The attached press release by Air Canada today regarding their new AC Tango initiative.
Wednesday October 10, 2:42 pm Eastern Time
SOURCE: Air Canada
Air Canada Gets Costs Out With Tango; Reassigns Existing Capacity to Offer Unique, No-Frills, Value-Focussed Alternative to Full Service Mainline Network
MONTREAL, Oct. 10 /CNW/ - In the first of several initiatives to stimulate traffic in the post-September 11 environment, Air Canada today announced the launch of Tango by Air Canada, a separately branded service that will offer price-conscious consumers a no-frills alternative complementing the airline's full service operations. Tango will be operated using a fleet of 13 Airbus A320 aircraft on existing, high traffic mainline routes. These aircraft will be reassigned from Air Canada's mainline fleet in response to the changing marketplace and increased demand for no-frills/low fare travel. Tickets will be available for sale beginning October 11, 2001, with the first flight scheduled for November 1st.
The reassignment of existing capacity and resources to launch Tango falls within the airline's plan to achieve a dramatic seat cost reduction while reducing overall system capacity in the aftermath of September 11. Air Canada expects the new travel product, operated in parallel with existing operations, to attract both leisure and business travellers seeking an alternative choice for exceptional Air Canada value. Tango's basic service, pared-down from Air Canada's mainline full service offerings, will feature a unique "all extras are optional" pricing policy, including a menu selection of in-flight snacks and refreshments at reasonable prices. The all-economy cabin of 159 seats will provide a comfortable seat pitch of 32 inches matching Air Canada's industry- leading levels of comfort - up to three inches more than other domestic carriers.
"Prior to September 11, Air Canada had stated its intention, as part of the Air Canada Action Plan announced August 1, to move towards providing more low fare capacity in response to clearly changing consumer preferences and a rapidly slowing level of business travel," said Robert Milton, President and Chief Executive Officer. "In the post-September 11 world of depressed demand, a move in this direction is all the more necessary, as we need to aggressively promote all consumer incentives that encourage and stimulate travel.
"As a result, we are introducing Tango by Air Canada to stimulate the market, reduce costs and above all, to enable customers to tailor their ticket price to their own pocket book and tastes. Tango is targeted at those customers who, instead of a full service, mainline product, would like to buy simply a seat, and then add on, on a fee-basis, the extras that appeal to them, such as seat assignment, food and beverages, and audio-visual entertainment.
"This product will be particularly attractive to those consumers who not only place high value in paying only for what they wish to receive but also value Air Canada's brand reputation and high operational standards. Air Canada has had great success with the Rapidair branding experience, which clearly meets the needs of a targeted customer group with a differentiated product within the Air Canada main brand," added Mr. Milton.
"Tango is one of many initiatives that Air Canada has in the pipeline. We continue to plan for the launch of a Western Canada-based, short haul, low- fare airline that will be operated as a wholly-owned subsidiary and that will provide employment opportunities for some of our surplus staff at the mainline and regional carrier," concluded Mr. Milton.
To offer customers maximum convenience, reservations will be available on Tango's website starting October 11 at www.flytango.com, or toll free through dedicated Tango agents at 1-800-315-1390. All Tango tickets will be electronic; sales through travel agents will be commissionable. Cost savings, achieved through streamlined operations and simplified service offerings, will be passed on to customers in the form of a simplified fare structure featuring everyday low prices with minimum restrictions, a fee-based no refund policy and itineraries ticketed exclusively for Tango services - without the possibility of combining itineraries or tickets with Air Canada mainline flights. Tango customers will be eligible for Aeroplan benefits including accumulation and redemption of reward miles.
Tango will operate between eight of Canada's largest cities from coast to coast and three destinations in Florida. All domestic Canada routes will operate through Toronto, offering non-stop service to and from: Vancouver, Calgary, Edmonton, Winnipeg, Ottawa, Montreal and Halifax. In addition, Tango will offer non-stop service between Toronto and Fort Lauderdale, Orlando and Tampa; as well as non-stop service between Montreal and Fort Lauderdale and Orlando.
Editor's Note : High resolution downloadable images of the Tango logo
and the Tango aircraft livery are available at
TANGO BY AIR CANADA QUICK FACTS
Who: AIR CANADA has announced the introduction of a separately branded
--- service that will offer price conscious consumers a no-frills
alternative, complementing the airline's full service operations.
What: TANGO BY AIR CANADA - a casual and contemporary brand within-the-
---- Air Canada-brand, offering low fares and an alternative choice
for exceptional Air Canada value to complement the airline's full
service operations on existing, high traffic routes.
TANGO will offer a simple ticket structure with low fares that
appeal to the cost-conscious traveler, yet with a unique "all-
extras-are-optional" pricing policy for in-flight snacks and
services such as advance seat selection.
TANGO flights will be flown using Airbus 320 aircraft with a 159-
seat, ultra-efficient, all-economy seating configuration and
industry-leading 32" seat pitch, up to three inches more than
other domestic carriers.
TANGO'S lowest fares on most routes offer more than 80 percent
off full economy fares with no minimum stay or advance purchase
TANGO customers will be eligible for Aeroplan reward mile
redemption and accumulation.
Where: TANGO will fly non-stop between Toronto and major Canadian
----- cities: Vancouver, Calgary, Edmonton, Winnipeg, Ottawa, Montreal
and Halifax, as well as from Toronto to three U.S. destinations:
Fort Lauderdale, Orlando and Tampa and from Montreal to Fort
Lauderdale and Orlando.
When: TANGO flights will be available for sale starting Thursday,
---- October 11, both on the Internet at www.flytango.com or through
dedicated Tango reservations agents at 1-800-315-1390. All
tickets will be electronic.
TANGO'S first flights take off November 01, 2001.
Why: TANGO meets the market demand for low-fare travel, enabling
--- customers to tailor their ticket to their own pocketbook and
TANGO re-assigns existing assets at a lower seat cost without
additional manpower or expansion.
Q: WHY IS AIR CANADA SPENDING MONEY ON TANGO NOW?
A: Air Canada is launching Tango at minimal expense. A small number of the 13 A-320 aircraft were still in Canadian Airlines livery and were due to be painted; the majority were already in Air Canada livery, therefore requiring minimal re-painting with simple, clean graphics. Tango will be staffed with existing Air Canada employees and will feature low fares, electronic ticketing, a simple pricing structure and a unique "all extras are optional" policy.
Q: WILL TANGO DRAW TRAFFIC AWAY FROM AIR CANADA'S MAINLINE FLIGHTS ON THE
A: Tango is specifically designed to attract both leisure and business travelers who value the Air Canada brand and reputation for safety, but are seeking a low cost option with a unique "all extras are optional" pricing policy including a menu selection of in-flight snacks and refreshments at reasonable prices. Our research tells us that there is market demand for both Air Canada mainline and Tango flights. We fully expect to draw some traffic from mainline Air Canada flights, but Tango will also draw new customers and customers who are currently flying with other low cost airlines.
Air Canada is proceeding with this initiative, originally planned as part of the Air Canada Action Plan announced August 1, 2001, to stimulate the market, reduce costs and above all, to enable customers to tailor their ticket to their own pocket book and tastes.
In this period of depressed travel demand, we need to aggressively promote all consumer incentives that encourage and stimulate travel. This product will be particularly attractive to those consumers who not only place high value in paying only for what they wish to receive but also value Air Canada's reputation and high standards for safety and security - all the more critical in this post-September 11 environment.
Q: HOW DOES TANGO ENABLE AIR CANADA TO PRODUCE A CHEAPER SEAT?
A: This is accomplished in several ways:
- Using an ultra-efficient, full-economy class comfortable seating
configuration on latest-technology Airbus A-320 aircraft, similar to
the highly successful JetBlue product in the United States.
- Reducing the number of in-flight crew on board. Air Canada mainline
flights are crewed at a higher level than required by Transport
Canada due to in-flight product delivery requirements. TANGO'S pared-
down in-flight service will allow Air Canada to reduce the number of
flight attendants on board TANGO flights and yet still crew
according to Transport Canada regulations.
- Encouraging self-service technology; TANGO is designed so that
passengers may conveniently on the Internet at www.flytango.com ,
get an electronic ticket and check in using Express Check-in kiosks,
again minimizing cost and enabling lower fares to be offered.
Q: WHY IS AIR CANADA INTRODUCING THIS LOW COST BRAND EXTENSION NOW WHEN
THE U.S. CARRIERS ARE DOING THE OPPOSITE AND ELIMINATING THEIR LOW
COST CARRIERS OR SUB-BRANDS?
A: We have carefully studied similar initiatives in the United States and have learned some valuable lessons before launching TANGO. U.S-based low fare carriers typically offer short-haul, domestic-only flights. Tango offers short, medium and long haul flights both to domestic and transborder destinations. We see TANGO flights as offering the same low-cost high-value product in air travel as similar no-frills, value-focussed alternatives such as that offered by the highly successful carrier JetBlue in the U.S., and offered within the same family in the hotel environment, i.e. Fairfield Inns, Courtyard Hotels by Marriott in addition to the mainline Marriott hotel product.
Air Canada needs to offer a choice of products. The mainline carrier will not be all things to all customers.
Q: WHY IS AIR CANADA INTRODUCING A NEW BRAND AT THIS TIME?
A: We are launching this initiative, which was originally planned as part of the Air Canada Action Plan announced August 01, 2001, to stimulate the market, reduce costs and, above all, to enable customers to tailor their ticket to their own pocket book and tastes. In this period of low travel demand, Air Canada recognizes the need to aggressively promote all consumer incentives that encourage and stimulate travel, which is all the more critical in the post-September 11 environment.
Air Canada has experienced great success with the Rapidair branding experience, which clearly meets the needs of a targeted customer group with a differentiated product within the Air Canada main brand.
Q: SHOULD AIR CANADA BE USING TAXPAYER MONEY TO BE LAUNCHING A NEW
PRODUCT LIKE TANGO?
A: There is no taxpayer money being used to fund Tango or any other Air Canada initiatives. The federal government recently announced their intent to provide funding to cover airlines' costs of shutting down operations for three days as a result of the September 11 terrorist attacks and this government funding will be used only for that purpose. Government funding to date falls far short of the continuing financial impact of the September 11 events on Air Canada.
Q: IS TANGO BEING LAUNCHED AS A DEFENSIVE TACTIC TO PROTECT MARKET SHARE
AT A VERY DIFFICULT TIME IN THE INDUSTRY?
A: Tango is a strategy to reassign existing assets in response to the changing marketplace and increased demand for no-frills, low-fare travel. Consistent with Air Canada's Action Plan launched August 1, 2001, Tango is one of the necessary actions Air Canada will continue to take to stabilize operations and sustain the airline during this period of unprecedented crisis in the global airline industry. Air Canada has every intention of being fully competitive in this evolving and difficult environment for the industry.
Q: WHAT ARE THE SIMILARITIES AND DIFFERENCES BETWEEN TANGO AND AIR
CANADA'S OTHER LOW-FARE INITIATIVE TO BE ANNOUNCED AT A LATER DATE?
A: The intent of the two is similar. Consistent with a trend in the industry, and particularly in this period of economic downturn following September 11, customers are increasingly cost conscious. Air Canada is responding to what travelers want: fewer services in exchange for a lower fare.
Both initiatives respond to increasing demand for low fare travel, replace unprofitable flying, reduce seat costs without adding capacity or aircraft.
Air Canada's western-Canada-based low fare airline will be operated as a wholly owned subsidiary. Most importantly, it's focus will be short haul operations.
TANGO is an air travel service on short and long haul routes that complements Air Canada's mainline service and is staffed by Air Canada employees.
Q: WITH THE CURRENT SOFT ECONOMY, WHY LAUNCH ANOTHER BUSINESS VENTURE
A: In the post-September 11 environment, the need to stimulate the market is a more important part of the Air Canada business plan than ever before.
Both business and leisure travelers are increasingly cost-conscious. In response to the changing marketplace, Tango will meet customers' increased demand for low fare travel and replace unprofitable flying without adding routes, capacity or aircraft.
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I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.