March 7, 2001
Royal launches new service to west
Declares national airline status
Financial Post, with files from Reuters
Royal Airlines said yesterday it will begin offering flights from Toronto to Calgary and Edmonton, a move it says will make it a national airline.
"We announced we would have a national network by spring 2001 and on March 21 we are adding the two destinations we were missing, Calgary and Edmonton," said Michel Leblanc, chief executive of Royal.
"We cover every major point in Canada now from Vancouver to Halifax and this gives us national coverage for most key routes in Canada. The new flights, targeted at business travellers, will help provide connections to Ottawa, Montreal and Halifax.
Mr. Leblanc said Edmonton and Calgary will be key markets as Royal merges with Canada 3000. Royal Aviation Inc. and Canada 3000 Inc. announced the $84-million merger deal on Jan. 29.
Royal said it is the only discount airline offering daily flights between Edmonton and Toronto and Calgary and Toronto.
"[Air Canada] is using every competitive tool they can put to us down, but with diversification of markets, we can hold our own," said Mr. Leblanc.
Halifax-based CanJet Airlines has already taken Air Canada to the Competition Bureau over predatory pricing accusations. Air Canada said in February it was offering a new class of what it calls Econo Fares. The Competition Bureau has asked the Competition Tribunal, a panel that rules on anti-trust matters, to issue an order prohibiting Air Canada from pricing Eastern Canada fares below cost.
"The bureau believes Air Canada's pricing and capacity management would result in WestJet and CanJet abandoning these routes. It is concerned their exit will result in higher prices in the long term," the bureau said in a statement.
Air Canada said yesterday it will "vigorously challenge" the allegations.
However, when asked if the airline was losing money on its routes in Eastern Canada, Air Canada said it will not reveal that information.
After Air Canada took over Canadian Airlines, legislation was passed that gave the Competition Bureau the power to bar low fares if it felt Air Canada was using the discounts to force competitors out of business.
Mr. Leblanc said: "They were offering fares that were below cost, and they used some other tactics too, [such as] pressure on the travel agents."