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AC Jazz Eyes The 737-800  
User currently offlineMultimark From Canada, joined Jul 2006, 797 posts, RR: 0
Posted (5 years 3 weeks 3 days 6 hours ago) and read 12019 times:

Yes, you read correctly! But its for a new charter venture, not their AC flying:
http://www.cbc.ca/fp/story/2009/11/26/2272623.html

22 replies: All unread, jump to last
 
User currently offlineAirCanadaA330 From Canada, joined Aug 2008, 294 posts, RR: 0
Reply 1, posted (5 years 3 weeks 2 days 19 hours ago) and read 11377 times:

I would hope they might replace their older CRJ-200 and Dash 8 aircradt before they went off buying 737's for a new charter venture....


Cheers;
User currently offlinePnwtraveler From Canada, joined Jun 2007, 2296 posts, RR: 12
Reply 2, posted (5 years 3 weeks 2 days 18 hours ago) and read 11122 times:

I think the article is a bit widely speculative and who knows how close to the truth. The charter market is quite saturated with lift and some more consolodation probably will happen. However, this fellow seems to have a unique offer to bypass the travel companies. We will see if it is substantive enough to get off the ground and then actually attract enough customers. My first thought is why doesn't Jazz work out an arrangement to charter AC aircraft and crew rather than invest in its own aircraft with all the maintenance etc. costs.

User currently offlineLongHauler From Canada, joined Mar 2004, 5158 posts, RR: 43
Reply 3, posted (5 years 3 weeks 2 days 18 hours ago) and read 11112 times:

Jazz presently has among the highest seat mile costs in the business.

It will be interesting to see how they are able to compete against the most efficient and the lowest cost masters in the business like ... Air Transat, Skyservice, etc.

Especially as within the Capacity Purchase Agreement and employee scope clauses they must perform this venture outside of the Air Canada banner, and without Air Canada assistance.



Never gonna grow up, never gonna slow down .... Barefoot Blue Jean Night
User currently offlineJAGflyer From Canada, joined Aug 2004, 3582 posts, RR: 4
Reply 4, posted (5 years 3 weeks 2 days 16 hours ago) and read 10743 times:

Air Canada Jazz having their own charter outfit seems like something that wouldn't materialize. AC already has their 'Jetz' branding which caters to the larger group charter market. What AC Jazz ought to be looking at is a replacement aircraft for their aging fleet of Dash 8 100 and 300 series props. Maybe ERJ-130s or even Bombardier C-Series Jets?


Support the beer and soda can industry, recycle old airplanes!
User currently offlineA346Dude From Canada, joined Nov 2004, 1298 posts, RR: 7
Reply 5, posted (5 years 3 weeks 2 days 16 hours ago) and read 10719 times:



Quoting Pnwtraveler (Reply 2):
My first thought is why doesn't Jazz work out an arrangement to charter AC aircraft and crew rather than invest in its own aircraft with all the maintenance etc. costs.

Why would AC want to help someone compete against their own Vacations division? Also those maintenance etc. costs would certainly be included in any charter costs with AC (and likely marked up in the process), so I don't see any reason why Jazz would save money by using someone else's aircraft.



You know the gear is up and locked when it takes full throttle to taxi to the terminal.
User currently offlineMultimark From Canada, joined Jul 2006, 797 posts, RR: 0
Reply 6, posted (5 years 3 weeks 2 days 16 hours ago) and read 10662 times:



Quoting LongHauler (Reply 3):
Jazz presently has among the highest seat mile costs in the business.

How much of that is related to the small regional a/c they currently fly though? I've heard the starting pay for all employee groups is pretty low.


User currently offlineA346Dude From Canada, joined Nov 2004, 1298 posts, RR: 7
Reply 7, posted (5 years 3 weeks 2 days 15 hours ago) and read 10626 times:

Quoting JAGflyer (Reply 4):
What AC Jazz ought to be looking at is a replacement aircraft for their aging fleet of Dash 8 100 and 300 series props. Maybe ERJ-130s or even Bombardier C-Series Jets?

Dashes carry 37-50 pax. Replacing them with relatively inefficient ERJs or C-Series jets with over 100 seats doesn't make much sense. Q-400s would be a far more logical replacement and even then they are around twice the capacity of the 100's.

Also considering AC already flies the E-175 and E-190 any theoretical C-Series flying would almost certainly be done by AC mainline.

[Edited 2009-11-29 09:32:01]


You know the gear is up and locked when it takes full throttle to taxi to the terminal.
User currently offlineLongHauler From Canada, joined Mar 2004, 5158 posts, RR: 43
Reply 8, posted (5 years 3 weeks 2 days 11 hours ago) and read 8369 times:



Quoting Multimark (Reply 6):
How much of that is related to the small regional a/c they currently fly though?

Good point, except also on the list are all the regional carriers of the United States .. all with half the seat mile costs of Jazz.



Never gonna grow up, never gonna slow down .... Barefoot Blue Jean Night
User currently offlineHeathrow From United Kingdom, joined Sep 2005, 980 posts, RR: 0
Reply 9, posted (5 years 3 weeks 2 days 11 hours ago) and read 8245 times:

This seams like a large aircraft for QK. With AC vacations, I wonder why QK wants to participate in the charter scene as well. Along with AC's large airbus fleet, I just don't understand this.

User currently offlineMultimark From Canada, joined Jul 2006, 797 posts, RR: 0
Reply 10, posted (5 years 3 weeks 2 days 8 hours ago) and read 7246 times:



Quoting Heathrow (Reply 9):
This seams like a large aircraft for QK. With AC vacations, I wonder why QK wants to participate in the charter scene as well. Along with AC's large airbus fleet, I just don't understand this.

It does seem strange. I wonder if this is an opening for AC Vacations to move their business to Jazz, which must be at least cheaper than AC mainline. I'm assuming ACV is not locked into using AC?


User currently offlinePnwtraveler From Canada, joined Jun 2007, 2296 posts, RR: 12
Reply 11, posted (5 years 3 weeks 1 day 17 hours ago) and read 6347 times:



Quoting A346Dude (Reply 5):
Quoting Pnwtraveler (Reply 2):
My first thought is why doesn't Jazz work out an arrangement to charter AC aircraft and crew rather than invest in its own aircraft with all the maintenance etc. costs.

Why would AC want to help someone compete against their own Vacations division? Also those maintenance etc. costs would certainly be included in any charter costs with AC (and likely marked up in the process), so I don't see any reason why Jazz would save money by using someone else's aircraft.

Wouldn't be a long term solution but allow the concept to be proven without leasing or purchasing a longer term aircraft for its sole use. The penalties for an early end to aircraft contracts would be very expensive.


User currently offlineYOWza From Canada, joined Jul 2005, 4917 posts, RR: 15
Reply 12, posted (5 years 3 weeks 1 day 16 hours ago) and read 6227 times:

There were rumors a little while ago that Sunwing was up for sale. At the time the obvious suitor seemed to be WS as they do sun runs with the same type (amongst other reasons). Is there any possibility that this discussion is a prelude to QK stepping up to the plate to pick up Sunwing? Are they in any position to try such a maneuver? Am I getting ahead of myself  Wink

YOWza



12A whenever possible.
User currently offlineKrisYYZ From Canada, joined Nov 2004, 1593 posts, RR: 0
Reply 13, posted (5 years 3 weeks 1 day 16 hours ago) and read 6179 times:

This story seems to be grasping at straws. IMO, the chances of Jazz acquiring B737s is close to zero. Why would Jazz go for a totally new type, one that wouldn’t have any commonality with its current fleet and would represent a big increase in seats? Furthermore, why would Jazz get involved in a seasonal charter venture? As LongHauler said, they couldn’t use AC’s branding. There is no doubt that Jazz will have to look into replacing its older aircraft soon, but 737s dedicated to charter seems a far stretch. Even if Boeing gave AC a massive discount over the 787 delays, but I don’t even know if that would be possible since AC and Jazz are two separate entities. As many of you have said, Transat or Canjet would be much better suited for this sort of business venture.

KrisYYZ


User currently offlineCXH From Canada, joined Oct 2004, 147 posts, RR: 0
Reply 14, posted (5 years 3 weeks 1 day 10 hours ago) and read 5973 times:

Jazz operate 738s? It is possible, but there's lots of "ifs" here.

First: Robbie Goldberg's has been around along time, so I wouldn't dismiss it out of hand. But it will be interesting to see if his new venture actually gets off the ground. The Canadian 'sun' tour operator market is pretty crowded, so I'm not so sure.

Second: the article says Goldberg has been talking to other operators as well. I'm sure we could all speculate.

Thirdly: if Jazz gets the contract, I would assume it be a short winter season for the first year at least (4 ~ 6 months: Nov/Dec to March/April). So they would dry sub-lease 738s from European operators, just like CanJet and Sunwing Airlines do right now. CanJet, Skyservice and Sunwing practially double their fleet size in winter with aircraft brought over from Europe.

It would be a looooonnng time before I could foresee Jazz buying / leasing their own 738s.



I've seen the future, I can't afford it. - Martin Fry
User currently offlineYVRLTN From Canada, joined Oct 2006, 2548 posts, RR: 0
Reply 15, posted (5 years 3 weeks 1 day 6 hours ago) and read 5810 times:



Quoting CXH (Reply 14):
if Jazz gets the contract, I would assume it be a short winter season for the first year at least (4 ~ 6 months: Nov/Dec to March/April). So they would dry sub-lease 738s from European operators,

Think this is the most likely scenario if this is to happen. As a stand alone venture, why get 737's when AC have A32X?? OK, they are different companies, but Im sure they would prefer to have AC do the mx rather than out source it. Plus AC have spare capacity, the Skybus 319 at YVR for example has only just gone into the paint shop after being sat on the ramp for months.

Dont forget theres Enerjet in this market too. Things werent too hot for them for quite a while, havent heard anything about them recently (which is probably good news......)

Off topic, but I really think the new ATR -600's are the best bet for Jazz as a fleet replacement... but they should concentrate on staying profitable before going in for crazy ventures. The DH1's particularly are old, but they are pretty much unbreakable and with new interiors can go on for a long time yet.



Follow me on twitter for YVR movements @vernonYVR
User currently offlineMultimark From Canada, joined Jul 2006, 797 posts, RR: 0
Reply 16, posted (5 years 3 weeks 14 hours ago) and read 5466 times:



Quoting LongHauler (Reply 8):
Good point, except also on the list are all the regional carriers of the United States .. all with half the seat mile costs of Jazz

Interesting. Is the comparison list available on the Net?

I suspect Jazz is very anxious to diversify their revenue stream away from Air Canada. The opportunities are limited though.


User currently offlineYyz717 From Canada, joined Sep 2001, 16367 posts, RR: 56
Reply 17, posted (5 years 3 weeks 7 hours ago) and read 5221 times:



Quoting LongHauler (Reply 3):
Jazz presently has among the highest seat mile costs in the business.

Only because of the current Jazz fleet mix. If they were to add the 738, there is no reason why their unit costs on the 738 would not be competitive with Sunwing, Canjet etc.

Quoting LongHauler (Reply 3):
Especially as within the Capacity Purchase Agreement and employee scope clauses they must perform this venture outside of the Air Canada banner, and without Air Canada assistance.

The only successful airlines Canada has ever had are those that operate outside the AC banner and without AC assistance.  Smile Hence, this would be a slam dunk.

Quoting JAGflyer (Reply 4):
What AC Jazz ought to be looking at is a replacement aircraft for their aging fleet of Dash 8 100 and 300 series props.

If the new charter venture has a breakeven/profitable business plan with no capital outlays, Jazz fleet renewal of the Dash 8's etc is unaffected.

Quoting CXH (Reply 14):
Thirdly: if Jazz gets the contract, I would assume it be a short winter season for the first year at least (4 ~ 6 months: Nov/Dec to March/April).

That's the only charter model that would work for Canada. Peak in winter and slow down or shut down in summer.

Quoting Multimark (Reply 16):
I suspect Jazz is very anxious to diversify their revenue stream away from Air Canada. The opportunities are limited though.

Bingo. This is no doubt the primary reason for this. Any company whose revenue is sourced 99% from one customer should be diversifying quickly. Especially when that customer is veering from bankruptcy to ongoing massive losses, labour strife, declining market share as is the current reality with AC.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineAvt007 From Canada, joined Jul 2000, 2132 posts, RR: 5
Reply 18, posted (5 years 2 weeks 6 days 10 hours ago) and read 4938 times:

There's a couple key points to remember- Jazz does not want to get into the holiday business. They are looking at flying charter aircraft for a holiday company. Jazz would be paid for the flying just like they do for AC. They would not be taking the financial risk.

User currently offlineViscount724 From Switzerland, joined Oct 2006, 26005 posts, RR: 22
Reply 19, posted (5 years 2 weeks 6 days 7 hours ago) and read 4796 times:



Quoting Yyz717 (Reply 17):
Quoting Multimark (Reply 16):
I suspect Jazz is very anxious to diversify their revenue stream away from Air Canada. The opportunities are limited though.

Bingo. This is no doubt the primary reason for this. Any company whose revenue is sourced 99% from one customer should be diversifying quickly. Especially when that customer is veering from bankruptcy to ongoing massive losses, labour strife, declining market share as is the current reality with AC.

But if AC was to disappear, Jazz would be in a strong position to take over a large portion of their operations, much like LX (the former Swissair regional partner, Crossair) became the base for the current SWISS when Swissair went bankrupt and suspended service..


User currently offlineWhiteguy From Canada, joined Nov 2003, 838 posts, RR: 0
Reply 20, posted (5 years 2 weeks 5 days 10 hours ago) and read 4526 times:

No where in the article does it say Jazz is buying or leasing B738s. All it says is that they would be operating them for the charter company!

User currently offlineYULWinterSkies From United States of America, joined Jun 2005, 2185 posts, RR: 5
Reply 21, posted (5 years 2 weeks 5 days 10 hours ago) and read 4488 times:



Quoting LongHauler (Reply 8):
Good point, except also on the list are all the regional carriers of the United States .. all with half the seat mile costs of Jazz.

Jazz not only has small aircraft, but also long flights (the North...), and flights that may be quite empty a lot of the time, this being compensated by high fares. Figures change a lot in the US where the regionals increasingly fly at full capacity with low fares on routes which once were operated by mainline fleets. Also, they operate from one or a few hubs, unlike Jazz which is spread out all over the country.



When I doubt... go running!
User currently offlineLongHauler From Canada, joined Mar 2004, 5158 posts, RR: 43
Reply 22, posted (5 years 2 weeks 5 days 8 hours ago) and read 4424 times:



Quoting YULWinterSkies (Reply 21):
Jazz not only has small aircraft, but also long flights (the North...), and flights that may be quite empty a lot of the time, this being compensated by high fares. Figures change a lot in the US where the regionals increasingly fly at full capacity with low fares on routes which once were operated by mainline fleets. Also, they operate from one or a few hubs, unlike Jazz which is spread out all over the country.

I get what you are saying, but:

Seat mile costs are not related to passenger loads. Just to the number of seats on an aircraft.
Generally, aircraft capacities are the same north and south of the border, ie, 50 pax for a CL-65, 37 for DHC-8-100, etc.

Longer flights usually generate lower seat mile costs, not higher.
By nature of Jazz' long routes spread over longer distances, their seat mile costs should be less.

And seat mile costs are not at all related to fare.
(They should be ...  Smile ... but often they are not)



Never gonna grow up, never gonna slow down .... Barefoot Blue Jean Night
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