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enilria
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Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 1:56 am

I hadn't realized this.

Canadians love to gripe about the high cost of air travel in this country, and no wonder: Canada is the only major air market in the world without an ultra-low-cost airline.

As the founders of Jetsgo, Roots Air, Greyhound Air and many other failed carriers can attest, Canada is a notoriously difficult place to start an airline for many reasons, including its sparse population, high taxes and fees, and restrictions on foreign ownership.

There is no low-cost or ultra-low-cost airline in Canada, zero, none

It’s the latter that’s keeping one of the world’s most influential investors in low-cost airlines away from Canada, even though he believes it’s a prime market for an ultra-low-cost carrier (ULCC).

Bill Franke, co-founder and managing partner of Indigo Partners LLC, said Canada’s limits on foreign ownership are a “turnoff” and he wouldn’t consider investing here until those restrictions are eased.


http://business.financialpost.com/news/ ... -in-canada
 
YLWbased
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 2:17 am

Say hi to Newleaf, grabs popcorn and see how long they'll last.

YLWbased
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enilria
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 2:31 am

I feel you on that. But I can hope. LCCs and ULCCs thrive in poor economic times traditionally, though.
 
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piedmontf284000
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 2:43 am

Interesting. Just curious, are you speaking directly about ULCC within Canada or trans border as well? Do you consider Porter to at least be LCC?
 
AirbusA322
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 3:06 am

piedmontf284000 wrote:
Interesting. Just curious, are you speaking directly about ULCC within Canada or trans border as well? Do you consider Porter to at least be LCC?


No I wouldn't consider Porter a LCC. This is all within Canada.

Air Canada should have done what Qantas did with Jetstar or Singapore did with Tiger 10 years ago. New offshoot, completely seperate to mainline, fleet of new aircraft. Keeping the offshoot completely seperate is part of Jetstar's success, does not get involved in mainline politics!

It's such a missed opportunity. The upcoming A321 would be an absolute winner for medium haul from Canada.
 
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admanager
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 3:15 am

Canada's limit of 25% maximum foreign ownership is the same as both the US and Mexico. What would be interesting is if these 3 nations set up a system similar to Europe, allowing domestic flights in any of the 3 countries by any airline registered in one of them.
I can't see it happening in this environment, but maybe one day.
 
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 3:15 am

AirbusA322 wrote:
piedmontf284000 wrote:
Interesting. Just curious, are you speaking directly about ULCC within Canada or trans border as well? Do you consider Porter to at least be LCC?


Air Canada should have done what Qantas did with Jetstar or Singapore did with Tiger 10 years ago. New offshoot, completely seperate to mainline, fleet of new aircraft. Keeping the offshoot completely seperate is part of Jetstar's success, does not get involved in mainline politics!



How is AC Rouge different to the Jetstar/Tigerair model?
I only turn left when boarding aircraft. Well, mostly. All right, sometimes. OH OKAY - rarely.
 
ClaudeB
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 4:18 am

@enilria, I agree, it is a big problem, but I think new peoples (Financial Post is one of them) are mentioning that problem across Canada’s newspaper it is a good starting point. I think the solution will come from Governments (Canada & USA) Commerce Development that is a problem to find a solution for them. It could be the same problem for the cost of cars, gas (Produce in Canada) is more expensive (+25%) in Canada!! Why?

@AirbussA322, Now Canada with Bombardier Aviation produce with fantastic CS 300 (superior to the A321. Air Canada will get a float of CS 300.
 
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 4:47 am

AirbusA322 wrote:
Air Canada should have done what Qantas did with Jetstar or Singapore did with Tiger 10 years ago. New offshoot, completely seperate to mainline, fleet of new aircraft. Keeping the offshoot completely seperate is part of Jetstar's success, does not get involved in mainline politics!


All that does is keep true LCC/ULCC out of the market. AC isn't interested in creating a competitor to its own mainline but in fending off competitors on select routes using Rouge.
 
YZF101
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 6:02 am

Although I'd love to have another choice or two, frankly I don't see the population base/economy to support an LCC or ULLC. Or another 'national' airline - maybe a regional, if there is support. Our geography is very large - true too that new aircraft are doing wonders at delivering far better economies than before, but would you really want to sit in a tiny aircraft for many hours? :(

Something could be made to run a Toronto, Ottawa, Montreal corridor (sounds like Via, huh?), but I'd think that would have a snowball's chance in Phoenix of succeeding.

We're doing fairly well as it is, considering. And adding outside airlines to our little mix I'm not thinking would do anyone any good. Westjet is still growing, and a few other airlines as well.
 
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thekorean
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 9:02 am

YZF101 wrote:
Although I'd love to have another choice or two, frankly I don't see the population base/economy to support an LCC or ULLC. Or another 'national' airline - maybe a regional, if there is support. Our geography is very large - true too that new aircraft are doing wonders at delivering far better economies than before, but would you really want to sit in a tiny aircraft for many hours? :(

Something could be made to run a Toronto, Ottawa, Montreal corridor (sounds like Via, huh?), but I'd think that would have a snowball's chance in Phoenix of succeeding.

We're doing fairly well as it is, considering. And adding outside airlines to our little mix I'm not thinking would do anyone any good. Westjet is still growing, and a few other airlines as well.


Canada is in excellent position to connect Europe/Asia to US/South America/Caribbeans. Think there is a room for one more.

As for ULCC, Canadians like to fly to warmer cities.
 
YZF101
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 9:56 am

Canada is in excellent position to connect Europe/Asia to US/South America/Caribbeans. Think there is a room for one more.

As for ULCC, Canadians like to fly to warmer cities.[/quote]


Oh, my apologies - I had my head stuck only within our borders, not looking outwards.

Well, there are Canadian airports within a 15 hour flight to pretty much anywhere in eastern Asia. Long haul, and probably wouldn't be getting slots at coveted airports (Haneda, Incheon, Hong Kong), but there would be enough others out there to enjoy some business. As to the south and east, I couldn't comment too much on.

Certainly right now with the lower fuel prices it would be an interesting go - unsure how it would look later, but to make money now might be easier and use those funds to move forward when oil climbs again.

Are there aircraft out there to make it a go? Thinking long/thin route metal, used, same type throughout. Certainly thinking there are....some long-in-the-tooth A 343, B767, 330, 777? Must be a deal out there somewhere. (dreaming I suppose...)

Anyway, yes, for international, perhaps there would be enough business to have a go - but I'd want to be careful on how deep into cattle class we'd want to fly....going Cebu Pacific's seating would be claustrophobic me thinks :)
 
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enilria
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 11:12 am

YZF101 wrote:
Although I'd love to have another choice or two, frankly I don't see the population base/economy to support an LCC or ULLC.

I disagree. The economy size is really the driver and the vast distances also make air travel more viable across all price points. a ULCC grows the market, so I would say the article makes a great point.
ClaudeB wrote:
@enilria, I agree, it is a big problem, but I think new peoples (Financial Post is one of them) are mentioning that problem across Canada’s newspaper it is a good starting point. I think the solution will come from Governments (Canada & USA) Commerce Development that is a problem to find a solution for them. It could be the same problem for the cost of cars, gas (Produce in Canada) is more expensive (+25%) in Canada!! Why?

@AirbussA322, Now Canada with Bombardier Aviation produce with fantastic CS 300 (superior to the A321. Air Canada will get a float of CS 300.

The high airport costs (from the federal tax burden on the airports) is a big part of the problem.
 
drgmobile
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 12:03 pm

AirbusA322 wrote:
piedmontf284000 wrote:
Interesting. Just curious, are you speaking directly about ULCC within Canada or trans border as well? Do you consider Porter to at least be LCC?


Air Canada should have done what Qantas did with Jetstar or Singapore did with Tiger 10 years ago. New offshoot, completely seperate to mainline, fleet of new aircraft. Keeping the offshoot completely seperate is part of Jetstar's success, does not get involved in mainline politics!

It's such a missed opportunity. The upcoming A321 would be an absolute winner for medium haul from Canada.


It did. It's called Air Canada Rouge and it operates leisure oriented low yield routes, including now within Canada.
 
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auroralives
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 12:29 pm

drgmobile wrote:
It did. It's called Air Canada Rouge and it operates leisure oriented low yield routes, including now within Canada.


Well... to the untrained eye, Rouge and AC are indecipherable from each other when booking. Both are through AC's website, and one has to watch carefully to make sure one is not being placed on a Rouge plane. There is no price difference.... but there is an enormous product difference.

Important to note LCC=Low Cost Carrier... i.e. the *operating" costs are lower... but that has nothing to do with the fare, which is identical to AC mainline.
 
maxudaskin
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 1:11 pm

admanager wrote:
Canada's limit of 25% maximum foreign ownership is the same as both the US and Mexico. What would be interesting is if these 3 nations set up a system similar to Europe, allowing domestic flights in any of the 3 countries by any airline registered in one of them.
I can't see it happening in this environment, but maybe one day.


I could have sworn that the limit was 49%.
 
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longhauler
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 1:29 pm

enilria wrote:
The high airport costs (from the federal tax burden on the airports) is a big part of the problem.

In my opinion, this is the biggest problem.

Let's say fixed costs on a YYZ-YVR flight, (taxes and airport fees) were $150, and the current average fare was $300. That leaves only $150 for the airline to adjust fares for competition. If a new ULCC were to go for half, so now $75, the total fare is still $225. Is that enough of a reduction to attract new business ... so far it hasn't been.

Much like the US, Canada has had a lot of carriers come and go ... they all had a different target ... and ALL were unsuccessful. From First Class service at Economy prices like Astoria and Wardair down to the bottom, JetsGo and Greyhound Air.
Just because I stopped arguing, doesn't mean I think you are right. It just means I gave up!
 
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 1:36 pm

longhauler wrote:
enilria wrote:
The high airport costs (from the federal tax burden on the airports) is a big part of the problem.

In my opinion, this is the biggest problem.

Let's say fixed costs on a YYZ-YVR flight, (taxes and airport fees) were $150, and the current average fare was $300. That leaves only $150 for the airline to adjust fares for competition. If a new ULCC were to go for half, so now $75, the total fare is still $225. Is that enough of a reduction to attract new business ... so far it hasn't been.

Much like the US, Canada has had a lot of carriers come and go ... they all had a different target ... and ALL were unsuccessful. From First Class service at Economy prices like Astoria and Wardair down to the bottom, JetsGo and Greyhound Air.

I believe YYZ is either the most expensive airport in the world per passenger or in the top 2 or 3.
 
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 1:44 pm

auroralives wrote:
Well... to the untrained eye, Rouge and AC are indecipherable from each other when booking. Both are through AC's website, and one has to watch carefully to make sure one is not being placed on a Rouge plane. There is no price difference.... but there is an enormous product difference.

Important to note LCC=Low Cost Carrier... i.e. the *operating" costs are lower... but that has nothing to do with the fare, which is identical to AC mainline.

This is a common misconception.

There is no such thing as a "mainline fare" or a "Rouge fare". The fare is whatever the market will bear, for any airline. That is why Rouge exists. There were many city pairs, (and thus fares) that could not support a mainline product. They were mostly vacation and liesure routes. I remember once, flying a YYZ-PUJ flight on a 120 seat A319 beside a 189 seat Sunwing B737 and noting, that there was no way AC could charge any more than Sunwing, so was losing money where Sunwing was not. Enter Rouge ... give the passengers what they want, a cheap seat.

As for "price difference", Rouge and Air Canada never fly the same route at the same time ... price comparison is impossible. At least within Air Canada. However, Air Canada is using Rouge, with its low unit cost, to put pressure on competition.

The only time a "choice" could be made between Air Canada and Rouge is using connections through Europe. YYZ-GLA on Rouge, or YYZ-LHR-GLA on Air Canada and BA. With Rouge's high 90s load factors and high repeat business, passengers have chosen with they want!
Just because I stopped arguing, doesn't mean I think you are right. It just means I gave up!
 
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 2:00 pm

maxudaskin wrote:
admanager wrote:
Canada's limit of 25% maximum foreign ownership is the same as both the US and Mexico. What would be interesting is if these 3 nations set up a system similar to Europe, allowing domestic flights in any of the 3 countries by any airline registered in one of them.
I can't see it happening in this environment, but maybe one day.


I could have sworn that the limit was 49%.


I'm pretty sure it is in the US.
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Steelhead
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 2:17 pm

We will see what happens if New Leaf is really starting at the end of this month. They are already throwing special prices left and right.
If nobody takes a chance to book and fly with them they will fail again (and Canadians will continue to fly WestJet and Air Canada)
 
jimbo737
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 3:36 pm

ULCC's in the US got traction in the market when the legacy's collectively had high costs and were utterly distracted by Chapter 11 proceedings and the aftermath.

Southwest and Air Tran were never particularly interested in the concept of "low frequency / several flights weekly", especially to secondary and tertiary markets.

That gave the ULCC's a near free pass to gain traction in the US marketplace.

In Canada, WS started in 1996 with stage length adjusted casm about 40% lower than either AC or CP. CP was bankrupt, couldn't make its Dec 15 1999 payroll and was snapped up by Air Canada. Air Canada has gone through one bankruptcy filing in 2003 and basically 2 other near banco experiences since then to grind down its cost structure to a point where there is now somewhere between 27 and 32% stage length adjusted casm difference between AC and WS. The most recent data shows AC at 16.6 cents an asm over an asl of 1,505 miles and WS at 12.52 cents over an asl of 938 miles. Both include interest, (otherwise the casm numbers are 16.08 vs 12.45 cents). There's no arguing that cost differential.

The challenge for a Canadian ULCC is to get it's stage length adjusted casm 30 to 40% below WS's to be able to stimulate the market, generate compensatory revenues and stick around. Unlike the US, Canada does not have the luxury of "secondary airports" outside YHM and YXX, and lest anyone forget, WJ has operated out of YXX since 1997 and YHM since 1999. WJ has forgotten more than anyone else knows about those two markets and how they work.

Secondary or tertiary markets in Canada are a fraction the size of the markets similarly described as such in the US. With one possible exception, there isn't a market in Canada over 30,000 people that hasn't been tapped by WJ, let alone by AC. A new entrant is not going to uncover a safe harbor with no jet service in Canada with a cachement area of a couple of hundred thousand people, as has been the case in the US. Indeed, most Americans would be very surprised at the levels of service tiny airports in Canada get, and often jet service at that.

A new entrant in Canada is not going to be able to get its unit costs so far under those of WS to be able to sustainably offer low fares. And that's why these attempts are doomed to failure. New Leaf will struggle to make it past mid September, if they even last that long. Have you ever heard of a ULCC successfully operating 156 seat B737-400's on an ACMI basis? Me neither.

As for the comment that there isn't the experience in Canada to pull this, off, that's nonsense. I can think of a half dozen or more people who were integral to the launch of WS that know precisely how to do it and know exactly how the markets work in Canada, (there are some key differences to the US) and could easily pull it off if they felt there was a viable opportunity.

As for the comment that Rouge isn't caniballizing the mainline's product, one has only to observe the precipitous decline in prasm over the past 24 months. Heathrow fares are dramatically down YOY as AC has to compete with itself to LGW. As fares drop, savvy customers are forgoing n/s flights from Canada to mainland Europe in lieu of one-stop connections over LGW and increasingly, LHR. It doesn't take many to cause a lot of problems.

Why pay $1,769 for YVR-FRA tomorrow when you can buy a YVR-LHR ticket on AC and a LHR-FRA ticket on BA for a total of $1,040, or less? The only reason AC has capitulated and started to offer one-way last minute pricing from Canada to US is WS, and the fall out from the competitive response to WS.

That's canibalization 101.

AC is aware of it, and that's probably why they no longer issue monthly traffic data and then issue quarterly results on a Friday before the biggest summer long weekend in Canada, knowing full well that everyone that matters has left their office on Bay Street in Toronto for two weeks summer holidays drinking Labatts on their dock in the Muskokas or Honey Harbor.

Out of sight, out of mind.
Last edited by jimbo737 on Tue Jul 19, 2016 3:47 pm, edited 1 time in total.
 
MIflyer12
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 3:44 pm

longhauler wrote:
Let's say fixed costs on a YYZ-YVR flight, (taxes and airport fees) were $150, and the current average fare was $300.


Please don't make up numbers and pretend it's analysis. It isn't. If you can cite a recognized and respectable source, great.
 
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longhauler
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Tue Jul 19, 2016 4:25 pm

MIflyer12 wrote:
longhauler wrote:
Let's say fixed costs on a YYZ-YVR flight, (taxes and airport fees) were $150, and the current average fare was $300.


Please don't make up numbers and pretend it's analysis. It isn't. If you can cite a recognized and respectable source, great.

I never claimed it was an "analysis", that's why I said "Let's say".
Get it? It was dumbed down so guys could understand the maths ... I'll try dumber, next time.

If you want real numbers, try this.

One way on AC over the next week ....
(Gasp, you are right, it's not $300, it's $293, oh the horror).

In that are taxes and fees of $66. During it's heyday, and before shutdown, Michel LeBlanc (JetsGo) announced it was costing him $100 per passenger to operate out of YYZ. You wont find any actual numbers, as they are not in the public domain. But that would be for landing fees and ground handling and knowing JetsGo would be the absolute cheapest one could achieve.

Do the maths. $293 total, less the taxes and fees and less YYZ ground handling costs leaves $127 for the airline to play with. If the ULCC decided to jump in with "half price", the total fare would still be $229.50.

So what I am saying, is that in a high tax/high fee environment, the ULCC airline still can not achieve much of a pricing edge over existing carriers. And would a fare advantage of $229.50 over $293 (for example) be enough to lure passengers away from existing carriers. For the last 40 years, since the "Freedom to Move" started in Canada, it has not.

I will say this again. This is not an analysis. It is simple maths on why, in my opinion, ULCCs do not stand much of a chance in Canada.
Just because I stopped arguing, doesn't mean I think you are right. It just means I gave up!
 
ElPistolero
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Wed Jul 20, 2016 2:34 am

Actually some numbers are available.

Consider YYZ (2013)

Gross revenue: $1,117,535,000
Total Pax (emplaned and deplaned): 35,261,531
Total Rent: $128,877,000
AIF: $25/$4 (connecting)

Assuming 50% connects (wild guess), average AIF is $14.5. If AIF is part of airport revenue, it contributes $511 million of the 1.117b. The remaining $600m is drawn from airlines ($600m/35 million pax = <$20/ pax). If AIF is not part of revenue, it's $34.5/pax.

Therefore it strikes me as highly unlikely that the cost of operating to YYZ comes close to $100 per pax for the airline (not counting taxes and charges paid directly by pax to the Govt in the $66). Perhaps $30-$40 at most, likely less.

In short, then, on a $293 fare, an LCC would have about $200 o/w to work with. Each way. Even a 15% lower cost would work out to a 10% saving - attractive to a family of 4. In theory an LCC or ULCC should be able to manage a deeper discount.

If price is all that matters, as is the mantra around here, why wouldn't it matter here? Note that Transport Canada estimates that a $1 decrease in airfare stimulates 125,000 new pax*. A $10 decrease in average fares would stimulate up to 1.25 million new pax. Throw in the 5 million using US airports... and there may be an entire new market to serve.

The issue, it seems, is access to capital. If a player with sufficient capital behind it comes in, it may well work. We all saw how jittery Bell et al got when Verizon started sniffing around. That was a similar issue. All a properly backed LCC has to do is survive the initial onslaught by the incumbents. For that they will need adequate financial backing.

All numbers taken from:
http://www.tc.gc.ca/eng/ctareview2014/CTAR_Vol2_EN.pdf
*pg 144 of above document.
 
ACDC8
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Wed Jul 20, 2016 4:40 am

Screw a lost cost or ultra low cost carrier, we need a low fare carrier ;)
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Wed Jul 20, 2016 4:51 am

piedmontf284000 wrote:
Interesting. Just curious, are you speaking directly about ULCC within Canada or trans border as well? Do you consider Porter to at least be LCC?



Porter targets business travelers. They have 34" seat pitch. No LCC or ULCC would have that generous a seat pith.
 
Viscount724
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Thu Jul 21, 2016 1:48 am

maxudaskin wrote:
admanager wrote:
Canada's limit of 25% maximum foreign ownership is the same as both the US and Mexico. What would be interesting is if these 3 nations set up a system similar to Europe, allowing domestic flights in any of the 3 countries by any airline registered in one of them.
I can't see it happening in this environment, but maybe one day.


I could have sworn that the limit was 49%.


No it's 25% for airliines.
https://www.otc-cta.gc.ca/eng/canadian-ownership
 
Dominion301
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Thu Jul 21, 2016 8:39 pm

jimbo737 wrote:
The challenge for a Canadian ULCC is to get it's stage length adjusted casm 30 to 40% below WS's to be able to stimulate the market, generate compensatory revenues and stick around. Unlike the US, Canada does not have the luxury of "secondary airports" outside YHM and YXX, and lest anyone forget, WJ has operated out of YXX since 1997 and YHM since 1999. WJ has forgotten more than anyone else knows about those two markets and how they work.

Secondary or tertiary markets in Canada are a fraction the size of the markets similarly described as such in the US. With one possible exception, there isn't a market in Canada over 30,000 people that hasn't been tapped by WJ, let alone by AC.


Well there are still a lot of cities in Canada of that size or larger that have scheduled airline service, but WS aren't serving...yet!
YSB, YAM, YYB, YTS, YGK, YBG, YVO, YUY, YSJ, YCD, YQL, YXH and YQF all fit that category. I'd imagine most of these cities will eventually see Encore service and I'd bet YSJ, YSB and YAM, all former WS 737 destinations, are at the top of this list.

I'd also imagine WS will eventually make YQG year-round by adding a couple of daily YQG-YYZ flights.
 
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Sat Jul 23, 2016 3:03 am

rbavfan wrote:
piedmontf284000 wrote:
Interesting. Just curious, are you speaking directly about ULCC within Canada or trans border as well? Do you consider Porter to at least be LCC?



Porter targets business travelers. They have 34" seat pitch. No LCC or ULCC would have that generous a seat pith.


Porter is 32" now, except for 1.5 rows (6 seats) of "premium" seats at the front that are still 34". I think that changed at least a year ago if not longer. The Porter website also shows 32" pitch.
 
infinit
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Sat Jul 23, 2016 5:17 am

Dont the Canadians have Air Canada to blame for that?

When Singapore Airlines operated 5th freedom flights to Vancouver and Toronto, I read about them complaining about protectionist measures imposed against them when they were doing well in Canada and AC complained to the Canadian government that Singapore Airlines was siphoning traffic away from AC.

Probably some truth in that since Canada's 2 largest cities have far fewer carriers serving them than say New York and San Francisco to the South.

What airline would be interested in a highly geographically segregated country like Canada with a protected airline like AC dominating it.
 
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DarkSnowyNight
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Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Sun Jul 24, 2016 1:36 pm

enilria wrote:
I feel you on that. But I can hope. LCCs and ULCCs thrive in poor economic times traditionally, though.



They seem to be thriving a lot better now.
"Ya Can't Win, Rocky! There's no Oxygen on Mars!"
"Yeah? That means there's no Oxygen for him Neither..."
 
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AC_B777
Posts: 761
Joined: Sat Aug 19, 2000 5:15 am

Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Sun Jul 24, 2016 2:25 pm

I find it funny how Canadians are always complaining about something, especially airfare! I routinely shop for airfares, and have been for the last 4-5 years. Even though I might not actually fly, I still shop. The one thing I have noticed is that airfares has dropped significantly over that time.
Five years ago, I took my family (Myself, wife and two children) on a trip to Florida in March. My son was under 2 years at the time so we didn't pay for a seat for him. The cost of the airfare was just under $2500 for THREE seats. This past winter, I could book the same destination (YYT-RSW) for the same time in March for the FOUR of us for less than $1700 return, taxes and all fees included! That's a difference of $800!! Tell me that airfare is still too expensive!
This past winter, National Airlines started flying SFB-YYT-SFB with a 757. The airfares were ridiculously cheap, something like $399 return, yet, I have been told by the ground handling company that works them that the largest load to date was about 70 pax!
WS flies YYT-MCO and does quite well from my understanding, but there is no meal, you have to pay for avod and earbuds, etc. National give their pax a nice meal and from what I've heard free drinks, yet, nobody flies them!
A few years back, I was watching an airline analysis on CBC. This airline expert was saying that it has never been more affordable to fly in the history of commercial aviation than now. He pointed out airfares back in the 60's, 70's and 80's and compared them with today and stated that generally, fares have not risen that much. Yet, the cost of a new, modern airliner has skyrocketed. (A RR Trent 1000 engine is approx $16.25 million while back when the DC-8 was being built, they cost approx $6 million for the plane. That's over $10 million just for one engine versus an entire airplane!). Then you add on what fuel costs today, and salaries, insurance, airport fees, taxes, etc etc etc. This airline expert said if you take all these costs and add them up, it should "ON AVERAGE cost between $3000-$5000 per person to fly a short to medium haul flight".
Yes, I understand that airplanes and engines are more fuel efficient than back then, but fuel also cost more now.
People say airfare is too expensive, yet, most families I know make close to or more than $100,000 CDN between them, but yet can't afford to buy an airline ticket. Maybe they should stay home??
In life, some days you are the bug..... some days you are the windshield!
 
cabochris
Posts: 57
Joined: Thu Dec 30, 2010 8:17 pm

Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Sun Jul 24, 2016 7:22 pm

infinit wrote:
Dont the Canadians have Air Canada to blame for that?

When Singapore Airlines operated 5th freedom flights to Vancouver and Toronto, I read about them complaining about protectionist measures imposed against them when they were doing well in Canada and AC complained to the Canadian government that Singapore Airlines was siphoning traffic away from AC.

Probably some truth in that since Canada's 2 largest cities have far fewer carriers serving them than say New York and San Francisco to the South.

What airline would be interested in a highly geographically segregated country like Canada with a protected airline like AC dominating it.


Non sense! AC did NOT complain...why would they... SQ and AC are founding STAR members and have a very wide scope code share agreement. SQ wanted to increase YVR to daily frequency and add YYZ from a seasonal operation to year round, and with AC code-share. But the Minster of Transport at the time rejected the Singapore Government request as there was no benefit seen to Canadian carries having more access to Singapore in return for the Canada SQ frequency increase request. So SQ said goodbye to Canada all together in early 2009 after the global economic shock of 2008 made the exit right. Most of SQ's YVR traffic came from DEL and ICN. KE with it's current daily operation of two 748 coming through YVR benefited the most from the SQ exit. Not AC.

ULCC cant make the numbers work operating in YYZ, YUL or YVR. History only shows..
 
ElPistolero
Posts: 1662
Joined: Thu Feb 23, 2012 12:44 am

Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Sun Jul 24, 2016 9:16 pm

cabochris wrote:
infinit wrote:
Dont the Canadians have Air Canada to blame for that?

When Singapore Airlines operated 5th freedom flights to Vancouver and Toronto, I read about them complaining about protectionist measures imposed against them when they were doing well in Canada and AC complained to the Canadian government that Singapore Airlines was siphoning traffic away from AC.

Probably some truth in that since Canada's 2 largest cities have far fewer carriers serving them than say New York and San Francisco to the South.

What airline would be interested in a highly geographically segregated country like Canada with a protected airline like AC dominating it.


Non sense! AC did NOT complain...why would they... SQ and AC are founding STAR members and have a very wide scope code share agreement. SQ wanted to increase YVR to daily frequency and add YYZ from a seasonal operation to year round, and with AC code-share. But the Minster of Transport at the time rejected the Singapore Government request as there was no benefit seen to Canadian carries having more access to Singapore in return for the Canada SQ frequency increase request. So SQ said goodbye to Canada all together in early 2009 after the global economic shock of 2008 made the exit right. Most of SQ's YVR traffic came from DEL and ICN. KE with it's current daily operation of two 748 coming through YVR benefited the most from the SQ exit. Not AC.

ULCC cant make the numbers work operating in YYZ, YUL or YVR. History only shows..


The bit about SQ is not 'nonsense'. He's referring to the 1991 incident when the Canadian government terminated the bilateral agreement because of Air Canada's complaint. It's the only example of a country cancelling an agreement with another country because of it's an airline's complaints that I've come across to date.

"In August, Singapore Airlines was notified by the Canadian government that its thrice-weekly service to Toronto via Amsterdam and Vienna would be canceled effective in mid-August of 1992.

Air Canada had petitioned the Canadian government to halt Singapore Airlines' transatlantic service on the grounds that the Singapore carrier was siphoning off potential Air Canada passengers, something SIA disputes."

http://www.nytimes.com/1991/11/23/busin ... ing_0.html

With regard to LCC's, AC's predatory actions in the early 2000s - and the Competition Bureau's subsequent investigation - are the reason Canada is one of the few countries with a methodology for assessing predatory pricing claims on airfares.
 
cabochris
Posts: 57
Joined: Thu Dec 30, 2010 8:17 pm

Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Sun Jul 24, 2016 10:21 pm

ElPistolero wrote:
cabochris wrote:
infinit wrote:
Dont the Canadians have Air Canada to blame for that?

The bit about SQ is not 'nonsense'. He's referring to the 1991 incident when the Canadian government terminated the bilateral agreement because of Air Canada's complaint. It's the only example of a country cancelling an agreement with another country because of it's an airline's complaints that I've come across to date.

"In August, Singapore Airlines was notified by the Canadian government that its thrice-weekly service to Toronto via Amsterdam and Vienna would be canceled effective in mid-August of 1992.

Air Canada had petitioned the Canadian government to halt Singapore Airlines' transatlantic service on the grounds that the Singapore carrier was siphoning off potential Air Canada passengers, something SIA disputes."

http://www.nytimes.com/1991/11/23/busin ... ing_0.html

With regard to LCC's, AC's predatory actions in the early 2000s - and the Competition Bureau's subsequent investigation - are the reason Canada is one of the few countries with a methodology for assessing predatory pricing claims on airfares.


Non sense is nonsense.. AC complained about SQ in way back 1991...AC had only been a private corp for only a few years and was still joined at the hip with Mulroney et all. That was back when Canadian and others were still operating and AC was battling them! I was referring to 2009, the actual exit of SQ from Canada. Star was created in 97 with SQ joining in 2000. AC did not compliant about SQ expansion or attempt to stop SQs frequency increase request in 2008. AC was not the reason SQ left. My point.

Westjet was a LCC when it started. It was. It is not today. ULCC wont work flying in and out and to and from YVR, YUL or YYZ. ULCC margins are thin to begin with, and its a hyper cost sensitive operation. Landing fees are currently not a friendly for ULCC.

The ULCC core problem, look at Azul, losing money now...an lots. Businesses are pressured to always grow, and with growth comes costs as Azul is now seeing.

A small ULCC operation with 10-15 E170 and/or E190s could work. Canada Jetlines is my bet to get off the ground and get some traction, but IMHO the 737 is the wrong choice of equipment.
 
ElPistolero
Posts: 1662
Joined: Thu Feb 23, 2012 12:44 am

Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Sun Jul 24, 2016 11:17 pm

cabochris wrote:
ElPistolero wrote:
cabochris wrote:


Non sense is nonsense.. AC complained about SQ in way back 1991...AC had only been a private corp for only a few years and was still joined at the hip with Mulroney et all. That was back when Canadian and others were still operating and AC was battling them! I was referring to 2009, the actual exit of SQ from Canada. Star was created in 97 with SQ joining in 2000. AC did not compliant about SQ expansion or attempt to stop SQs frequency increase request in 2008. AC was not the reason SQ left. My point.

Westjet was a LCC when it started. It was. It is not today. ULCC wont work flying in and out and to and from YVR, YUL or YYZ. ULCC margins are thin to begin with, and its a hyper cost sensitive operation. Landing fees are currently not a friendly for ULCC.

The ULCC core problem, look at Azul, losing money now...an lots. Businesses are pressured to always grow, and with growth comes costs as Azul is now seeing.

A small ULCC operation with 10-15 E170 and/or E190s could work. Canada Jetlines is my bet to get off the ground and get some traction, but IMHO the 737 is the wrong choice of equipment.


You're free to believe whatever you want, especially if you believe AC doesn't actively oppose frequency increase requests. In the interest of staying on topic I will refrain from commenting any further on SQ. I will, however, point out that both the government of Canada and BC government reports on air travel paint a picture of a malfunctioning market skewed towards the incumbents.

Within the LCC context, AC was found guilty of predatory pricing following a WS complaint in the early 2000s. With the new rules in place, the incumbents cant replicate AC's predatory methods of the early 2000s; therefore LCC/ULCC prospects are somewhat better today than they were in the early 2000s. If the foreign ownership level is increased - which is what this is really about - they might have a good chance. Unsurprisingly AC currently opposes the change; in the past, when it itself wanted foreign investment, it supported it.

At the end of the day, LCCs and ULCCs are as successful as, or outperforming full service carriers in virtually every major market in the world. That this has not been replicated in Canada is indicative of systemic problems in the Canadian market, not the LCC/ULCC model. The Government's own commissioned review, chaired by a former Minister of Transport, is very critical of the current state of air travel in Canada.

Which is to say that LCC's/ULCCs can succeed in Canada, but it will require across the board changes to the current approach. Guess who's going to oppose that the most?
 
Viscount724
Posts: 19316
Joined: Thu Oct 12, 2006 7:32 pm

Re: Canada: Largest Economy with No ULCC; Frontier Owner Says No Thanks

Mon Jul 25, 2016 2:44 am

ElPistolero wrote:

The bit about SQ is not 'nonsense'. He's referring to the 1991 incident when the Canadian government terminated the bilateral agreement because of Air Canada's complaint. It's the only example of a country cancelling an agreement with another country because of it's an airline's complaints that I've come across to date.



Not correct. Sometime in the early to mid-1960s, the New Zealand government rescinded the Canada-New Zealand bilateral and forced CP to suspend service to AKL after about 15 years of operation. NZ (then TEAL), owned by the New Zealand government of course, was planning to start their first service to North America (AKL-HNL-LAX) which I believe started in 1965 with DC-8s soon after the new AKL airport opened, and they didn't want any more competition than necessary so they evicted CP by cancelling the bilateral. It was another 20 years or so before a new Canada-New Zealand bilateral was agreed and CP reinstated service to AKL sometime in the 1980s.

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