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BML87
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WestJet cutting capacity by 6%

Thu Aug 23, 2018 2:51 am

WestJet Airlines is cancelling service between Montreal and Quebec City and cutting back on flights across its network as it reduces capacity to meet consumer demand while also trying to reverse its first quarterly loss in 13 years.


https://montrealgazette.com/pmn/busines ... 2c0a637635

Route Cancellations:
Calgary-Mexico City
Vancouver-Mexico City
Halifax-Deer Lake
Montreal-Quebec

Frequency Reductions:
Calgary-Denver
Calgary-Edmonton
Calgary-Toronto
Calgary-Vancouver
Toronto-Los Angeles
Toronto-Vancouver
Toronto-Edmonton
Toronto-Fort McMurray
Toronto-Winnipeg
Toronto-Phoenix
Toronto-Aruba
Toronto-Belize
Toronto-Huatulco
Toronto-Liberia
Vancouver-Edmonton
Vancouver-Fort St. John
Vancouver-Cancun
Vancouver-Puerto Vallarta
Vancouver-Cabo San Lucas
Vancouver-Palm Springs
Edmonton-Ottawa
Edmonton-Phoenix
Halifax-St. John’s
Halifax-Sydney
Winnipeg-Palm Springs
 
flyguy84
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 3:05 am

Well you can’t cut your way to profitability. Ask United about that.... bad move.
SFO
 
whywhyzee
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 3:11 am

This headline is misleading. While they have cut on these markets, others have gained service as well. Net capacity is remaining roughly the same. They are adding an additional ~26 weekly flights on YYZ and almost 50 to YYC markets. This is more of a shift of capacity. I suggest ammending the heading. The stations seeing cuts are YUL and YVR by in large.
 
BML87
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 3:20 am

whywhyzee wrote:
This headline is misleading. While they have cut on these markets, others have gained service as well. Net capacity is remaining roughly the same. They are adding an additional ~26 weekly flights on YYZ and almost 50 to YYC markets. This is more of a shift of capacity. I suggest ammending the heading. The stations seeing cuts are YUL and YVR by in large.


Straight from the article:

"WestJet is “responsibly” reducing network capacity by almost six percentage points as it looks to reduce costs and improve profitability, spokeswoman Lauren Stewart said Wednesday."
 
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yowza
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 3:34 am

That's quite the the step down in YVR. I'm not sure I expected that. Does the entry of Swoop out of YXX factor into this? I do recall seeing YXX-YEG for $9 advertised somewhere but that aside I don't see much cannibalization happening.

I suspect AC will also take a little bit of capacity out of select markets but nowhere near 6% and with no route closures and probably no press release. :)
 
sixtyseven
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 3:39 am

Where’s Jimbo
Stand-by for new ATIS message......
 
Dominion301
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 3:56 am

These aren’t the only cuts. For example, 2 YHZ-Florida and YOW-Florida routes have also been cut. YUL-YQB on Encore never made much sense as the O&D on that route is max 100k per year given the 3 hour drive length from Montreal to Quebec City.

So points east of YYZ for WS that WS is weak in, most notably YUL and YOW, are made even weaker ...tough to be a credible alternative to AC east of YYZ when you don’t fly the likes of YOW-YEG & YOW-YVR nonstop on a year-round basis...clearly unviable compared with $9 base fare YEG-YXX swoop flights. :banghead:
 
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SuperTwin
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 7:14 am

sixtyseven wrote:
Where’s Jimbo


WS apologetics are his strong suit.
SuperTwin
 
chrisp390
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 7:38 am

MEX was cut very quickly, surprised the route did not work out well. AM cut YYC-MEX just as WS was entering so nobody in that route anymore.
 
ACDC8
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 8:09 am

whywhyzee wrote:
This headline is misleading. While they have cut on these markets, others have gained service as well. Net capacity is remaining roughly the same. They are adding an additional ~26 weekly flights on YYZ and almost 50 to YYC markets. This is more of a shift of capacity. I suggest ammending the heading. The stations seeing cuts are YUL and YVR by in large.

Where are these additional flights flying to?
A Grumpy German Is A Sauerkraut
 
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enilria
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 11:29 am

Welcome to the JV with Delta. They are the kings of capacity minimization. This is music to their ears whether they were explicitly involved or not.
 
tphuang
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 12:30 pm

hard for WS to compete in the big 3 airports when their cost is creeping up and AC dominates with so much international connections. Given the large minority population in these places, hard for locals to pick WS as their carrier of choice if they can't use them on VFR flights.
 
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longhauler
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 2:05 pm

This is Westjet entering the "real world" and as noted above, it is responsible capacity control. Air Canada does the same thing, it is just not as obvious. Your "A320" flight can be a 120, 146 or 190 seat aircraft. Your "777" flight can be 300, 400 or 450 seats. Etc. Westjet doesn't have the same flexibility and without the cost edge they used to enjoy, they must be more careful.

chrisp390 wrote:
MEX was cut very quickly, surprised the route did not work out well. AM cut YYC-MEX just as WS was entering so nobody in that route anymore.


With a WS hub and loyalty in YYC and an AM hub and lotalty in MEX and no competition ... one has to acknowledge that there is no traffic between the two if neither of these two airlines can make it work.
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: WestJet cutting capacity by 6%

Thu Aug 23, 2018 2:18 pm

it always amazes me when people talk about adding services from Calgary like it’s a large city. It’s a significant drop from Vancouver which itself is smaller than Toronto. A jv with delta will not change any of that.
 
whywhyzee
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 3:11 pm

ACDC8 wrote:
whywhyzee wrote:
This headline is misleading. While they have cut on these markets, others have gained service as well. Net capacity is remaining roughly the same. They are adding an additional ~26 weekly flights on YYZ and almost 50 to YYC markets. This is more of a shift of capacity. I suggest ammending the heading. The stations seeing cuts are YUL and YVR by in large.

Where are these additional flights flying to?


They were announced in a seperate press release. Link is attached.

http://westjet.mediaroom.com/2018-08-13 ... his-winter
 
ACDC8
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 5:28 pm

whywhyzee wrote:

They were announced in a seperate press release. Link is attached.

http://westjet.mediaroom.com/2018-08-13 ... his-winter

Cool, thanks! I was looking for one but couldn’t find it for some reason.
A Grumpy German Is A Sauerkraut
 
whywhyzee
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 5:43 pm

ACDC8 wrote:
whywhyzee wrote:

They were announced in a seperate press release. Link is attached.

http://westjet.mediaroom.com/2018-08-13 ... his-winter

Cool, thanks! I was looking for one but couldn’t find it for some reason.


No problem! It all works out to pretty much capacity parity network wide. Basicially what we are seeing is a slowing of growth, and refocusing on more international services. The first 787 routes will be announced in October, so that should provide some insight as to the future direction of the company.
 
SurfandSnow
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 5:52 pm

Wow, MEX sure doesn't seem to be the gold mine that AS, WN and WS thought it would be. UA recently reduced service at MEX, too. Hopefully things improve by the time the new MEX opens (if indeed it even will) in a couple years...

Then there's LAX-YYZ, which has just seen a frequency reduction by WS and AA's elimination of all nonstop service. I realize AC is a formidable competitor, but might it be time for AS to resume this route...or UA to give it a try in conjunction with their JV partner?
Flying in the middle seat of coach is much better than not flying at all!
 
whywhyzee
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 6:16 pm

SurfandSnow wrote:
Wow, MEX sure doesn't seem to be the gold mine that AS, WN and WS thought it would be. UA recently reduced service at MEX, too. Hopefully things improve by the time the new MEX opens (if indeed it even will) in a couple years...

Then there's LAX-YYZ, which has just seen a frequency reduction by WS and AA's elimination of all nonstop service. I realize AC is a formidable competitor, but might it be time for AS to resume this route...or UA to give it a try in conjunction with their JV partner?


AC is pulling back a little bit of capacity from MEX, downguaging a 767 flight to an A319 for the winter season as well.

As for LAX, it's a huge market, but for AA, they had limited partners, which would have made it quite a challenge. I definately think it needs a US carrier on the route, it's actually pretty crazy that it doesn't given that AC runs it ~6x daily with two widebodies.
 
ShinyAndChrome
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 6:25 pm

whywhyzee wrote:
SurfandSnow wrote:
Wow, MEX sure doesn't seem to be the gold mine that AS, WN and WS thought it would be. UA recently reduced service at MEX, too. Hopefully things improve by the time the new MEX opens (if indeed it even will) in a couple years...

Then there's LAX-YYZ, which has just seen a frequency reduction by WS and AA's elimination of all nonstop service. I realize AC is a formidable competitor, but might it be time for AS to resume this route...or UA to give it a try in conjunction with their JV partner?


AC is pulling back a little bit of capacity from MEX, downguaging a 767 flight to an A319 for the winter season as well.

As for LAX, it's a huge market, but for AA, they had limited partners, which would have made it quite a challenge. I definately think it needs a US carrier on the route, it's actually pretty crazy that it doesn't given that AC runs it ~6x daily with two widebodies.


AC likely flies a crapton of connecting traffic to eastern Canada/trans-Atlantic on that flight. Aside from UA, the US3 would essentially be stuck with just local traffic and some connections to Hawaii/Australasia on the LAX end.
 
hiflyeras
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 6:34 pm

With the price of fuel getting high, I think you'll see more announcements from all airlines regarding the cutting of marginal routes. Any money losers will be axed and even those that are marginally profitable are probably being looked at.
 
Noise
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 6:52 pm

tphuang wrote:
it always amazes me when people talk about adding services from Calgary like it’s a large city. It’s a significant drop from Vancouver which itself is smaller than Toronto. A jv with delta will not change any of that.


DING DING DING!!! We have a winner!

The pre-2015 Oil Boom propped up Calgary and allowed it to punch above its weight.
 
jimbo737
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 7:39 pm

[photoid][/photoid]

A hefty chunk of this is the usual seasonal sched change with summer east - west flying changing to winter north - south flying. This has been going on for 15 years or so, like clock work. It'll change back in late April / early May.

Here's a reality check: AC dropped from 31B asms in 3Q 2017 to 24.1b asms in 4Q 2017, a 22.1% seasonal drop, which didn't make the news. WJ's seasonal drop from 3Q to 4Q 2017 was from 8.07b asm's to 7.66b asms, just 5.2%.

Put it another way: AC dropped the equivalent of 85% of WS's ENTIRE Summer 2017 ASM production from 3Q 2017 to 4Q 2017. That's a lot of parked aircraft and "cancelled" routes that didn't make the news.

Recall that WS's margins in 4Q 2017 were double those of AC's, who at 1.4% when interest payments are included, (compared to an industry weighted average of 7.45%), were the lowest in North America by a country mile.

All of a sudden, WS's seasonal reductions, together with a culling of a few dogs, doesn't look quite as interesting as the screaming headlines suggest, eh?

I don't see any aircraft being parked. That's likely going to make Flair and other's lives fairly miserable. esp with WS's significantly lower cost base across all platforms. . Stay tuned.

The Mexico City flying was pretty aggressive and out of character for a WS market launch but it may have served a purpose.

Delta is easily the best US carrier when it comes to adjusting capacity. Anyone who listened to a recent conference call Raymond James in NYC hosted with Delta recognizes that Delta, (and to a lesser extent AA and UAL) have definitely moved off the AC "if they fly to Zimbabwe, then we'll fly to Zimbabwe and match all fares" strategy, with the results clearly showing the benefits of the evolution of thinking. And unlike AC, the US carriers haven't designed their airline to maximize profits on "Easter Sunday".

Check out the thread on AA's recent sched changes that get rid of some chronic under performers.

You'll see virtually everyone else doing the same in the weeks to come as the reality of a couple years organic inflation together with oil hovering in the low $70 bbl range starts to make a lot of the willy nilly expansion that occurred from 2014-2017 look not quite as clever as some airline execs might want you to believe.
 
sixtyseven
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 8:35 pm

jimbo737 wrote:
[photoid][/photoid]

A hefty chunk of this is the usual seasonal sched change with summer east - west flying changing to winter north - south flying. This has been going on for 15 years or so, like clock work. It'll change back in late April / early May.

Here's a reality check: AC dropped from 31B asms in 3Q 2017 to 24.1b asms in 4Q 2017, a 22.1% seasonal drop, which didn't make the news. WJ's seasonal drop from 3Q to 4Q 2017 was from 8.07b asm's to 7.66b asms, just 5.2%.

Put it another way: AC dropped the equivalent of 85% of WS's ENTIRE Summer 2017 ASM production from 3Q 2017 to 4Q 2017. That's a lot of parked aircraft and "cancelled" routes that didn't make the news.

Recall that WS's margins in 4Q 2017 were double those of AC's, who at 1.4% when interest payments are included, (compared to an industry weighted average of 7.45%), were the lowest in North America by a country mile.

All of a sudden, WS's seasonal reductions, together with a culling of a few dogs, doesn't look quite as interesting as the screaming headlines suggest, eh?

I don't see any aircraft being parked. That's likely going to make Flair and other's lives fairly miserable. esp with WS's significantly lower cost base across all platforms. . Stay tuned.

The Mexico City flying was pretty aggressive and out of character for a WS market launch but it may have served a purpose.

Delta is easily the best US carrier when it comes to adjusting capacity. Anyone who listened to a recent conference call Raymond James in NYC hosted with Delta recognizes that Delta, (and to a lesser extent AA and UAL) have definitely moved off the AC "if they fly to Zimbabwe, then we'll fly to Zimbabwe and match all fares" strategy, with the results clearly showing the benefits of the evolution of thinking. And unlike AC, the US carriers haven't designed their airline to maximize profits on "Easter Sunday".

Check out the thread on AA's recent sched changes that get rid of some chronic under performers.

You'll see virtually everyone else doing the same in the weeks to come as the reality of a couple years organic inflation together with oil hovering in the low $70 bbl range starts to make a lot of the willy nilly expansion that occurred from 2014-2017 look not quite as clever as some airline execs might want you to believe.


“Nothing to see here folks..... move along....”

Just like their share price. Moving along into the sh&tter. Which really sucks for all those employees that don’t have pensions...

Union drives. Widebody orders. Tumbling share price. The free for all party is over. Don’t wish them ill but the golly gee smugness should be gone. Like the teal should have been in the new paint job.

Or is it sea foam?? The preferred colour for a bridesmaid...
Stand-by for new ATIS message......
 
BobbyPSP
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 8:39 pm

tphuang wrote:
it always amazes me when people talk about adding services from Calgary like it’s a large city. It’s a significant drop from Vancouver which itself is smaller than Toronto. A jv with delta will not change any of that.


There is/was a huge amount of snowbird travel to the southern US. East tends to go to Florida and west to PHX/TUS//PSP.
 
YYZLGA
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 9:07 pm

tphuang wrote:
it always amazes me when people talk about adding services from Calgary like it’s a large city. It’s a significant drop from Vancouver which itself is smaller than Toronto. A jv with delta will not change any of that.


True, although one thing people tend to ignore (especially when talking about overseas routes) is that Calgary--or more precisely Banff--is a major global tourist destination. That's a big factor for some routes, especially the Asian and European ones.
 
MIflyer12
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 9:47 pm

tphuang wrote:
it always amazes me when people talk about adding services from Calgary like it’s a large city. It’s a significant drop from Vancouver which itself is smaller than Toronto. A jv with delta will not change any of that.


Look at Delta's coverage of Florida vs. WestJet. Look at Delta's coverage of the U.S. Southwest. If Canadians are willing to connect and pay they can get a lot closer to the snowbird destinations. Americans can fly to more Canadian cities than Delta could ever manage on its own.
 
SteelChair
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 10:20 pm

enilria wrote:
Welcome to the JV with Delta. They are the kings of capacity minimization. This is music to their ears whether they were explicitly involved or not.


Well, for some routes, maybe, capacity discipline seems to have worked for them. But do you think Delta would really care how much capacity Westjet had on internal Canadian routes which can't be served alternatively through a hub on the combined network? For example, Calgary-Edmonton?
 
tphuang
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 11:02 pm

MIflyer12 wrote:
tphuang wrote:
it always amazes me when people talk about adding services from Calgary like it’s a large city. It’s a significant drop from Vancouver which itself is smaller than Toronto. A jv with delta will not change any of that.


Look at Delta's coverage of Florida vs. WestJet. Look at Delta's coverage of the U.S. Southwest. If Canadians are willing to connect and pay they can get a lot closer to the snowbird destinations. Americans can fly to more Canadian cities than Delta could ever manage on its own.


Canadians on the west part of the country don’t tend to go to Florida fo vacation.
 
yyztpa
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Re: WestJet cutting capacity by 6%

Thu Aug 23, 2018 11:41 pm

MIflyer12 wrote:
tphuang wrote:
it always amazes me when people talk about adding services from Calgary like it’s a large city. It’s a significant drop from Vancouver which itself is smaller than Toronto. A jv with delta will not change any of that.


Look at Delta's coverage of Florida vs. WestJet. Look at Delta's coverage of the U.S. Southwest. If Canadians are willing to connect and pay they can get a lot closer to the snowbird destinations. Americans can fly to more Canadian cities than Delta could ever manage on its own.


I expect you meant Delta's coverage of the U.S. Southeast
Canadians have lots of choices for their sun dollar and are not willing to pay a Delta premium just to get to US Southeast. Florida flying is all about low cost direct sun traveler and not high cost hub focused on business market. Just look at the Southwest, Frontier, Allegiant, Spirit tails (and Rouge tails) flying direct to multiple Florida destinations. Even BA from LGW fits that model in MCO and TPA.
 
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aerolimani
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Re: WestJet cutting capacity by 6%

Fri Aug 24, 2018 1:10 am

longhauler wrote:
chrisp390 wrote:
MEX was cut very quickly, surprised the route did not work out well. AM cut YYC-MEX just as WS was entering so nobody in that route anymore.


With a WS hub and loyalty in YYC and an AM hub and lotalty in MEX and no competition ... one has to acknowledge that there is no traffic between the two if neither of these two airlines can make it work.

AM and WS don't seem like particularly cozy friends. AM entered the market, and then suddenly WS entered very shortly after. There was no need for two carriers on this route. Especially, this is not a route that was suitable for WS. Aeromexico flew it as a red-eye which provided opportunity for connections through to elsewhere in Latin America. However, I think AM needed both the connecting traffic and the O&D to make it work. WS was almost entirely reliant on O&D traffic, with only a few people willing to self-connect to other destinations. So, when WS entered the market, with crazy cheap deals, they siphoned off the O&D.

I feel like WS was concerned about the possibility that AM could start siphoning off leisure travellers willing to pay less and connect through MEX, and to travel independently. So, once they pushed AM out of YYC, WS achieved their objective, and they canceled their own route. I think it comes down to WS preferring to keep leisure travellers in their more lucrative direct flights, many of which also include vacation packages from Westjet Vacations.

I think there was market enough for one daily 737 to MEX, but not two.

Just my theory.
 
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aerolimani
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Re: WestJet cutting capacity by 6%

Fri Aug 24, 2018 1:15 am

tphuang wrote:
it always amazes me when people talk about adding services from Calgary like it’s a large city. It’s a significant drop from Vancouver which itself is smaller than Toronto. A jv with delta will not change any of that.

Yet, somehow, lowly little YYC manages to sustain flights with Hainan to PEK, BA and AC to LHR, WS and TS to LGW, KL to AMS, AC to FRA, and Edelweiss with seasonal service to ZRH. Am I missing any? I'm pretty sure there was enough traffic for a daily 737 to the largest city in North America, and Mexico's centre of commerce. There just wasn't enough space for two carriers on the route, both operating daily. I think WS's objective was to squeeze AM out of the market.
 
tphuang
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Re: WestJet cutting capacity by 6%

Fri Aug 24, 2018 1:57 am

aerolimani wrote:
tphuang wrote:
it always amazes me when people talk about adding services from Calgary like it’s a large city. It’s a significant drop from Vancouver which itself is smaller than Toronto. A jv with delta will not change any of that.

Yet, somehow, lowly little YYC manages to sustain flights with Hainan to PEK, BA and AC to LHR, WS and TS to LGW, KL to AMS, AC to FRA, and Edelweiss with seasonal service to ZRH. Am I missing any? I'm pretty sure there was enough traffic for a daily 737 to the largest city in North America, and Mexico's centre of commerce. There just wasn't enough space for two carriers on the route, both operating daily. I think WS's objective was to squeeze AM out of the market.

And have you looked at how much service YVR sustain to those cities? If WS expands to the point where YYC becomes their international gateway, I suppose you could get some additional traffic like MEX-YYC-PEK/PVG/HKG. There just simply isn't that much O&D from YYC to non vacation resort part of Mexico.
 
Beatyair
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Re: WestJet cutting capacity by 6%

Fri Aug 24, 2018 2:13 am

Just re-aligning and preparing for the JV routes with Delta. It is good to focus on money making routes and serve them the best as you can.
 
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aerolimani
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Re: WestJet cutting capacity by 6%

Fri Aug 24, 2018 4:04 am

tphuang wrote:
aerolimani wrote:
tphuang wrote:
it always amazes me when people talk about adding services from Calgary like it’s a large city. It’s a significant drop from Vancouver which itself is smaller than Toronto. A jv with delta will not change any of that.

Yet, somehow, lowly little YYC manages to sustain flights with Hainan to PEK, BA and AC to LHR, WS and TS to LGW, KL to AMS, AC to FRA, and Edelweiss with seasonal service to ZRH. Am I missing any? I'm pretty sure there was enough traffic for a daily 737 to the largest city in North America, and Mexico's centre of commerce. There just wasn't enough space for two carriers on the route, both operating daily. I think WS's objective was to squeeze AM out of the market.

And have you looked at how much service YVR sustain to those cities? If WS expands to the point where YYC becomes their international gateway, I suppose you could get some additional traffic like MEX-YYC-PEK/PVG/HKG. There just simply isn't that much O&D from YYC to non vacation resort part of Mexico.

Indeed, this was not a good route for WS. It was a good route for AM, but I think it was a low priority for them, and once WS started on the same route (also daily), AM just gave up. It was a good AM route because they have connecting opportunities, and the all-important public profile, throughout Latin America. WS lacks meaningful connections at the MEX end of things.

I am not trying to say that YYC is precisely on par with YVR, but nor is YYC a bit player. Passengers served in 2017: YVR: 24 million, YYC: 16 million.
 
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SuperTwin
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Re: WestJet cutting capacity by 6%

Fri Aug 24, 2018 4:16 am

aerolimani wrote:
tphuang wrote:
aerolimani wrote:
Yet, somehow, lowly little YYC manages to sustain flights with Hainan to PEK, BA and AC to LHR, WS and TS to LGW, KL to AMS, AC to FRA, and Edelweiss with seasonal service to ZRH. Am I missing any? I'm pretty sure there was enough traffic for a daily 737 to the largest city in North America, and Mexico's centre of commerce. There just wasn't enough space for two carriers on the route, both operating daily. I think WS's objective was to squeeze AM out of the market.

And have you looked at how much service YVR sustain to those cities? If WS expands to the point where YYC becomes their international gateway, I suppose you could get some additional traffic like MEX-YYC-PEK/PVG/HKG. There just simply isn't that much O&D from YYC to non vacation resort part of Mexico.

Indeed, this was not a good route for WS. It was a good route for AM, but I think it was a low priority for them, and once WS started on the same route (also daily), AM just gave up. It was a good AM route because they have connecting opportunities, and the all-important public profile, throughout Latin America. WS lacks meaningful connections at the MEX end of things.

I am not trying to say that YYC is precisely on par with YVR, but nor is YYC a bit player. Passengers served in 2017: YVR: 24 million, YYC: 16 million.


Now do your homework and see the massive disparity between those 2 airports and the number of international vs domestic travelers. Not the same at all.
SuperTwin
 
Whiteguy
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Re: WestJet cutting capacity by 6%

Fri Aug 24, 2018 4:16 am

tphuang wrote:
MIflyer12 wrote:
tphuang wrote:
it always amazes me when people talk about adding services from Calgary like it’s a large city. It’s a significant drop from Vancouver which itself is smaller than Toronto. A jv with delta will not change any of that.


Look at Delta's coverage of Florida vs. WestJet. Look at Delta's coverage of the U.S. Southwest. If Canadians are willing to connect and pay they can get a lot closer to the snowbird destinations. Americans can fly to more Canadian cities than Delta could ever manage on its own.


Canadians on the west part of the country don’t tend to go to Florida fo vacation.


Although numbers are increasing, WS is adding service from YXE to MCO and increasing service on YEG, YYC (Daily). They also serve MCO from YQR and YWG.
 
Jayce
Posts: 542
Joined: Sat Nov 06, 1999 10:36 am

Re: WestJet cutting capacity by 6%

Fri Aug 24, 2018 5:19 am

aerolimani wrote:
tphuang wrote:
it always amazes me when people talk about adding services from Calgary like it’s a large city. It’s a significant drop from Vancouver which itself is smaller than Toronto. A jv with delta will not change any of that.

Yet, somehow, lowly little YYC manages to sustain flights with Hainan to PEK, BA and AC to LHR, WS and TS to LGW, KL to AMS, AC to FRA, and Edelweiss with seasonal service to ZRH. Am I missing any? I'm pretty sure there was enough traffic for a daily 737 to the largest city in North America, and Mexico's centre of commerce. There just wasn't enough space for two carriers on the route, both operating daily. I think WS's objective was to squeeze AM out of the market.


To be fair, BA, TS and Edelweiss are seasonal. What YYC does excel at is being a hub for domestic and
Sun destinations. I don’t think it has the O&D to be a major international gateway just yet.
"Trying is the first step towards failure" -Homer Simpson
 
User avatar
enilria
Posts: 10377
Joined: Fri Feb 22, 2008 7:15 pm

Re: WestJet cutting capacity by 6%

Fri Aug 24, 2018 1:16 pm

SteelChair wrote:
enilria wrote:
Welcome to the JV with Delta. They are the kings of capacity minimization. This is music to their ears whether they were explicitly involved or not.


Well, for some routes, maybe, capacity discipline seems to have worked for them. But do you think Delta would really care how much capacity Westjet had on internal Canadian routes which can't be served alternatively through a hub on the combined network? For example, Calgary-Edmonton?

Delta would want the capacity where it would feed the JV. So, yes they would care.
 
global1
Posts: 531
Joined: Fri Dec 19, 2014 5:31 pm

Re: WestJet cutting capacity by 6%

Fri Aug 24, 2018 8:38 pm

Does UA have a JV with AC?
 
BML87
Topic Author
Posts: 100
Joined: Thu Dec 28, 2017 6:55 pm

Re: WestJet cutting capacity by 6%

Sat Aug 25, 2018 12:13 am

Updated list:

Route Cancellations:
Toronto-Fort McMurray
Toronto-Sudbury
Calgary-Mexico City
Vancouver-Mexico City
Halifax-Deer Lake
Ottawa-Tampa
Montreal-Quebec City

Year Round to Seasonal:
Vancouver-Montreal
Edmonton-Ottawa

Frequency Reductions:
Calgary-Denver
Calgary-Edmonton
Calgary-Toronto
Calgary-Vancouver
Calgary-Phoenix
Toronto-Los Angeles
Toronto-Vancouver
Toronto-Edmonton
Toronto-Fort McMurray
Toronto-Winnipeg
Toronto-Phoenix
Toronto-Aruba
Toronto-Belize
Toronto-Huatulco
Toronto-Liberia
Vancouver-Edmonton
Vancouver-Fort St. John
Vancouver-Cancun
Vancouver-Puerto Vallarta
Vancouver-Cabo San Lucas
Vancouver-Palm Springs
Halifax-St. John’s
Halifax-Sydney
Winnipeg-Palm Springs
 
United1
Posts: 4208
Joined: Wed Oct 08, 2003 9:21 am

Re: WestJet cutting capacity by 6%

Sat Aug 25, 2018 1:56 am

[list=][/list]
global1 wrote:
Does UA have a JV with AC?


Yes...transatlantic.

They have ATI and approval to start a transborder joint venture (and have had that for years) but I don't think it's in place.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
sixtyseven
Posts: 829
Joined: Thu Nov 16, 2006 9:42 am

Re: WestJet cutting capacity by 6%

Sat Aug 25, 2018 7:17 am

Halifax-Deer Lake scrubbed.

Would have thought that wouldn’t be a problem. According to ole Jimbo, expensive gas is no problem for WestJet.

AC is in trouble.
Stand-by for new ATIS message......
 
chrisp390
Posts: 723
Joined: Fri May 16, 2014 6:37 pm

Re: WestJet cutting capacity by 6%

Sat Aug 25, 2018 11:13 am

The fact they cannot sustain YVR-YUL, a flight between the second and third largest Canadian cities except on a seasonal basis is troubling.
 
jimbo737
Posts: 547
Joined: Mon Jan 18, 2016 12:18 am

NnnRe: WestJet cutting capacity by 6%

Sat Aug 25, 2018 3:20 pm

Fuel impacts all pretty equally. Those with younger fleets have a slight advantage.

Who’s going to compile the list of all AC’s “cancellations” as they cut close to 5b asm’s from their Q3 sched into Q4?

There’ll be a lot.

AC cuts the equivalent of about 85% of WS’s total asm production on a seasonal basis. No other airline comes close to this sort of seasonal swing but that’s likely the reason AC’s margins are so weak compared to their US brethren. They are burdened with way too much capacity, infrastructure and people for 7 months of the year that drags down earnings to ever be able to come close to US airline performance.

The seasonal capacity swing in the US is under 7%. AC’s is 3x that rate.

Here’s commentary from a US analyst on the matter.

Nishant Mani, JP Morgan

No Air Canada capacity cuts yet, but we’re modeling for a 4Q trim. Put simply, we believe that Air Canada had a prime opportunity during 2Q earnings to announce schedule adjustments to illustrate that management is being proactive in light of fuel prices up ~30% year-over-year (ex-currency).

On the one hand, Air Canada has been generating positive unit revenues in 1Q and 2Q even with elevated capacity growth, so it does not appear to be a dire situation. On the other hand, however, trimming Air Canada’s least profitable (and least “strategic”) flying would help elevate margins, particularly at a time when the company is under-delivering on its EBITDAR goals in light of more expensive fuel. Unfortunately management punted on the issue this quarter, saying that they are “studying” the feasibility of non-peak 3Q and 4Q schedule adjustments. However, we believe that management understands why capacity cuts help drive margins higher and helps establish confidence that the company is willing and able to adjust the business to changing economic conditions (which in turn, we believe, should help with the stock’s multiple over time).

Accordingly we are now modeling for a 100bps cut to 4Q flying, as we assume 3% capacity growth, and we believe the company will indicate something along these lines in the coming months.

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