March 30, 2010, Calgary – Air Canada will begin flying directly between the heart
of the Canadian oilpatch and Tokyo starting Saturday, in a move that
underlines the carrier's quest to grow its global reach in the face
of fierce competition.
"We launched this route at a time of recession when everyone
elsewhere in the world is cutting back capacity,'' Air Canada chief
executive Calin Rovinescu said of the Calgary-Tokyo route on Friday.
"Our view was the second we started seeing stabilization, we're
going to go there,'' he told a Calgary business audience.
"There's a lot of people who would sooner, when it comes time to
take risk, go and hide in a bunker. Well, that's not what Air Canada
is going to do."
Rovinescu made his remarks on the home turf of Air Canada's main
rival: WestJet Airlines Ltd. (TSX:WJA), which is aggressively trying
to grow its domestic and international reach.
WestJet's incoming chief executive, Gregg Saretsky, has said his
airline intends to grow its domestic market share from 38 to 50 per
cent in the coming years. It also aims to have a foothold on every
continent through deals with international carriers that will allow
travellers to cross easily from one airline's network to another's.
Rovinescu called Saretsky _ a 25-year industry veteran _ a ``good
guy," but declined to elaborate further on the management change at
WestJet.
"My belief is if you've got strong competitors, you've got a
strong industry," he said.
Saretsky will take the helm of WestJet on April 1 from Sean
Durfy, who earlier this month said he would be retiring from the
airline so he can spend more time with his family.
The Calgary-Tokyo route will not represent a huge amount of
capacity for Air Canada, the country's biggest airline, but it
nonetheless seems like a smart move, said AirTrav Inc. president
Robert Kokonis.
"Calgary is obviously increasing in significance beyond just a
pure oil and gas hub. The economy has developed," he said.
"I think they have a pretty reasonable shot of making a go of
it."
Banff, Alta., a popular destination for Japanese tourists, is
also just a 90-minute drive west of Calgary.
Historically, Air Canada has trouble turning a profit from its
day-to-day operations _ something that the Montreal-based airline
appears to be working on fixing, Kokonis said.
Taking risks by adding new routes can help _ but there's such a
thing as being too gutsy, he added.
"A lot of airline CEOs, they get a whiff of jet kerosene and it
goes to their brains and they over-expand or they add too many new
aircraft. They lose focus of where they should be going,'' Kokonis
said.
For the Calgary-Tokyo route, Air Canada weighed potential demand,
airport fees and feedback from Alberta's tourism industry.
"So long as I'm in this seat, I'm going to look at all risks
that are worthy,'' Rovinescu said.
When asked after his speech whether Air Canada planned any direct
flights from Calgary into China or Latin America, Rovinescu said the
numbers just didn't add up at the moment.
"We need to have sufficient connecting service on all of these
routes. That is the lifeblood of any routes," he said.
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