Seat sale way looms as bookings drop

Seat sale air war looms as bookings drop

WestJet serves up $59 Vancouver-to-Calgary fare that Air Canada matches

Bruce Constantineau, Vancouver Sun

Published: Thursday, July 03, 2008

Canadians can expect more airline seat sales this year after WestJet and Air Canada served up $19 Toronto-to-Montreal and $59 Vancouver-to-Calgary fares Wednesday.

Airline industry analyst Rick Erickson said those are the sharpest domestic discounts the industry has seen in two years and expects there's more to come.

"What we can take from this is that demand is off and high prices and fuel surcharges are a big part of that," he said in an interview.

Carriers' forward bookings can't be that strong, otherwise they wouldn't be doing this."

WestJet's regular price for a Vancouver-to-Calgary flight in early August was $195 on Wednesday.

Erickson noted the monthly load factor -- the percentage of seats that are filled in a plane -- at WestJet fell from 86.6 per cent in March to 79.5 per cent in May, still a healthy figure but the decline is a worrying trend.

"A drop of six or seven per cent doesn't sound like much, but that's a lot when you consider almost all of that [lost] traffic is absolute gravy to the carrier that goes straight to the bottom line," he said.

WestJet fired the first seat-sale shot Wednesday, offering $19 fares for flights between Toronto and Montreal and between Toronto and Ottawa. The airline also announced a $59 fare for flights between Calgary or Edmonton and Vancouver or Abbotsford.

Flights must be booked by today for travel until Sept. 30, and the number of seats at the discounted fare is limited.

The one-way fare price does not include taxes, fees and surcharges, so the $59 Vancouver-to-Calgary fare works out to $133.

Air Canada quickly matched the WestJet prices.

"We aim to be price competitive in all markets we serve and we are responding with competitive fares on select flights," Air Canada representative Angela Mah said in an interview. "The airline business is very competitive and we have always said we will offer competitive low-fare options."

WestJet representative Richard Bartram said the airline is pleased with its recent load factors and is adding capacity into the market.

"A few times a year, we will have a significant discount into the market to help stimulate travel for a particular time and that's what we're doing here," he said in an interview.

Bartram said seat sales will continue as the airline tries to strike a balance between profitability and stimulating demand by allowing people to travel at reasonable rates. He said WestJet remains very concerned about the negative impact of high fuel surcharges.

"We're confident people will continue to travel but we know they will look for that low-fare leader or that cost advantage when they book their seats and I think that bodes well for WestJet," Bartram said.

While Air Canada recently cancelled several domestic and international routes to cut costs, Erickson noted WestJet recently announced the addition of new routes, including Calgary to Kamloops.

"It's also continuing its strategy of adding sunspot destinations and I don't see that being as badly hurt this winter," he said. "The strong Canadian dollar means we can still get reasonable value on a trip to the Caribbean or Latin America."

The Air Canada cutbacks are expected to slash up to 2,000 jobs across Canada. Mah said the airline is discussing "mitigation options" with unions. Details of the job cuts are still not available.

The Air Canada route cancellations and suspensions include Calgary-Prince George, Calgary-Comox, Vancouver-Sacramento, Vancouver-Osaka and Toronto-Kelowna.

bconstantineau@png.canwest.com

More surprises. The Air Canada BOD looking to the employees for mitigation of loss. 2009 right around the corner, 2000 jobs cut and capacity cuts. Yep , now is a great time to negotiate new collective agreements. Even better, get the employees (Pilots) fighting among themselves and that will bear even greater fruits for the BOD. Here we go again.

Seat sale air war looms as bookings drop

WestJet serves up $59 Vancouver-to-Calgary fare that Air Canada matches

Bruce Constantineau, Vancouver Sun

Published: Thursday, July 03, 2008

Canadians can expect more airline seat sales this year after WestJet and Air Canada served up $19 Toronto-to-Montreal and $59 Vancouver-to-Calgary fares Wednesday.

Airline industry analyst Rick Erickson said those are the sharpest domestic discounts the industry has seen in two years and expects there's more to come.

"What we can take from this is that demand is off and high prices and fuel surcharges are a big part of that," he said in an interview.

Carriers' forward bookings can't be that strong, otherwise they wouldn't be doing this."

WestJet's regular price for a Vancouver-to-Calgary flight in early August was $195 on Wednesday.

Erickson noted the monthly load factor -- the percentage of seats that are filled in a plane -- at WestJet fell from 86.6 per cent in March to 79.5 per cent in May, still a healthy figure but the decline is a worrying trend.

"A drop of six or seven per cent doesn't sound like much, but that's a lot when you consider almost all of that [lost] traffic is absolute gravy to the carrier that goes straight to the bottom line," he said.

WestJet fired the first seat-sale shot Wednesday, offering $19 fares for flights between Toronto and Montreal and between Toronto and Ottawa. The airline also announced a $59 fare for flights between Calgary or Edmonton and Vancouver or Abbotsford.

Flights must be booked by today for travel until Sept. 30, and the number of seats at the discounted fare is limited.

The one-way fare price does not include taxes, fees and surcharges, so the $59 Vancouver-to-Calgary fare works out to $133.

Air Canada quickly matched the WestJet prices.

"We aim to be price competitive in all markets we serve and we are responding with competitive fares on select flights," Air Canada representative Angela Mah said in an interview. "The airline business is very competitive and we have always said we will offer competitive low-fare options."

WestJet representative Richard Bartram said the airline is pleased with its recent load factors and is adding capacity into the market.

"A few times a year, we will have a significant discount into the market to help stimulate travel for a particular time and that's what we're doing here," he said in an interview.

Bartram said seat sales will continue as the airline tries to strike a balance between profitability and stimulating demand by allowing people to travel at reasonable rates. He said WestJet remains very concerned about the negative impact of high fuel surcharges.

"We're confident people will continue to travel but we know they will look for that low-fare leader or that cost advantage when they book their seats and I think that bodes well for WestJet," Bartram said.

While Air Canada recently cancelled several domestic and international routes to cut costs, Erickson noted WestJet recently announced the addition of new routes, including Calgary to Kamloops.

"It's also continuing its strategy of adding sunspot destinations and I don't see that being as badly hurt this winter," he said. "The strong Canadian dollar means we can still get reasonable value on a trip to the Caribbean or Latin America."

The Air Canada cutbacks are expected to slash up to 2,000 jobs across Canada. Mah said the airline is discussing "mitigation options" with unions. Details of the job cuts are still not available.

The Air Canada route cancellations and suspensions include Calgary-Prince George, Calgary-Comox, Vancouver-Sacramento, Vancouver-Osaka and Toronto-Kelowna.

bconstantineau@png.canwest.com

Comparing March loads to May loads. Tsk tsk.

That's about as relevant as saying that the sales of watermelon in Canada dropped 50% between the first week of August and the first week of November.

Erickson is a beauty......

... another Erickson:

Airline industry analyst Rick Erickson said those are the sharpest domestic discounts the industry has seen in two years and expects there's more to come.

Do you suppose that the $19 plus the new $20 fuel surcharge means that the fare is the same as the 'sale price' a few months ago?

More surprises. The Air Canada BOD looking to the employees for mitigation of loss. 2009 right around the corner, 2000 jobs cut and capacity cuts. Yep , now is a great time to negotiate new collective agreements. Even better, get the employees (Pilots) fighting among themselves and that will bear even greater fruits for the BOD. Here we go again.  

bah.... What's the point in worrying?

If they want lower wages, let them have a go at it.... They are having a though time finding people as it is. A card carrying plumber or electrician makes more money then an A.M.E in Québec . Another salary drop and AC will see how mobile it's young skilled work force is.

Maybe with Westjet's growth we can all go work there and feel like we make a difference instead of being an unrecognized number, in an organization that seems incapable of improving itself.

If Bean's rhetoric is true,unless fuel prices drop dramatically...it's just a mater of time until AC has to scale back to a greater extent.

bah.... What's the point in worrying?

If they want lower wages, let them have a go at it.... They are having a though time finding people as it is. A card carrying plumber or electrician makes more money then an A.M.E in Québec . Another salary drop and AC will see how mobile it's young skilled work force is.

Maybe with Westjet's growth we can all go work there and feel like we make a difference instead of being an unrecognized number, in an organization that seems incapable of improving itself.

If Bean's rhetoric is true,unless fuel prices drop dramatically...it's just a mater of time until AC has to scale to a greater extent.

Mrlupin hits it right on the button, thats the way many of us feel! You want lower wages? Have them cause we arent gonna be around to work for peanuts. The countdown till 2009 has already begun for most of us, many of the older members have already begun to retire and many planning to retire just before our contract expires. Add a pay cut or no significant pay increase you will see a lot of us younger employees leaving for good.

I just had the pleasure to meet a fantastic Quebec AME that came from AC to WestJet in YUL. He had done some engine work and came in the jumpseat for an engine run before we took the airplane back to service. If they're all like this guy then bring em on'

I just had the pleasure to meet a fantastic Quebec AME that came from AC to WestJet in YUL. He had done some engine work and came in the jumpseat for an engine run before we took the airplane back to service. If they're all like this guy then bring em on'

I think you would find that most AMEs are like that Spinnaker, we just want to get the airplane out serviceable.

The large dominant Canadian Airline I work for is about as nimble as a blue whale lying on the beach. It should take a hard long look at its processes and internal bureaucracy before it goes to it's employees and ask for more cuts.

The Quebec job with WestJet, is a dream job.... I would leave AC in a heart beat for an opportunity to be part of the WestJet team in Québec city. Who knows.... if Bean's prediction pan out.... I might have to send out a resumé to WestJet.

Éric

How does AME compensation compare between AC and WS?