jan 2004, 582 posts, RR: 2
Reply 16, posted (8 years 9 months 5 days 19 hours ago) and read 3996 times:

Quoting FLYYUL (Reply 15):
YUL-YYG is also in the mix

Yes, I have forgotten about that one. YUL is operated 2x daily from YYG.



Next Flight: Oct 10: PRG-MUC-KIV EMB 195/CRJ 900, Oct 12: KIV-MUC-PRG CRJ900/EMB 195 wiht Lufthansa
User currently offlineDFORCE1 From Canada, joined Jul 2005, 505 posts, RR: 0
Reply 17, posted (8 years 9 months 5 days 14 hours ago) and read 3905 times:

http://www.theglobeandmail.com/servl...720/RWESTJET20/TPBusiness/Canadian

WestJet is apparently now considering the possibility of extending service past September with a Boeing 737-600 perhaps two to three times per week. I think that's a good move and makes economical sense. PEI doesn't need a daily service and a twice/three times weekly service should be more than adequate. I say Air Canada should forget about PEI and send the aircraft to a more profitable region. Let PEI be WestJet's problem.

I'm quite puzzled as to how PEI can support a twice daily service to YUL in the winter but not to YYZ, any explanations to this?

And don't be too harsh on AC management, they've done pretty darn good given the circumstances. I haven't seen any US airline pull the turn around that AC did. Furthermore, keep in mind there was a time when AC was forced to maintain routes/service to various communities even if they were money losers. Sometimes it's hard to break the status quo.

[Edited 2005-07-20 19:30:51]

User currently offlineCayMan From Canada, joined Aug 2003, 905 posts, RR: 9
Reply 18, posted (8 years 9 months 5 days 14 hours ago) and read 3876 times:

Quoting DFORCE1 (Reply 17):

I'm quite puzzled as to how PEI can support a twice daily service to YUL in the winter but not to YYZ, any explanations to this?

I don't think the cancellation of service to YYZ by AC is because the route couldn't be supported but more for the political/economic reasons discussed.

It does seem a difficult situation for any YYZ biz travelers (there are no doubt some) that will have to connect through YUL.

If AC was trying to send a message to PEI govt why wouldnt they also cut YUL service?


User currently offlineCDNpax From Canada, joined Dec 2004, 45 posts, RR: 1
Reply 19, posted (8 years 9 months 5 days 11 hours ago) and read 3821 times:

And yet AC still can't generate a profit. You call it vitriol, I call it factual

Suffice it to say that given the state of the NA airline market I doubt that ACE shareholders are particularly disappointed. Have a look at the likes of UA, AA, NWA et al and you may change your tune vis-a-vis the effectiveness of AC management. The fact is, Yyz717, that some of us have pried ourselves away from this forum long enough to actually fly places on AC and have noticed significant improvements in the product. AC is beginning to turn out a good product and is doing so at a profit. What more do you want? With the new fleet of EMB and Bombardier planes coming online now (with IFE!!) and a soon-to-be completed long-haul fleet renewal, AC is poised to provide even greater efficiencies and profits as the market continues to expand.


User currently offlineBO__einG From Canada, joined Apr 2000, 2769 posts, RR: 19
Reply 20, posted (8 years 9 months 5 days 5 hours ago) and read 3732 times:

What is the population of Charlottetown? 15,000 maybe 25,000?

Its a small city. They are lucky to even have an airport with such services to major hubs thousands of km away. In Alberta there is Lethbridge and Red Deer as well as fast growing Fort McMurray and those all have population lingering between 65,000-80,000.
I think Red Deer is the third largest followed by McMurray and Lethbridge.
Things those cities have in common is that they are much bigger than Charlottetown and they too don't have year round or even seasonal services to major out of province hubs like Vancouver. But they all have flights to YYC and YEG with the exception of Red Deer stuck in the middle of the two hubways.
I think Charlottetown is like Red Deer stuck in the middle of two or more major cities. Halifax, and Moncton are busier. Most likely flights will rather connect to those cities before going to Metros. What is unfortunate is that YYG is bears the label of capital city and its being treated this way. Its just like the cities in the Terrotories and Nunavut; a little big neglected to the rest of the nation.

Anyway I'm sure AC might change their mind and fix up with something decent with YYG such as a smaller than Jazz feeder if one exists there.



Expanding my global domination one spotter at a time..
User currently offlineSebwhite From , joined Dec 1969, posts, RR:
Reply 21, posted (8 years 9 months 4 days 18 hours ago) and read 3618 times:

The population of Charlottetown is 32,000 in the city and 60,000 in area. You have to remember, though, that Charlottetown serves an entire province -- of 140,000 people -- that is important to the Canadian tourism market.

User currently offlineYOW From , joined Dec 1969, posts, RR:
Reply 22, posted (8 years 9 months 4 days 17 hours ago) and read 3598 times:

Quoting DFORCE1 (Reply 17):
I'm quite puzzled as to how PEI can support a twice daily service to YUL in the winter but not to YYZ, any explanations to this?

There are a couple of primary reasons.

A) When AC added YUL, they cut the YYG-YHZ sked in half, thus just re-directing a lot of connecting traffic.

B) Related to 'A' a lot of YYG-YUL connecting traffic goes to YOW. From YYG, YUL is a more convenient connection point to YOW than YHZ and especially true for YYZ (why waste time backtracking?). Assuming no WS nonstop this winter, the YUL flights will of course generate a lot of YYZ connecting pax too.


User currently offlineAC_B777 From Canada, joined Aug 2000, 804 posts, RR: 13
Reply 23, posted (8 years 9 months 4 days 14 hours ago) and read 3535 times:

There are many cities in the country that have little or no air service.
I lived in Brandon, MB for the last year, and they are only served by one Metro a day operated by Perimeter Airways.
The population of that city is about 40,000-50,000, plus they have CFB Shilo 30 minutes away with a large population.
They were supposed to have a "major" airline start daily ops there last summer, but as of right now, nothing other than that lone Metro flies there.
WS used to fly into YBR a couple of years ago during the summer, but decided to pull out.
There is certainly enough demand there to support 2-4 DH8 100/300 flights per day or even a CRJ.
As for PEI, let AC pull out. We'll see how Westjet does there in the dead of winter. If they don't do good and decide to pull out for the winter, then the island should be left without service. Beggars can't be choosers!



In life, some days you are the bug..... some days you are the windshield!
User currently offlineDutchjet From Netherlands, joined Oct 2000, 7864 posts, RR: 57
Reply 24, posted (8 years 9 months 4 days 14 hours ago) and read 3517 times:

This is a rather interesting case study - airports offering all kinds of incentives to attract new airlines and new services and thereby putting existing carriers at a disadvantage. Charlottetown gambled and lost here.

I do not know enough about the specific situation at Charlottetown and the route to Toronto to make any specific comments as to whether AC is right or wrong by pulling its flight for the winter season. Was this a sensible business decision by AC or are they just trying to teach this town a lesson? I dont know; but if you look at the big picture, this can happen at any airport anywhere - airports compete for new service from the airlines and especially try to attract LCCs since, in general, new service to an airport by an LCC increases activity at the airport: low fares mean lots of additional pax and that results in more revenue at an airport - more eateries, more shops, more fees, more percentage rents, more action - all of which makes airport managers very happy. Sometimes we joke about it here at a.net, but it does seem that every airport is trying to attract JetBlue and/or Southwest, and frequently airports will offer a package of incentives to get the airline to chose a particular city. The issue is, how do existing carriers respond?

As much as airports want LCCs operating in and out of their facility, they also do not want existing carriers to get pissed off and leave or cut routes. Lets face it, if a legacy carrier provides service to a city or town, that carrier can usually get a pax to any other point worldwide with one or two connections on its own flights or flights of an alliance member. A LCC generally only provides service on higher demand routes and connection possibilities can be rather limited. There is a place for both types of carriers, but airports should be mindful that when offering incentives to new airlines, its not a good idea to upset your existing operators.


25 Goose : Brandon was Limited Addition service only, like WS' current Charlottetown route; they didn't pull out of YBR because they couldn't cut it, they pulle
26 Goose : Sebwhite answered part of this quite well in his reply right after your post. The other thing that must be considered is that PEI and Charlottetown a
27 Post contains links DFORCE1 : Ad suggests continued WestJet service Last updated Jul 27 2005 06:33 AM ADT CBC News - http://pei.cbc.ca/regional/servlet/V...ilename=pe-westjet-winte
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