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Zoedyn
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Air China, Air Canada sign joint venture deal

Wed Jun 06, 2018 9:38 am

English link: https://m.nasdaq.com/article/air-china- ... 0606-00138
Chinese link: http://news.ifeng.com/a/20180606/58601192_0.shtml

As per the reports in the links above, Air China and Air Canada signed a joint venture agreement on Wednesday in Beijing to bolster cooperation on flights between the two countries

AC said the joint venture would help it compete more "aggressively" in the Pacific market, esp when it is facing yield pressures on service to mainland China and Hong Kong

This is definitely a significant move for both AC and CA and has great implications for other carriers flying TPAC routes

What is your take on this?

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tphuang
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Re: Air China, Air Canada sign joint venture deal

Wed Jun 06, 2018 12:05 pm

Terrible for competition to have the two largest players in the North America to china market in jv.
 
whywhyzee
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Re: Air China, Air Canada sign joint venture deal

Wed Jun 06, 2018 12:22 pm

Considering the huge expansion of Chinese carriers to YVR (Asia/Pacific traffic is up 15% YoY) it makes sense for AC and CA to bolster their stake in the market. While yield is likely down as a result of the huge additions, it's not going to stay like that forever.

For Toronto, AC will likely be the biggest beneficiary, with their PEK and PVG flights benefiting from more feed, same goes for CA out of YUL.
 
sixtyseven
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Re: Air China, Air Canada sign joint venture deal

Wed Jun 06, 2018 1:37 pm

This is huge for AC. They’ve been wanting to ink this deal for years. Looking forward to seeing the details.
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longhauler
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Re: Air China, Air Canada sign joint venture deal

Wed Jun 06, 2018 1:47 pm

tphuang wrote:
Terrible for competition to have the two largest players in the North America to china market in jv.

I am not sure how "terrible" it is, but AC has been applying for new service to China for years and has been flatly denied by the Chinese ... while there are now 10 Chinese carriers flying to Canada!

Clearly, someone in Montreal has decided that the only way to beat them is to join them.
Just because I stopped arguing, doesn't mean I think you are right. It just means I gave up!
 
MapleLeaf789
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Re: Air China, Air Canada sign joint venture deal

Wed Jun 06, 2018 1:49 pm

It's a big move to long-term collaboration and access to China.

Will Air China have more flights to Canada as a result?

Part of Air Canada's strategy when ordering 787s was to access "secondary" cities in countries like China. Does this JV potentially give them a release from that, in that they can send larger aircraft to bigger cities and connect to the secondaries on to Air China? Thus, freeing up aircraft for expansion elsewhere?

Regardless, AC is not sleeping at the wheel.
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tphuang
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Re: Air China, Air Canada sign joint venture deal

Wed Jun 06, 2018 2:06 pm

longhauler wrote:
tphuang wrote:
Terrible for competition to have the two largest players in the North America to china market in jv.

I am not sure how "terrible" it is, but AC has been applying for new service to China for years and has been flatly denied by the Chinese ... while there are now 10 Chinese carriers flying to Canada!

Clearly, someone in Montreal has decided that the only way to beat them is to join them.


well, since chinese carriers have the one route, one carrier policy, I don't think AC is getting hurt by the volume of carriers. As for denied by Chinese, which amazing high yielding opportunities are they getting denied for?
 
HJM
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Re: Air China, Air Canada sign joint venture deal

Wed Jun 06, 2018 2:23 pm

Ben Smith did recently say that AC would also like to fly to China destinations other than PEK and PVG but that competing Chinese carriers did not have same business model as AC, that is, requiring a profitable operation. It will be interesting to see how this joint-venture will turn out.
 
NZ321
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Re: Air China, Air Canada sign joint venture deal

Wed Jun 06, 2018 3:01 pm

The details of this deal need scrutiny. How many routes will they open? Who will operate what? What does this mean for the competition? I am not convinced without the detail.
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Aircellist
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Re: Air China, Air Canada sign joint venture deal

Wed Jun 06, 2018 5:04 pm

Will there ever be more transit zone in Chinese airports?
"When I find out I was wrong, I change my mind. What do you do?" -attributed to John Maynard Keynes
 
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longhauler
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Re: Air China, Air Canada sign joint venture deal

Wed Jun 06, 2018 5:09 pm

tphuang wrote:
As for denied by Chinese, which amazing high yielding opportunities are they getting denied for?

I think the funniest example is when a few years ago, Air Canada applied for YYC-PEK and YUL-PEK and was denied. Then ... gosh gee whiz ... six months later, the Chinese announce their intentions to fly ... get this ... YYC-PEK and YUL-PEK.

I think the world knows one will never win against the Chinese. So ... best to join them as soon as possible.
Just because I stopped arguing, doesn't mean I think you are right. It just means I gave up!
 
tphuang
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Re: Air China, Air Canada sign joint venture deal

Wed Jun 06, 2018 5:29 pm

longhauler wrote:
tphuang wrote:
As for denied by Chinese, which amazing high yielding opportunities are they getting denied for?

I think the funniest example is when a few years ago, Air Canada applied for YYC-PEK and YUL-PEK and was denied. Then ... gosh gee whiz ... six months later, the Chinese announce their intentions to fly ... get this ... YYC-PEK and YUL-PEK.

I think the world knows one will never win against the Chinese. So ... best to join them as soon as possible.

So basically all low yielding routes that they are not really loosIng out on
 
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longhauler
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Re: Air China, Air Canada sign joint venture deal

Wed Jun 06, 2018 6:38 pm

tphuang wrote:
So basically all low yielding routes that they are not really losIng out on


Well, that's really my point. You started this discussion stating that competition would suffer, when as you yourself state, they are "low yielding", thus ... the best fares across the Pacific. You think that is going to change?

Of course not. AC with only 4 flights a day from Canada to China, combining with Air China who is under the "one carrier, one route" Chinese rule, doesn't sound like a big dent in the market.

What may change though is Air Canada feeding Air China on this end and v.v. on the other end. That can only be good for the traveller.
Just because I stopped arguing, doesn't mean I think you are right. It just means I gave up!
 
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SuperTwin
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Re: Air China, Air Canada sign joint venture deal

Wed Jun 06, 2018 7:53 pm

longhauler wrote:
tphuang wrote:
So basically all low yielding routes that they are not really losIng out on


Well, that's really my point. You started this discussion stating that competition would suffer, when as you yourself state, they are "low yielding", thus ... the best fares across the Pacific. You think that is going to change?

Of course not. AC with only 4 flights a day from Canada to China, combining with Air China who is under the "one carrier, one route" Chinese rule, doesn't sound like a big dent in the market.

What may change though is Air Canada feeding Air China on this end and v.v. on the other end. That can only be good for the traveller.


Don’t forget about AC011 YUL-PVG!
SuperTwin

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