Advertisement
Get Your FREE E-Newsletter
LOGIN | Welcome, Guest.
  ABOUT US   |   CONTACT US   |   SUBSCRIPTION CENTRE   |   ADVERTISE   |   SITEMAP
Brian Dunn Airline Insider-Sept/Oct 06
Written by Brian Dunn   





JAZZ BACKS AWAY FROM CITY CENTRE
Air Canada Jazz’s plans to resume operations at Toronto City Centre Airport (TCCA) on August 28, with a beefedup service to Ottawa and a reinstated service to Montreal, have been put on hold.

That’s because the Toronto Port Authority (TPA), part operator of the airport, denied approval of a sublease between Jazz and Stolport Corp. from where the airline planned to operate. The TPA refused approval because it already has an agreement with Porter Airlines which is due to fly the routes.

There seems to be a lot of bad blood between Jazz and the TPA and Porter with all sorts of accusations flying back and forth. For example, in a letter to Jazz president and CEO Joseph Randell, the carrier was chastised for reducing service or completely eliminating some routes from TCCA before Porter announced plans last Feb. 1 to launch a new service. It was also raked over the coals for allowing “its facilities to become outdated” and “flatly refused to participate in the revitalization of the TCCA.”

Jazz denied all those allegations and said it was forced to delay resumption of operations at TCCA due to the “intransigent actions” of the TPA, but “remains committed to returning to the Toronto City Centre Airport as soon as possible.”

And how does Porter Airlines feel about all this? “Porter is willing to make the type of long-term commitment to the airport that Air Canada never has,” said airline founder and boss Robert Deluce. “We are the only scheduled airline in the last 20 years willing to make TCCA its operating base.” Deluce said he wasn’t surprised when Air Canada announced plans to rejuvenate its operations out of TCCA, noting it was built into Porter’s business plan. “That’s so like Air Canada, to do nothing for years and years and then when someone else identifies a market as being worthwhile, they suddenly become protective about it.”

Jazz was planning to offer 10 return trips to Ottawa and seven to Montreal during the week and three return trips on Sunday to Ottawa and two to Montreal. It suspended operations earlier this year after receiving an eviction notice from City Centre Aviation Limited (CCAL) for renovations on the terminal building. At the time, Jazz operated flights between TCCA and Ottawa five days a week and was planning to augment its service to Ottawa and resume flights to Montreal.

Porter Airlines, which owns CCAL, plans to launch short-haul Bombardier Q400 service this fall from TCCA, ultimately serving 17 cities in Quebec and Ontario, six American states and Washington, DC, all within 90 minutes flying time or 800- kilometre radius of TCCA. It expects to have four Q400s in service by year-end and a total of 10 by the end of next year. It also has an option on another 10 aircraft. Porter’s initial service will be Toronto-Ottawa with 10 return flights a day, followed by Montreal, New York and Chicago.

AIR CANADA UNION AWARDED RAISES
An arbitrator has awarded small pay raises to 5,540 unionized sales and customer service employees and crew schedulers at Air Canada. The workers, represented by the Canadian Auto Workers union, got a 1 per cent hike in July and will get another 1.75 per cent next July and again in July 2008. Talks with other airline employees are either ongoing or have moved to arbitration.

The airline and union went to salary arbitration as part of an agreement that lifted Air Canada out of bankruptcy protection. The agreement allowed workers to recover some of the wages they lost during restructuring, once the airline returned to profitability, but does not allow workers to strike.

WESTJET’S NET INCOME SOARS
WestJet Airlines recorded second-quarter net income of $22.4 million, a 10-fold increase from the $2.3 million posted in the same period last year. The increase was produced on a 30.3 per cent growth in revenue to $425.4 million, while expenses increased 20.9 per cent to $386.8 million. Secondquarter operating income rose to $38.6 million from the $6.6 million recorded a year ago.

WestJet’s second-quarter capacity was a little over three billion available seat miles, an 18.5 per cent year-on-year growth, while traffic increased 29.3 per cent to 2.326 billion revenue passenger miles.

“We have completed a profitable first six months of business for 2006 with strong second-quarter results. Among our many accomplishments, a significant highlight for this period was our ability to continue to add capacity and still generate increased, and in most cases record-breaking, load factors,” said president and CEO Clive Beddoe.

“Of greater significance, we transitioned 13.5 per cent of our total capacity during the three-month period ending June 30 from our winter schedule of charter and sun destinations to our Canadian domestic operations. This represents the largest single increase in domestic flying in our 10-year history and the largest seasonal reallocation of capacity we have ever undertaken.”

However, there are still some potential problems. “The cost of jet fuel obviously remains a concern to us, however we are able to absorb these exceptionally high prices as our fuel costs have been offset by the strong Canadian dollar and the lower fuel burn associated with our young fleet of [Boeing 737] aircraft,” said Beddoe. “Our accomplishments and growth will carry into the next three months, which is traditionally our strongest quarter for domestic travel.”

WestJet plans to lease four Boeing 737s from Singapore Aircraft Leasing Enterprise. The airline will take delivery of one 737-700 in November 2007, one 737-800 in the next four months, and two more - 700s in second quarter of 2008.

WestJet also has options on three -700s and one -800 for delivery in 2009. The - 700s can be changed to -800s. The deal is subject to a number of unspecified conditions.

“As WestJet successfully executes its strategic plan, the delivery of these aircraft is key to our growth in the coming years. The foreseeable future indicates many opportunities for increasing frequency and expansion into new routes and new destinations,” said Sean Durfy, the airline’s executive vice-president, marketing, sales and airports.

WestJet currently operates 57 aircraft. With scheduled deliveries, this will increase to 76 B737s by the end of 2008.

ACE NET INCOME UP TO $236 MILLION
Air Canada’s parent, ACE Aviation Holdings Inc. (ACE), also turned in an impressive performance, with net income of $236 million for the second quarter compared to net income of $169 million in the second quarter of 2005. ACE reported operating income of $181 million for the quarter, despite a fuel expense increase of $101 million or 19 per cent over the second quarter of 2005. Operating income increased by $3 million compared to the second quarter of 2005. Net income includes foreign exchange gains of $107 million (2005 losses of $53 million).

The 2006 quarter also included a pre-tax gain of $100 million ($83 million after tax) on the sale of 3.25 million shares of US Airways. The non-recurring items in the 2005 quarter, principally related to the initial public offering of Aeroplan, amounted to $161 million ($143 million after tax).

Passenger revenues were up $188 million or 9 per cent reflecting increases in all markets due to a 3 per cent improvement in yield and a 5 per cent growth in passenger traffic, on a capacity growth of 3 per cent. Unit cost, as measured by operating expense per available seat mile rose 6 per cent from the same period in 2005. Excluding fuel expense, unit cost was up 4 per cent and included the effect of growth in non-ASM producing businesses.

SKYSERVICE GETS SKED LINK TO PORTUGAL
Skyservice Airlines has received government authority to introduce scheduled international service to Portugal. The designation, announced by Transport Canada, came three weeks after Canada signed a liberalized aviation agreement with Portugal that allows passenger carriers from both countries to have unlimited frequencies and unrestricted access to all markets.

“The designation of Skyservice as a scheduled carrier provides greater certainty for the carrier, while ensuring choice for travellers between Canada and Portugal. I am pleased that the new agreement with Portugal is creating new opportunities,” said Transport Minister Lawrence Cannon.

Skyservice already operates a charter service to Portugal and will turn some of those flights to Lisbon and Faro into scheduled service once a week. The airline operates a combination of Airbus A319s, A320s and Boeing 757-200s. Last year, Transport Canada granted the airline scheduled rights to serve Moscow, but no startup has been set, according to an airline spokesperson.
 
[ Back ]