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dstblj52
Posts: 675
Joined: Tue Nov 19, 2019 8:38 pm

Re: Why WN does not fly to Canada --

Thu Apr 29, 2021 2:15 pm

N717TW wrote:
STLflyer wrote:
Why are they required to accept CAD?

They don't accept Mexican pesos, Aruban florin, Jamaican dollars and they most definitely don't accept Cuban pesos.

Unless there's some Canadian law that says airlines flying to Canada must accept CAD, I fail to see how this is a hurdle. Canadians can use their credit card and their bank will do the conversion, possibly at better rates than what SWA would provide. I've used my US credit cards to purchase flights in foreign currency many times.


there actually were a lot of limitations with Cowboy (WN's legacy system and a cast off of the old Braniff that ran on some very ancient IBM mainframes). For a long time WN needed to run 27 hour days in the system in order to manage west coat arrivals after 9pm ET. Similarly the system didn't actually have the capacity to handle international ticking...and not just currency...but passports, visas, and other documentation needs. Its also been well established that Cowboy didn't have the capacity to add bag fees for a long time..hence why 3rd bags and other large items were often booked/billed as separate cargo tickets. Sure, you're right they could upgrade the system but that's also a huge logistical undertaking and the expense is enormous when you consider that WN owned its system. When you consider that WN had a 500+ fleet flying exclusively domestic, the international revenue was going to have to be significant in order to justify the expense/complexity of upgrading the entire system and more importantly, to having to pay a CRS fee.

Also note that WN had these exact issues when they first started international service and that was after the AirTran merger that brought in a CRS with international operational capacity. The benefit for WN at the start of their intn'l service was how San Jose, etc. were mostly US point of sale, allowing them to get away with not having to collect foreign currency. The same isn't true for most Canadian cities where a lot (and in many cases, the majority of seats) is Canadian-side point of sale.

There of that system now and are now on amadeus which can handle currencies the real issue us that southwest is not in the GDS's and those needs a decent market presence to drive people to southwest.com which is tough to get overseas
 
dstblj52
Posts: 675
Joined: Tue Nov 19, 2019 8:38 pm

Re: Why WN does not fly to Canada --

Thu Apr 29, 2021 2:20 pm

jplatts wrote:
jimbo737 wrote:
Here’s the problem: Even if Southwest offered $1 fares from YYC-PHX, just to break even on the taxes alone, (forgetting about covering off their CASM), they’d have to charge c$95.50. And as a portion of taxes are a function of fares, the higher the fare, the more the tax.

It’s very difficult for SW to stimulate traffic with cheap fares when dealing with these direct taxes, (forgetting about all the other high taxes and fees placed on every carrier operating in Canada).

Add to that, other than a couple of markets, there isn’t the sort of higher yielding traffic on these routes that SW needs to average up the yields to where potential route profitability would exceed other opportunities elsewhere. Canadians are notoriously cheap.

And then there’s Cdn POS. There’s a reason why WestJet didn’t even contemplate transborder and southern sched operations until they had 40+ tails available to feed their Canadian gateways.


While AA has previously partnered with CP (prior to the AC-CP merger) and WS in Canada, AA doesn't currently partner with any Canadian airlines whereas DL partners with WS in Canada and UA partners with AC in Canada (with both UA and AC being in Star Alliance).

Does AA have significant point-of-sale in Canada, or is AA simply serving some Canadian destinations to remain relevant to its FF base in the U.S.? Were the AA flights to Canada profitable prior to COVID-19, or were these routes unprofitable prior to the pandemic but operated for reasons such as network relevance?

If the AA flights to Canada were profitable and if AA didn't have significant point of sale, how could AA make these routes work profitably?

There are a few U.S. to Canada routes such as BWI-YUL that might be able to support nonstop service on WN without significant Canadian point-of-sale if there was enough demand on the U.S. end.

There are also other factors that would support BWI-YUL nonstop service on WN if there is enough demand on the U.S. end such as
(a) fewer U.S. cities having nonstop service to YUL,
(b) the significant connecting feed that WN would have on the U.S. end,
(c) the significant FF base that WN already has in the Baltimore/Washington region (especially on the Baltimore side) and many other U.S. markets served by WN,
(d) limited competition on WAS-YUL with AC and UA being the only airlines currently serving YUL nonstop from the WAS market (and both of these airlines being JV partners instead of ordinary competitors), and
(e) YUL being further from U.S. airports with WN service than YYZ.

Another big difference between the AA FF base and the WN FF base is that many WN FF's who need to travel to Canada are willing to fly on AC, WS, AA, DL, or UA to Canada whereas there are more AA FF's who would avoid other airlines such as AC, WS, DL, or UA whenever possible.

AA because it's on the GDS's has more access to canadian point of sale then southwest would because southwest has to get people to check southwest.com whereas AA just by being listed on the GDS's can sell tickets basically on a brand agnostic basis, just by being listed they will sell some tickets by having the best schedule for someone or the best price, or been an airline someone hasn't tried before etc etc.
 
Lootess
Posts: 670
Joined: Sun May 13, 2018 6:15 am

Re: Why WN does not fly to Canada --

Thu Apr 29, 2021 5:22 pm

Amadeus is modern, just because the WN website looks dated, the backend handle all the complex things including currency. Basically look at the site as a skin.

It’s totally a matter of resources, since they don’t accept local currencies in those AirTran routes they inherited. WN and WestJet almost partnered, but Delta came in.
 
westgate
Posts: 159
Joined: Wed Aug 24, 2016 6:17 pm

Re: Why WN does not fly to Canada --

Thu Apr 29, 2021 6:09 pm

ElPistolero wrote:
WN knows its US clientele has no interest in travelling to Canada. Why would they? Canada doesn’t offer anything that they can’t get a better and cheaper version of in the US.


Except for French speaking Montreal/Quebec, you definitely can't find that anywhere in the US (maybe a little bit on the border and in Louisiana but hardly anything significant in both cases). If Americans want anywhere near that kind of an 'immersive' linguistic and cultural experience in a safe and stable developed world country they would have to fly all the way across the pond to Europe.

I would assume that there technically should be enough 'weekend getaway' demand from places like Boston, New York, Philadelphia, Wash/Balt, Chicago to YUL (the kind that FR/U2 rely on in Europe) but I have absolutely no idea if such demand actually exists (and I assume that the type of US traveller who would be interested in that kind of thing would likely be able to afford to or would rather just fly to Paris etc instead).

WN might be able to achieve a substantial US point-of-sale market stimulation from the above listed destinations to YUL if they started such flights, but it's probably just not worth it from their perspective.
 
ElPistolero
Posts: 2349
Joined: Thu Feb 23, 2012 12:44 am

Re: Why WN does not fly to Canada --

Thu Apr 29, 2021 7:00 pm

westgate wrote:

Except for French speaking Montreal/Quebec, you definitely can't find that anywhere in the US (maybe a little bit on the border and in Louisiana but hardly anything significant in both cases). If Americans want anywhere near that kind of an 'immersive' linguistic and cultural experience in a safe and stable developed world country they would have to fly all the way across the pond to Europe.

I would assume that there technically should be enough 'weekend getaway' demand from places like Boston, New York, Philadelphia, Wash/Balt, Chicago to YUL (the kind that FR/U2 rely on in Europe) but I have absolutely no idea if such demand actually exists (and I assume that the type of US traveller who would be interested in that kind of thing would likely be able to afford to or would rather just fly to Paris etc instead).

WN might be able to achieve a substantial US point-of-sale market stimulation from the above listed destinations to YUL if they started such flights, but it's probably just not worth it from their perspective.


Very niche (and seasonal) market that. Too small for WN.

The number of US flights to/from YQB (the more “immersive” experience) speaks for itself. Montreal is a very Anglo city. I’ve lived in Montreal for years. Aside from 2-3 months in the summer (JFL, F1, Jazz), it’s a fairly quiet “big city”. In January/February, it’s pretty much dead.
 
jplatts
Posts: 4525
Joined: Sat Mar 18, 2017 6:42 pm

Re: Why WN does not fly to Canada --

Thu Apr 29, 2021 7:23 pm

jaybird wrote:
I remember some forum users in the past saying that they could not even get on southwest.com in the country where they were living. I suppose you could use a VPN to get around it - but I don't believe southwest.com accepts payment in anything other than USD.


The southwest.com website is accessible from Canada, Mexico, and some other countries in Central America and the Caribbean, but blocked in some Asian, European, and African countries.

Previous posts regarding the blocking of southwest.com website from some Asian, European, and African countries can be found at viewtopic.php?t=1410737#p20936251 and viewtopic.php?t=1398429&start=50#p20541397.
 
westgate
Posts: 159
Joined: Wed Aug 24, 2016 6:17 pm

Re: Why WN does not fly to Canada --

Thu Apr 29, 2021 7:35 pm

ElPistolero wrote:
westgate wrote:
WN might be able to achieve a substantial US point-of-sale market stimulation from the above listed destinations to YUL if they started such flights, but it's probably just not worth it from their perspective.


Very niche (and seasonal) market that. Too small for WN.


Yes, this is what I expected.

ElPistolero wrote:
Montreal is a very Anglo city. I’ve lived in Montreal for years.


I've actually never been to Montreal myself, so had no idea it was so 'Anglo'.

Although from my perspective, if I was personally living in the Eastern US right now, Montreal would definitely be up there as my top pick for a weekend getaway, specifically for the linguistic/cultural experience (it may be quite 'Anglo', but it's certainly much more 'Francophone' than anywhere else in the US). I'm sure there are at least a few other people who think like me, but the lack of low cost options likely puts them off. Also, I don't think the whole 'weekend getaway' thing is nearly as popular in the States as it is in Europe, which probably doesn't help much either.
 
jplatts
Posts: 4525
Joined: Sat Mar 18, 2017 6:42 pm

Re: Why WN does not fly to Canada --

Thu Apr 29, 2021 7:38 pm

WN732 wrote:
I am guessing that they are working to remedy this since they are going to need to process CAD if they want BLI to work out.


WN has had some customers in Ontario who have booked WN flights out of BUF and DTW for over 20 years, even though the prices of WN flights out of BUF and DTW are quoted in U.S. dollars instead of Canadian dollars.

WN has also had some Mexican customers who have booked WN flights out of SAN, ELP, and HRL for decades prior to WN serving any non-U.S. airports.

Other U.S. airlines such as F9, NK, G4, B6, AA, DL, UA, AS, NW, CO, and US have also had experience with Canadian and Mexican customers booking U.S. domestic flights out of airports on the U.S. side of the border.
 
N649DL
Posts: 1173
Joined: Sat Aug 25, 2018 10:21 pm

Re: Why WN does not fly to Canada --

Thu Apr 29, 2021 8:02 pm

jplatts wrote:
jimbo737 wrote:
Here’s the problem: Even if Southwest offered $1 fares from YYC-PHX, just to break even on the taxes alone, (forgetting about covering off their CASM), they’d have to charge c$95.50. And as a portion of taxes are a function of fares, the higher the fare, the more the tax.

It’s very difficult for SW to stimulate traffic with cheap fares when dealing with these direct taxes, (forgetting about all the other high taxes and fees placed on every carrier operating in Canada).

Add to that, other than a couple of markets, there isn’t the sort of higher yielding traffic on these routes that SW needs to average up the yields to where potential route profitability would exceed other opportunities elsewhere. Canadians are notoriously cheap.

And then there’s Cdn POS. There’s a reason why WestJet didn’t even contemplate transborder and southern sched operations until they had 40+ tails available to feed their Canadian gateways.


While AA has previously partnered with CP (prior to the AC-CP merger) and WS in Canada, AA doesn't currently partner with any Canadian airlines whereas DL partners with WS in Canada and UA partners with AC in Canada (with both UA and AC being in Star Alliance).

Does AA have significant point-of-sale in Canada, or is AA simply serving some Canadian destinations to remain relevant to its FF base in the U.S.? Were the AA flights to Canada profitable prior to COVID-19, or were these routes unprofitable prior to the pandemic but operated for reasons such as network relevance?

If the AA flights to Canada were profitable and if AA didn't have significant point of sale, how could AA make these routes work profitably?



For years, I believe AA has been *very* strong in Toronto. However, after years of flying the route they dropped YYZ-LAX. That was a little surprising they flew it for years and now only serve a far west as PHX just seasonally.
 
Skywatcher
Posts: 959
Joined: Sat Sep 14, 2002 11:19 am

Re: Why WN does not fly to Canada --

Thu Apr 29, 2021 9:09 pm

The "foreign transaction fees" that are frequently mentioned here are buried. If the real rate for buying $1.00 Cdn. is $0.75 USD it will be converted at $0.77 or $0.78 USD on your U.S. dollar credit card. You won't see the fee, just the $0.78 charge. Visa, Mastercard etc. all do this all over the world when converting any forex transactions into the cardholders home currency.

I also live in Montreal. It's about 25% anglo, 50% franco and 25% "other", most of whom assimilate more towards the franco side due to government policies concerning education language.

I don't see SW flying anywhere in Eastern Canada-total cultural incompatibility. I could see PHX-YYC though.

The tax issue is as much the USA Federal government stiffing international passengers as it is Canadian.
 
Vicenza
Posts: 346
Joined: Sun Apr 19, 2020 3:21 pm

Re: Why WN does not fly to Canada --

Thu Apr 29, 2021 9:37 pm

777luver wrote:
bob75013 wrote:
777luver wrote:
Not sure I buy that, I could be wrong though. I thought it was because of the ridiculously high landing fees and other taxes. Fact: AC publicly stated a few years ago that it could save $2 BILLION a year in taxes if it just moved to the US. Staggering number




The article says that WN's president said it was. That sounds pretty authoritative to me.


Doesn't mean that's the truth lol, as others have stated on here


Typical a.net response there. What very many say on here is also usually very far from the truth.
 
JayinKitsap
Posts: 2507
Joined: Sat Nov 26, 2005 9:55 am

Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 5:26 am

Twenty years ago I was involved with designing a new Seattle berth for a Seattle to Victoria Car Ferry, the Princess Marguerite was retired and the BC government so wanted a replacement ferry service. They got the Tasmanian Ferry Company to operate the route using InCat's wave piercing catamaran to come in for the US summer months when it is winter in Tasmania. The below video was a later production version of Incat's ferry envisioned for this route.

https://www.youtube.com/watch?v=nP1K6nS_lLQ

The project came screeching to an abrupt halt when the Canadian Government required that the ferry be imported and registered in Canada, mostly so sales and GST taxes would be levied on the value of the vessel. What killed it was it pertained to each vessel. The ferry company would have to pay all those taxes again the next season if a different vessel was sent, imagine scheduling around having certain vessels do the route. If pertained to aircraft, if a plane went out of service, only a frame having paid this tax could substitute.

Not sure if this still pertains still, but AS destinations to Canada are quite limited, just Calgary, Edmonton, Kelowna, Vancouver, and Victoria.

It's a way to protect their own domestic carriers.
 
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eta unknown
Posts: 3031
Joined: Wed Jun 13, 2001 5:03 am

Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 8:09 am

Vicenza wrote:
777luver wrote:
bob75013 wrote:



The article says that WN's president said it was. That sounds pretty authoritative to me.


Doesn't mean that's the truth lol, as others have stated on here


Typical a.net response there. What very many say on here is also usually very far from the truth.

I hate to break this to you, but you need to learn how to read between the lines. I have too many stories of airline press releases and CEO interviews spilling garbage to avoid telling the real reasons why a decision was made. Hell, once I worked for my airline's PR dept. and I had to spin something very negative into a positive.
 
GalaxyFlyer
Posts: 7776
Joined: Fri Jan 01, 2016 4:44 am

Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 1:46 pm

westgate wrote:
ElPistolero wrote:
westgate wrote:
WN might be able to achieve a substantial US point-of-sale market stimulation from the above listed destinations to YUL if they started such flights, but it's probably just not worth it from their perspective.


Very niche (and seasonal) market that. Too small for WN.


Yes, this is what I expected.

ElPistolero wrote:
Montreal is a very Anglo city. I’ve lived in Montreal for years.


I've actually never been to Montreal myself, so had no idea it was so 'Anglo'.

Although from my perspective, if I was personally living in the Eastern US right now, Montreal would definitely be up there as my top pick for a weekend getaway, specifically for the linguistic/cultural experience (it may be quite 'Anglo', but it's certainly much more 'Francophone' than anywhere else in the US). I'm sure there are at least a few other people who think like me, but the lack of low cost options likely puts them off. Also, I don't think the whole 'weekend getaway' thing is nearly as popular in the States as it is in Europe, which probably doesn't help much either.


Go to Quebec City, much nicer than Montreal as a weekend getaway place.
 
kalvado
Posts: 3156
Joined: Wed Mar 01, 2006 4:29 am

Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 1:51 pm

ModernAviator wrote:
Revelation wrote:
WN732 wrote:
I am guessing that they are working to remedy this since they are going to need to process CAD if they want BLI to work out.

Cross-boarder customers can just go through the US website, give a Canadian credit card, and let the credit card company do the CAD to USD conversion, I would think. I do something similar when I use my US credit card to order stuff from non-US websites.


While we can do that most Canadian credit cards charge a foreign currency transaction fee (it's usually a percentage.) even for USD on top of the conversion rate. It does make a difference for Canadians to Pay in CAD vs USD to avoid the fee. It can add up quickly, Myself and everyone I know here tries to avoid paying in USD for that reason. However, if the CAD continues to strengthen as it has been the last little while that can be a bonus for WN.

Without knowing Canadian laws, it may easily be illegal not to offer CAD transactions for operation in Canada. Ordering from foreign web sites is a completely different story as those companies may not have any physical operations in other countries, and the contract is made under the laws of the seller's home country.
 
joeblow10
Posts: 614
Joined: Mon Jun 04, 2018 11:58 pm

Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 1:56 pm

eta unknown wrote:
Vicenza wrote:
777luver wrote:

Doesn't mean that's the truth lol, as others have stated on here


Typical a.net response there. What very many say on here is also usually very far from the truth.

I hate to break this to you, but you need to learn how to read between the lines. I have too many stories of airline press releases and CEO interviews spilling garbage to avoid telling the real reasons why a decision was made. Hell, once I worked for my airline's PR dept. and I had to spin something very negative into a positive.


This. Full stop.

How many airlines are (were) doing “well” on US-Canada before COVID hit? F9 tried, Swoop tried, etc... and none really went well. The cost of operating into Canada is enormous and the growth in the customer base is minute. While it would “be nice” for the US consumer to fly into a few cities in Canada, the reality is there are maybe 4-5 cities WN could serve and it’s just not worth their time. Canada is generally not a big tourist draw for US travelers, and the business traffic has plenty of choices on the big guys

On the other hand, there is a reason they are opening BLI - and assuming that goes well, why I would assume they go into BTV and grow BUF. The costs are much lower - and the Canadians are willing to drive a bit to get much better deals.
 
tphuang
Posts: 6414
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Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 2:16 pm

N649DL wrote:
jplatts wrote:
jimbo737 wrote:
Here’s the problem: Even if Southwest offered $1 fares from YYC-PHX, just to break even on the taxes alone, (forgetting about covering off their CASM), they’d have to charge c$95.50. And as a portion of taxes are a function of fares, the higher the fare, the more the tax.

It’s very difficult for SW to stimulate traffic with cheap fares when dealing with these direct taxes, (forgetting about all the other high taxes and fees placed on every carrier operating in Canada).

Add to that, other than a couple of markets, there isn’t the sort of higher yielding traffic on these routes that SW needs to average up the yields to where potential route profitability would exceed other opportunities elsewhere. Canadians are notoriously cheap.

And then there’s Cdn POS. There’s a reason why WestJet didn’t even contemplate transborder and southern sched operations until they had 40+ tails available to feed their Canadian gateways.


While AA has previously partnered with CP (prior to the AC-CP merger) and WS in Canada, AA doesn't currently partner with any Canadian airlines whereas DL partners with WS in Canada and UA partners with AC in Canada (with both UA and AC being in Star Alliance).

Does AA have significant point-of-sale in Canada, or is AA simply serving some Canadian destinations to remain relevant to its FF base in the U.S.? Were the AA flights to Canada profitable prior to COVID-19, or were these routes unprofitable prior to the pandemic but operated for reasons such as network relevance?

If the AA flights to Canada were profitable and if AA didn't have significant point of sale, how could AA make these routes work profitably?



For years, I believe AA has been *very* strong in Toronto. However, after years of flying the route they dropped YYZ-LAX. That was a little surprising they flew it for years and now only serve a far west as PHX just seasonally.


How do you know they have been very strong in Toronto? My experience on NYC-LGA has been that AA was always the far and way weakest carrier on that route. They just service their hubs like all the other legacies.
 
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airzim
Posts: 1519
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Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 2:54 pm

joeblow10 wrote:
eta unknown wrote:
Vicenza wrote:

Typical a.net response there. What very many say on here is also usually very far from the truth.

I hate to break this to you, but you need to learn how to read between the lines. I have too many stories of airline press releases and CEO interviews spilling garbage to avoid telling the real reasons why a decision was made. Hell, once I worked for my airline's PR dept. and I had to spin something very negative into a positive.


This. Full stop.

How many airlines are (were) doing “well” on US-Canada before COVID hit? F9 tried, Swoop tried, etc... and none really went well. The cost of operating into Canada is enormous and the growth in the customer base is minute. While it would “be nice” for the US consumer to fly into a few cities in Canada, the reality is there are maybe 4-5 cities WN could serve and it’s just not worth their time. Canada is generally not a big tourist draw for US travelers, and the business traffic has plenty of choices on the big guys

On the other hand, there is a reason they are opening BLI - and assuming that goes well, why I would assume they go into BTV and grow BUF. The costs are much lower - and the Canadians are willing to drive a bit to get much better deals.


The real issue is not the cost, it's the distribution of demand in the US. The Canadian carriers have always dominated the trans-border market because Canadian demand is generally concentrated in a few big cities. Therefore AC, and Westjet to a lesser extent, can fly to major and smaller cities in the US from their main operating bases (YYZ, YUL, YVR, YYC,). US carriers generally operate from their hub cities, and serve the reverse on the Canadian side (a few smaller bases that are not served nonstop on the Canadian carriers, (YOW, YWG, the Maritimes, etc.) from their hub cities). So while both sides do benefit, the US market is far larger and more lucrative than the Canadian side. For WN, (and the RES issue was a real problem, but could be solved), I assume they don't see the value trying to compete with the Canadian and already entrenched US carriers, by trying to serve the major Canadian markets from multiple US cities (which is what it would take to get any decent market share). I'm sure the cost doesn't help, but I really think the market distribution is the real issue.
 
2travel2know2
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Joined: Mon Apr 26, 2010 3:01 pm

Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 3:03 pm

IMHO, then there's 0 chance to see WN FLL/MCO/HOU/MDW-YHM and HOU/MDW-YYC.
Bear in mind, WN uses gates which could handle international arriving flights at FLL, HOU and MDW.
I'm not on CM's payroll.
 
N649DL
Posts: 1173
Joined: Sat Aug 25, 2018 10:21 pm

Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 5:01 pm

tphuang wrote:
N649DL wrote:
jplatts wrote:

While AA has previously partnered with CP (prior to the AC-CP merger) and WS in Canada, AA doesn't currently partner with any Canadian airlines whereas DL partners with WS in Canada and UA partners with AC in Canada (with both UA and AC being in Star Alliance).

Does AA have significant point-of-sale in Canada, or is AA simply serving some Canadian destinations to remain relevant to its FF base in the U.S.? Were the AA flights to Canada profitable prior to COVID-19, or were these routes unprofitable prior to the pandemic but operated for reasons such as network relevance?

If the AA flights to Canada were profitable and if AA didn't have significant point of sale, how could AA make these routes work profitably?



For years, I believe AA has been *very* strong in Toronto. However, after years of flying the route they dropped YYZ-LAX. That was a little surprising they flew it for years and now only serve a far west as PHX just seasonally.


How do you know they have been very strong in Toronto? My experience on NYC-LGA has been that AA was always the far and way weakest carrier on that route. They just service their hubs like all the other legacies.


The fact that for years AA was the only US legacy carrier on YYZ-LAX and always had a lot of capacity to their hub markets which are far away on 738s such as MIA and DFW.
 
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eta unknown
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Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 5:10 pm

With regards to AA on LAX-YYZ, there may have been a significant amount of QF connection traffic. However, in recent years AC flew daily YVR-SYD/BNE and also had a MEL service that could have eaten into the route performance, especially if the traffic was more Canada than Australia POS.
 
jplatts
Posts: 4525
Joined: Sat Mar 18, 2017 6:42 pm

Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 5:26 pm

2travel2know2 wrote:
IMHO, then there's 0 chance to see WN FLL/MCO/HOU/MDW-YHM and HOU/MDW-YYC.
Bear in mind, WN uses gates which could handle international arriving flights at FLL, HOU and MDW.


WN flights from YYC to the U.S. can arrive at a domestic gate with the CBP border preclearance facility that is there at YYC.

On the other hand, flights to the U.S. from YHM would have to arrive at an international arrivals gate as YHM doesn't have a CBP border preclearance facility.

There are some other Canadian airports without U.S. CBP border preclearance that have nonstop flights to the U.S. such as YLW, YQR, YXE, YTZ, YQB, and YYT.
 
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dabpit
Posts: 963
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Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 9:52 pm

airzim wrote:
joeblow10 wrote:
eta unknown wrote:
I hate to break this to you, but you need to learn how to read between the lines. I have too many stories of airline press releases and CEO interviews spilling garbage to avoid telling the real reasons why a decision was made. Hell, once I worked for my airline's PR dept. and I had to spin something very negative into a positive.


This. Full stop.

How many airlines are (were) doing “well” on US-Canada before COVID hit? F9 tried, Swoop tried, etc... and none really went well. The cost of operating into Canada is enormous and the growth in the customer base is minute. While it would “be nice” for the US consumer to fly into a few cities in Canada, the reality is there are maybe 4-5 cities WN could serve and it’s just not worth their time. Canada is generally not a big tourist draw for US travelers, and the business traffic has plenty of choices on the big guys

On the other hand, there is a reason they are opening BLI - and assuming that goes well, why I would assume they go into BTV and grow BUF. The costs are much lower - and the Canadians are willing to drive a bit to get much better deals.


The real issue is not the cost, it's the distribution of demand in the US. The Canadian carriers have always dominated the trans-border market because Canadian demand is generally concentrated in a few big cities. Therefore AC, and Westjet to a lesser extent, can fly to major and smaller cities in the US from their main operating bases (YYZ, YUL, YVR, YYC,). US carriers generally operate from their hub cities, and serve the reverse on the Canadian side (a few smaller bases that are not served nonstop on the Canadian carriers, (YOW, YWG, the Maritimes, etc.) from their hub cities). So while both sides do benefit, the US market is far larger and more lucrative than the Canadian side. For WN, (and the RES issue was a real problem, but could be solved), I assume they don't see the value trying to compete with the Canadian and already entrenched US carriers, by trying to serve the major Canadian markets from multiple US cities (which is what it would take to get any decent market share). I'm sure the cost doesn't help, but I really think the market distribution is the real issue.


Southwest management has made it clear they are more interested in domestic flights than international. Outside of a few key vacation destinations that attracts folks from the US. Don’t look to them to expand much internationally. So why invest in accepting foreign currency if domestic travel and US based travel demand is your airline’s main focus?
Carpe Diem
 
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albspotter
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Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 10:18 pm

jplatts wrote:
There are a few major Canadian markets such as YYC and YEG that WN couldn't serve from a U.S. airport with both YYC and YEG being too far from any commercial airports in the U.S. and with both YYC and YEG being further from the U.S.-Canada border than YUL, YOW, YYZ, YVR, or YWG.

Montreal is a market that WN is probably better off serving from YUL on the Canadian side instead of PBG on the U.S. side with demand being much stronger to the Montreal metropolitan area on the Canadian side of the border than to the Plattsburgh, NY area on the U.S. side of the border.

BUF serves the Buffalo-Niagara Falls MSA, the Olean μSA, the Jamestown-Dunkirk-Fredonia μSA, and other portions of Western New York and Northwestern Pennsylvania in addition to the Niagara Region of Ontario, but there is a significant amount of population and demand on the U.S. side of the border to support WN service out of BUF.

Essex County, ON (where Windsor, ON is located) is adjacent to Detroit, MI, and there is no nonstop service to any U.S. destinations from YQG as DTW is near the Windsor, ON area. WN already serves DTW on the U.S. side of the border, and there is a significant amount of population and demand on the U.S. side of the border to support WN service out of DTW.

While there is some leakage to BUF from the Toronto area, it might make sense for WN to add service to YYZ with Downtown Toronto being approximately a 2-hour drive from BUF and with YYZ being the largest market in Canada.


closest airport that Southwest serves to YUL, is ALB. And yes we do have people (not many) who drive all the way from YUL/PBG/BTV to take a Southwest flight out of ALB. It seems to Southwest that this is or viable than starting actual services to YUL. However them starting service to BTV to capture more YUL traffic could be possible.
 
MIflyer12
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Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 10:19 pm

Why? Canada is the biggest international market from the U.S. by passenger count. It is distributed across many U.S. cities but there are a few dozen routes that should interest large U.S. carriers.

Toronto is the 2nd-largest non-stop international destination from the U.S., second only to LHR. Bigger than CUN (and how many flights does WN have to CUN?) Bigger than FRA and ICN combined. When WN execs say they have fifty plausible new destinations but Canada isn't a priority they look pretty silly. First rule of corporate communications: Don't lie. Second rule: Don't look stupid.

YVR is the 7th largest intl destination, ahead of AMS.

YUL is 10th - with nearly a million more passengers than HKG.

Calgary is 15th - ahead of PEK and PVG.

WN already serves lots of U.S. leisure destinations that Canadians are known to visit in numbers: LAX, SAN, PHX, PSP, TUS, MCO, FLL, RSW, TPA...

These are not small markets to the U.S. For each of those referenced Canadian airports, Canadian carriers handle a majority (58-73%) of traffic. I repeat what I said above: Canadian carriers serve the markets well. Contrast that with U.S. carriers taking 98% of the traffic to CUN.

https://www.transportation.gov/policy/a ... ics-report
 
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albspotter
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Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 10:25 pm

2travel2know2 wrote:
IMHO, then there's 0 chance to see WN FLL/MCO/HOU/MDW-YHM and HOU/MDW-YYC.
Bear in mind, WN uses gates which could handle international arriving flights at FLL, HOU and MDW.


WN has been axing lots of international FLL routes lately, especially Caribbean ones. I doubt a market like Canada would sell because most Canadian already have miles on Air Canada, WestJet/Swoop, and Air Transat. I feel like the west coast will have a stronger demand than the east coast.
 
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LAX772LR
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Re: Why WN does not fly to Canada --

Fri Apr 30, 2021 11:19 pm

bob75013 wrote:
orlandocfi wrote:
With increased ULCC competition in Canada, I think the opportunity for WN to enter the Canadian market in any significant capacity has already come and gone. .


I remember not too long ago people n A-Net were saying just that about WN service to Hawaii.

:checkmark: :checkmark: That's exactly what they said.

Granted, it's been relatively slow, and IINM WN still has not started service from the largest gateway of them all (LAX)... but it was still able to enter with plenty of capacity from regional markets all throughout the West Coast.
I myself, suspect a more prosaic motive... ~Thranduil
 
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airzim
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Re: Why WN does not fly to Canada --

Sat May 01, 2021 12:44 am

MIflyer12 wrote:
Why? Canada is the biggest international market from the U.S. by passenger count. It is distributed across many U.S. cities but there are a few dozen routes that should interest large U.S. carriers.

Toronto is the 2nd-largest non-stop international destination from the U.S., second only to LHR. Bigger than CUN (and how many flights does WN have to CUN?) Bigger than FRA and ICN combined. When WN execs say they have fifty plausible new destinations but Canada isn't a priority they look pretty silly. First rule of corporate communications: Don't lie. Second rule: Don't look stupid.

YVR is the 7th largest intl destination, ahead of AMS.

YUL is 10th - with nearly a million more passengers than HKG.

Calgary is 15th - ahead of PEK and PVG.

WN already serves lots of U.S. leisure destinations that Canadians are known to visit in numbers: LAX, SAN, PHX, PSP, TUS, MCO, FLL, RSW, TPA...

These are not small markets to the U.S. For each of those referenced Canadian airports, Canadian carriers handle a majority (58-73%) of traffic. I repeat what I said above: Canadian carriers serve the markets well. Contrast that with U.S. carriers taking 98% of the traffic to CUN.

https://www.transportation.gov/policy/a ... ics-report


Sure, but what's the distribution among the US cities? What's the distribution between the carriers? That's why Canada is a tough market for US carriers. WN would have to operate from nearly a dozen US cities with decent frequency to make it worth while. AC only has to worry about YYZ, YCC and YVR and to a lesser extent YUL. Just not worth it.
 
YYZSpotter1991
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Re: Why WN does not fly to Canada --

Sat May 01, 2021 1:27 am

What if WN (or B6) were to fly to Hamilton (YHM)? It qualifies as an official port of entry into Canada (complete with CBSA/TSA customs), it's not very far from downtown Toronto (around an hour's drive), and I'd assume the landing fees aren't nearly as high as YYZ (as it is a smaller international airport). Theoretically these factors should help them break into the market if they wanted to enter it.
Toronto-based flyer since 1997
 
ElPistolero
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Re: Why WN does not fly to Canada --

Sat May 01, 2021 2:27 pm

MIflyer12 wrote:
Why? Canada is the biggest international market from the U.S. by passenger count. It is distributed across many U.S. cities but there are a few dozen routes that should interest large U.S. carriers.

Toronto is the 2nd-largest non-stop international destination from the U.S., second only to LHR. Bigger than CUN (and how many flights does WN have to CUN?) Bigger than FRA and ICN combined. When WN execs say they have fifty plausible new destinations but Canada isn't a priority they look pretty silly. First rule of corporate communications: Don't lie. Second rule: Don't look stupid.

YVR is the 7th largest intl destination, ahead of AMS.

YUL is 10th - with nearly a million more passengers than HKG.

Calgary is 15th - ahead of PEK and PVG.

WN already serves lots of U.S. leisure destinations that Canadians are known to visit in numbers: LAX, SAN, PHX, PSP, TUS, MCO, FLL, RSW, TPA...

These are not small markets to the U.S. For each of those referenced Canadian airports, Canadian carriers handle a majority (58-73%) of traffic. I repeat what I said above: Canadian carriers serve the markets well. Contrast that with U.S. carriers taking 98% of the traffic to CUN.

https://www.transportation.gov/policy/a ... ics-report


Hmmm?

“In 2019, 5.6 million travellers from the United States arrived in Canada by plane”

Similarly:

“In 2019, air travel to the United States by Canadians rose 4.2% to 10.0 million trips.”

https://www150.statcan.gc.ca/n1/daily-q ... 1b-eng.htm

US Domestic traffic:

“Domestic: 811 million passengers, up 4.3% from 2018 (778M)“

Assuming that they’re double counting “arrivals” in the latter set, that’s 405 million.

https://www.bts.gov/newsroom/final-full ... n-airlines

The combined Canada-US market (366 million) generates 15 million passengers.

The US domestic market (328 million) generates 405 million.

That’s a per capita rate of 0.04 against 1.23.

Take Canadians out of that equation and it falls to 0.017.

I don’t care for WN one way of the other, but their calculations don’t suggest stupidity or silliness. Canada is a relatively tiny market and WN’s target clientele tend to travel domestically by a massive factor (1.23 v 0.017).

Given these realities, they’d be stupid/silly to prioritize Canada, rather than the other way round.
 
jplatts
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Re: Why WN does not fly to Canada --

Sat May 01, 2021 11:55 pm

There is an article from FlightGlobal from July 2018 which stated that "'Canada will be absolutely something we are interested in from BWI,' said Gary Kelly, chief executive of Southwest, on future expansion opportunities from the airport in May", and that article can be found at https://www.flightglobal.com/baltimore-airport-plans-five-gate-expansion-for-southwest/128781.article.

WN's plans to expand into Canada was also discussed in the Southwest Fleet/Network Thread, and that discussion can be found at viewtopic.php?f=3&t=1456045&start=1400#p22769127.
 
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qf2220
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Re: Why WN does not fly to Canada --

Sun May 02, 2021 12:45 am

Polot wrote:
The fact that Southwest flies to other countries despite not accepting the local currency demonstrates that is not the reason why WN does not fly to Canada.

It’s because of high taxes. That’s why other LCCs like JetBlue (and ULCCs) have largely avoided Canada too.


Is there some description/comparison of the high taxes somewhere? What taxes in particular are we talking about?
 
777luver
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Re: Why WN does not fly to Canada --

Sun May 02, 2021 5:00 am

qf2220 wrote:
Polot wrote:
The fact that Southwest flies to other countries despite not accepting the local currency demonstrates that is not the reason why WN does not fly to Canada.

It’s because of high taxes. That’s why other LCCs like JetBlue (and ULCCs) have largely avoided Canada too.


Is there some description/comparison of the high taxes somewhere? What taxes in particular are we talking about?


I said the same thing upthread and someone decided I was wrong. It's the extremely high landing fees, nav fees and every other fee that is higher than elsewhere. In fact IATA has called out Canada's govt for making Canada one of the most expensive countries to fly into, the govt sees aviation as a cash cow and won't ever let up on that I don't think. Prints too much money. Its gives our airlines a disadvantage.
 
dstblj52
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Re: Why WN does not fly to Canada --

Sun May 02, 2021 5:06 am

777luver wrote:
qf2220 wrote:
Polot wrote:
The fact that Southwest flies to other countries despite not accepting the local currency demonstrates that is not the reason why WN does not fly to Canada.

It’s because of high taxes. That’s why other LCCs like JetBlue (and ULCCs) have largely avoided Canada too.


Is there some description/comparison of the high taxes somewhere? What taxes in particular are we talking about?


I said the same thing upthread and someone decided I was wrong. It's the extremely high landing fees, nav fees and every other fee that is higher than elsewhere. In fact IATA has called out Canada's govt for making Canada one of the most expensive countries to fly into, the govt sees aviation as a cash cow and won't ever let up on that I don't think. Prints too much money. Its gives our airlines a disadvantage.

Its one of a few countries like russia where nav fees are factored into flight planning their that high
 
777luver
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Re: Why WN does not fly to Canada --

Sun May 02, 2021 5:13 am

dstblj52 wrote:
777luver wrote:
qf2220 wrote:

Is there some description/comparison of the high taxes somewhere? What taxes in particular are we talking about?


I said the same thing upthread and someone decided I was wrong. It's the extremely high landing fees, nav fees and every other fee that is higher than elsewhere. In fact IATA has called out Canada's govt for making Canada one of the most expensive countries to fly into, the govt sees aviation as a cash cow and won't ever let up on that I don't think. Prints too much money. Its gives our airlines a disadvantage.

Its one of a few countries like russia where nav fees are factored into flight planning their that high


Yup. And it's passed down to the consumer which is why it's expensive to fly within Canada. Just to prove the taxes point. AC has said it pays so much taxes that if it were to pick up and move to the US it could save $2 billion a year. That's insane, now granted they didn't give a breakdown but if I'm not mistaken it was mentioned at a meeting of some kind regarding Canada's airlines and competition
 
dstblj52
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Re: Why WN does not fly to Canada --

Sun May 02, 2021 6:20 am

777luver wrote:
dstblj52 wrote:
777luver wrote:

I said the same thing upthread and someone decided I was wrong. It's the extremely high landing fees, nav fees and every other fee that is higher than elsewhere. In fact IATA has called out Canada's govt for making Canada one of the most expensive countries to fly into, the govt sees aviation as a cash cow and won't ever let up on that I don't think. Prints too much money. Its gives our airlines a disadvantage.

Its one of a few countries like russia where nav fees are factored into flight planning their that high


Yup. And it's passed down to the consumer which is why it's expensive to fly within Canada. Just to prove the taxes point. AC has said it pays so much taxes that if it were to pick up and move to the US it could save $2 billion a year. That's insane, now granted they didn't give a breakdown but if I'm not mistaken it was mentioned at a meeting of some kind regarding Canada's airlines and competition

granted nav fees should be high in canada its a lot of dirt to cover in equipment with not that many flights to pay for it but its still a government profit center which it shouldnt be
 
ElPistolero
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Re: Why WN does not fly to Canada --

Sun May 02, 2021 1:58 pm

dstblj52 wrote:
777luver wrote:
dstblj52 wrote:
Its one of a few countries like russia where nav fees are factored into flight planning their that high


Yup. And it's passed down to the consumer which is why it's expensive to fly within Canada. Just to prove the taxes point. AC has said it pays so much taxes that if it were to pick up and move to the US it could save $2 billion a year. That's insane, now granted they didn't give a breakdown but if I'm not mistaken it was mentioned at a meeting of some kind regarding Canada's airlines and competition

granted nav fees should be high in canada its a lot of dirt to cover in equipment with not that many flights to pay for it but its still a government profit center which it shouldnt be


NAV Can is a private, not-for-profit company.

“Canada was the first country in the world to privatize its civil air navigation system, and we remain one of the few fully private companies in the world wholly responsible for air traffic control, flight information and other aeronautical services.

As a not-for-profit corporation, we invest directly in our operations, people and infrastructure to keep Canada’s air navigation system as safe, efficient and innovative as it can be.”

https://www.navcanada.ca/en/corporate/about-us.aspx
 
rbavfan
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Re: Why WN does not fly to Canada --

Sun May 02, 2021 2:55 pm

WN732 wrote:
I am guessing that they are working to remedy this since they are going to need to process CAD if they want BLI to work out.


You realize a lot of Canadians pay in US dollars when they are here. You know, like in Bellingham.
 
ElPistolero
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Re: Why WN does not fly to Canada --

Sun May 02, 2021 2:55 pm

777luver wrote:
dstblj52 wrote:
777luver wrote:

I said the same thing upthread and someone decided I was wrong. It's the extremely high landing fees, nav fees and every other fee that is higher than elsewhere. In fact IATA has called out Canada's govt for making Canada one of the most expensive countries to fly into, the govt sees aviation as a cash cow and won't ever let up on that I don't think. Prints too much money. Its gives our airlines a disadvantage.

Its one of a few countries like russia where nav fees are factored into flight planning their that high


Yup. And it's passed down to the consumer which is why it's expensive to fly within Canada. Just to prove the taxes point. AC has said it pays so much taxes that if it were to pick up and move to the US it could save $2 billion a year. That's insane, now granted they didn't give a breakdown but if I'm not mistaken it was mentioned at a meeting of some kind regarding Canada's airlines and competition


$1 billion, not $2 billion.

“Rovinescu said higher taxes and fees in Canada represent about $1 billion more than if his Montreal-based airline operated as a U.S. carrier with the same volume of traffic.”

https://www.timescolonist.com/business/ ... ve-1.53642

What he didn’t mention is how much that would be offset by lower yields in the exponentially more US competitive market.

Which is the crux of the “high fees and taxes” issue. The Competition Bureau has repeatedly stated that market power in the Canadian market is so skewed against consumers, that it openly supports cabotage. To wit:

“ The Bureau supports cabotage. Permitting foreign air carriers to provide services between points in Canada has the potential to further promote competition on routes within Canada.”

https://www.competitionbureau.gc.ca/eic ... l#section3

The point here isn’t to re-open (any number of) debates on cabotage; it’s a frank admission that - notwithstanding what our friends here want us to believe - Canada’s aviation market is not sufficiently competitive.

“Sufficiently competitive for what?”, you might ask? Fair question. Sufficiently competitive for cuts to taxes and fees to be in the public interest - I.e. beneficial for consumers/taxpayers.

Under current market conditions (or pre-COVID anyhow) - ‘what the market can bear’ - Canadian airlines have no incentive to pass those fees and taxes back to consumers.

Cutting $10 in taxes and fees means $10 less in tax revenue and $10 more in airline profit. Benefit to the consumer/taxpayer = $0.

On balance, then, the taxes and fees - while abhorrent in their own right - are the lesser of two evils because they at least contribute to the “public good”, rather than airline profits.

That’s the reality of protected sectors - government protection inevitably begets more government intervention. Plays out the same way in telecoms here in Canada with all these CRTC rulings on how much carriers can charge to resellers (the government literally sets prices).

All these companies enjoy a good song and dance about taxes, but - when push comes to shove - it would seem that many (all?) prefer higher cost, protected jurisdictions over more competitive ones. A phenomenon associated with rent-seeking, if I’m not mistaken.
Last edited by ElPistolero on Sun May 02, 2021 2:59 pm, edited 1 time in total.
 
Aliqiout
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Re: Why WN does not fly to Canada --

Sun May 02, 2021 6:19 pm

rbavfan wrote:
WN732 wrote:
I am guessing that they are working to remedy this since they are going to need to process CAD if they want BLI to work out.


You realize a lot of Canadians pay in US dollars when they are here. You know, like in Bellingham.

But they are getting the benefit of not paying U.S. international arrival fees and the more competitive American market. When you take away those sweeteners and are competing against a bunch of Canadian and American Airlines that take CAD it doesn't look so smart.
 
Lootess
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Re: Why WN does not fly to Canada --

Sun May 02, 2021 10:35 pm

I don't buy the GDS excuse, Southwest already does publish fares on corporate travel sites like Engencia and Concur to keep them competitive with companies with multiple airline contracts. SWABIZ is just an option nowadays. Basically they have all the tools in-place to implement Canada and probably just need to spend a lot of resources on it which isn't a priority at the moment. I figure it's just a matter of time in this era where they'll want to expand the domestic border since they can't just always rely on corporate travel.
 
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qf2220
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Re: Why WN does not fly to Canada --

Mon May 03, 2021 12:04 am

ElPistolero wrote:
The point here isn’t to re-open (any number of) debates on cabotage; it’s a frank admission that - notwithstanding what our friends here want us to believe - Canada’s aviation market is not sufficiently competitive.

“Sufficiently competitive for what?”, you might ask? Fair question. Sufficiently competitive for cuts to taxes and fees to be in the public interest - I.e. beneficial for consumers/taxpayers.

Under current market conditions (or pre-COVID anyhow) - ‘what the market can bear’ - Canadian airlines have no incentive to pass those fees and taxes back to consumers.

Cutting $10 in taxes and fees means $10 less in tax revenue and $10 more in airline profit. Benefit to the consumer/taxpayer = $0.

On balance, then, the taxes and fees - while abhorrent in their own right - are the lesser of two evils because they at least contribute to the “public good”, rather than airline profits.

That’s the reality of protected sectors - government protection inevitably begets more government intervention. Plays out the same way in telecoms here in Canada with all these CRTC rulings on how much carriers can charge to resellers (the government literally sets prices).

All these companies enjoy a good song and dance about taxes, but - when push comes to shove - it would seem that many (all?) prefer higher cost, protected jurisdictions over more competitive ones. A phenomenon associated with rent-seeking, if I’m not mistaken.


Wouldnt 1bn of savings to AC translate into enough producer surplus to allow another carrier to step up and start competing?
 
airzona11
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Re: Why WN does not fly to Canada --

Mon May 03, 2021 3:11 am

ElPistolero wrote:
MIflyer12 wrote:
Why? Canada is the biggest international market from the U.S. by passenger count. It is distributed across many U.S. cities but there are a few dozen routes that should interest large U.S. carriers.

Toronto is the 2nd-largest non-stop international destination from the U.S., second only to LHR. Bigger than CUN (and how many flights does WN have to CUN?) Bigger than FRA and ICN combined. When WN execs say they have fifty plausible new destinations but Canada isn't a priority they look pretty silly. First rule of corporate communications: Don't lie. Second rule: Don't look stupid.

YVR is the 7th largest intl destination, ahead of AMS.

YUL is 10th - with nearly a million more passengers than HKG.

Calgary is 15th - ahead of PEK and PVG.

WN already serves lots of U.S. leisure destinations that Canadians are known to visit in numbers: LAX, SAN, PHX, PSP, TUS, MCO, FLL, RSW, TPA...

These are not small markets to the U.S. For each of those referenced Canadian airports, Canadian carriers handle a majority (58-73%) of traffic. I repeat what I said above: Canadian carriers serve the markets well. Contrast that with U.S. carriers taking 98% of the traffic to CUN.

https://www.transportation.gov/policy/a ... ics-report


Hmmm?

“In 2019, 5.6 million travellers from the United States arrived in Canada by plane”

Similarly:

“In 2019, air travel to the United States by Canadians rose 4.2% to 10.0 million trips.”

https://www150.statcan.gc.ca/n1/daily-q ... 1b-eng.htm

US Domestic traffic:

“Domestic: 811 million passengers, up 4.3% from 2018 (778M)“

Assuming that they’re double counting “arrivals” in the latter set, that’s 405 million.

https://www.bts.gov/newsroom/final-full ... n-airlines

The combined Canada-US market (366 million) generates 15 million passengers.

The US domestic market (328 million) generates 405 million.

That’s a per capita rate of 0.04 against 1.23.

Take Canadians out of that equation and it falls to 0.017.

I don’t care for WN one way of the other, but their calculations don’t suggest stupidity or silliness. Canada is a relatively tiny market and WN’s target clientele tend to travel domestically by a massive factor (1.23 v 0.017).

Given these realities, they’d be stupid/silly to prioritize Canada, rather than the other way round.


Great analysis. Canada, especially right now, is very Canada centric and well covered.
 
ElPistolero
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Re: Why WN does not fly to Canada --

Mon May 03, 2021 4:09 am

qf2220 wrote:
ElPistolero wrote:
The point here isn’t to re-open (any number of) debates on cabotage; it’s a frank admission that - notwithstanding what our friends here want us to believe - Canada’s aviation market is not sufficiently competitive.

“Sufficiently competitive for what?”, you might ask? Fair question. Sufficiently competitive for cuts to taxes and fees to be in the public interest - I.e. beneficial for consumers/taxpayers.

Under current market conditions (or pre-COVID anyhow) - ‘what the market can bear’ - Canadian airlines have no incentive to pass those fees and taxes back to consumers.

Cutting $10 in taxes and fees means $10 less in tax revenue and $10 more in airline profit. Benefit to the consumer/taxpayer = $0.

On balance, then, the taxes and fees - while abhorrent in their own right - are the lesser of two evils because they at least contribute to the “public good”, rather than airline profits.

That’s the reality of protected sectors - government protection inevitably begets more government intervention. Plays out the same way in telecoms here in Canada with all these CRTC rulings on how much carriers can charge to resellers (the government literally sets prices).

All these companies enjoy a good song and dance about taxes, but - when push comes to shove - it would seem that many (all?) prefer higher cost, protected jurisdictions over more competitive ones. A phenomenon associated with rent-seeking, if I’m not mistaken.


Wouldnt 1bn of savings to AC translate into enough producer surplus to allow another carrier to step up and start competing?


In a healthy, competitive market: yes.

In a duopoly with high barriers to entry (i.e. Canada): TBC, but unlikely

As explained by the Competition Bureau in some detail here: https://www.competitionbureau.gc.ca/eic ... section3_b

Flair - a ULCC - has popped up in response to the billion + dollar profits WS and AC (combined) were wracking up pre-pandemic. It’ll probably be driven out by the incumbents soon enough - skewed market power does that.

The Bureau even identifies tactics they use; to wit

“incumbent air carriers may exercise significant influence on airport authorities and engage in strategic behaviour to limit airport policies that would facilitate entry.”
 
ACDC8
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Re: Why WN does not fly to Canada --

Mon May 03, 2021 9:01 am

MIflyer12 wrote:
WN flies to 14 of the 15 highest cost airports in the U.S. among the largest fifty airports.

And those airports probably have cheaper fees/taxes than the cheapest Canadian airport :rotfl:
A Grumpy German Is A Sauerkraut
 
basspaul
Posts: 68
Joined: Fri Jan 26, 2018 8:18 pm

Re: Why WN does not fly to Canada --

Tue May 04, 2021 2:54 pm

This will be my first comment in one of these "why does airline X not fly to Y" discussions.

Maybe they don't want to? We can discuss economics, logistics, market all day, but ultimately it's the airline's decision.

If a lack of competition was the only reason we have high airfares in Canada, I don't buy it. I'm in YUL and if I look at prices to the south during the winter travel peak, I can choose between AC, Westjet, Transat, Sunwing. Last time I went down south to Cancun in 2019, they were all pretty much the same price. I ended up on Transat because the departure/arrival times were the nicest. I believe they were only about $200 cheaper than AC for 4 seats. If anyone of the carriers could undercut the others by even 20% they would end up owning the market to the south in winter, yet they don't.
 
ElPistolero
Posts: 2349
Joined: Thu Feb 23, 2012 12:44 am

Re: Why WN does not fly to Canada --

Tue May 04, 2021 5:46 pm

basspaul wrote:
This will be my first comment in one of these "why does airline X not fly to Y" discussions.

Maybe they don't want to? We can discuss economics, logistics, market all day, but ultimately it's the airline's decision.

If a lack of competition was the only reason we have high airfares in Canada, I don't buy it. I'm in YUL and if I look at prices to the south during the winter travel peak, I can choose between AC, Westjet, Transat, Sunwing. Last time I went down south to Cancun in 2019, they were all pretty much the same price. I ended up on Transat because the departure/arrival times were the nicest. I believe they were only about $200 cheaper than AC for 4 seats. If anyone of the carriers could undercut the others by even 20% they would end up owning the market to the south in winter, yet they don't.


Could say the same thing about other protected / low competition sectors (banks, telcos): all “same products”, “same prices”. It’s a hallmark of uncompetitive markets.

Either way, WN has probably learnt from VX’s experience. They flew to YYZ from the west coast for a year or two, a decade ago). Fares went down from $1000-$700 in Y IIRC. VX decided it wasn’t worth it, and left. They could have gone down the route WS went against AC on predatory pricing in the Atlantic in the early 2000s or the way Flair went after WS (started in 2018; still ongoing I guess - laid out here: https://www.lexology.com/library/detail ... d6c9bd5339) but decided it wasn’t worth the effort (probably a function of cost and time)

This is all a well-known phenomenon:

“The Pattern Repeats Itself
 Major airline establishes monopoly in a market, and raises prices to confiscatory levels.
 New low-cost airline enters the market, offering low fares.
 Major airline responds by matching fares (even if below cost), sometimes adding aircraft capacity and frequency. Major airline rebates a portion of the ticket price in the form of frequent flyer travel.
 After suffering severe economic losses, new entrant airline withdraws from the market.
 Major airline reduces service and raises prices to confiscatory levels, often higher than those prevailing before the new entrant emerged.”

(Slide 104: https://www.mcgill.ca/iasl/files/iasl/antitrust2017.pdf)

That’s a reflection of competition (or lack thereof). Same reason Virgin mobile, Freedom etc struggled before being bought out/disappearing. Same issue of high barriers to entry and concentration of market power.

WN has more wherewithal than VX but seems to have decided that it isn’t worth it, given that it’s target clientele - Americans - are more likely to visit Germany (6.2 million/2017) than fly to Canada (5 million/2019).
 
casperCA
Posts: 17
Joined: Tue Mar 03, 2020 9:38 pm

Re: Why WN does not fly to Canada --

Wed May 05, 2021 8:00 am

basspaul wrote:
This will be my first comment in one of these "why does airline X not fly to Y" discussions.

Maybe they don't want to? We can discuss economics, logistics, market all day, but ultimately it's the airline's decision.

If a lack of competition was the only reason we have high airfares in Canada, I don't buy it. I'm in YUL and if I look at prices to the south during the winter travel peak, I can choose between AC, Westjet, Transat, Sunwing. Last time I went down south to Cancun in 2019, they were all pretty much the same price. I ended up on Transat because the departure/arrival times were the nicest. I believe they were only about $200 cheaper than AC for 4 seats. If anyone of the carriers could undercut the others by even 20% they would end up owning the market to the south in winter, yet they don't.


Perhaps an argument could be made that domestically there is a lack of competition, but trans-boarder is wide open to every Canadian and US airline. There are more airlines that can operate trans-boarder than domestically in the US or domestically in Canada. I agree, they are not there because they don't want to.

If they start one of these routes it is going to be a once a day or twice a day service. That is not their approach. They would be going into a market with few members of their loyalty program where they are going to have to sell and explain all the weird things about their business model starting with boarding and seat assignment. Canada and the US have different consumer protection rules; they would need to review and introduce exceptions into their customer service rules. Likely even more on the operation side to dispatch a flight out of Canada.

For AA international complexity is just part of doing business. The Southwest DNA is all about removing complexity from their operation.

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