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Features Airlines
Airline Insider-July/August 05

Harmony in China, CanJet’s route expansion, and more

September 28, 2007  By Brian Dunn

Harmony Airways has been given the green
light by Ottawa, along with Air Canada, to operate scheduled service
between Canada and China.

Air Canada already serves China, but
is being allocated five more flights a week to accommodate new service
between Toronto and Beijing and three flights per week for new cargo
service between Toronto and Shanghai.

As part of the new
service, Air Canada has introduced cargo service between Toronto and
Calgary using an MD-11 freighter aircraft capable of carrying 84 tonnes
of cargo. Four of the carrier’s five weekly flights from Toronto to
Shanghai will be via Calgary.

Meanwhile, Vancouver-based Harmony
has signed an agreement with Japan Air Lines to participate in its
frequent-flyer program. The JAL frequent flyer will now have the option
to redeem JAL points for use on Harmony flights. The booking is made
through the JAL Los Angeles offices and JAL will pay Harmony for each
seat used. Harmony has also introduced a Business Class product on its
Boeing 757s.


Harmony plans to introduce service to China through
a codeshare agreement with China Eastern Airlines later this year and
expects to launch daily service to China next summer using its own
aircraft. The China routes will help Harmony grow beyond its current
fleet of three Boeing 757-200s, said Gary Collins, the airline’s CEO.
He said Harmony is negotiating to acquire a fleet of six to eight
Airbus A350s or Boeing 787s for service to China.

In addition,
the airline was scheduled to acquire a fourth 757-200 in June for
expanded service that will see Harmony launch twice-weekly service from
Calgary to Honolulu in December and a weekly service between Calgary
and Maui.

Canada Technical Services’ objective of becoming a Tier One
maintenance, repair and overhaul operator within the next five years
has been given a major boost with its recent signing of a $1.5- billion
maintenance contract with US Airways-America West.

To seal the
deal, Air Canada parent ACE Aviation Holdings is investing $95 million
for a 7% stake in the newly merged airline which will give it expanded
gate access at some US airports which in turn should help grow its
passenger traffic south of the border. In addition, Air Canada expects
to create 700 aircraft servicing jobs in Montreal, Winnipeg, Calgary
and Vancouver.

ACTS already employs more than 3,600 workers and
its revenue could exceed $1 billion next year, with less than half
coming from Air Canada. Earlier this year, Air Canada signed a
five-year, US$300-million maintenance contract with Delta Air Lines to
service over 200 Boeing 757s and 767s.

The division now has
about 100 customers, including BWIA West Indies Airways, JetBlue
Airways, Transat A.T., UPS and Lufthansa’s regional City Line. The
latest deal with US Airways-America West involves servicing a combined
fleet of 361 Boeing and Airbus aircraft.

To become a Tier One
MRO operator, ACTS needed to expand globally and increase its annual
revenue beyond its current $700 million which it just did with its
latest coup. The ACE unit’s goal is to become a significant player in
the global MRO marketplace by capturing between 10% and 15% of an
estimated $49-billion market, said ACTS president Bill Zoeller.

Airlines is now offering live in-flight Bell Express Vu satellite-TV
service on all 39 of its Boeing 737-700 aircraft. The free service,
which uses equipment from Live TV installed in each seatback, allows
passengers to surf up to 24 channels.

The airline has also
applied to Transport Canada to certify extended twin-engine operations
allowing it to start flying its Boeing Next-Generation 737s on longer
routes such as Halifax-London or Vancouver-Hawaii.

If its
application is accepted, WestJet will examine the possibility of
operating its 737-700s and 800s on routes as long as six hours over the
Atlantic and Pacific oceans. The carrier added that its fleet of 18
737-200s will be retired within a year. South of the border, WestJet
has eliminated its service between Toronto and New York/La Guardia due
to its inability to secure additional gates at La Guardia. The carrier
began the service last September.

WestJet will redeploy the
aircraft used on the route for daily seasonal service between Toronto
and Victoria which runs between July 5 and September 5.

Canada could be the launch customer for Aviation Partners Boeing
blended winglets on the Boeing 767- 300ER, which would enhance fuel
burn by about 5%.

The airline hopes to install the winglets as
part of a plan to rejuvenate its fleet of 43 767-200s and 767-300s that
Air Canada plans to operate until deliveries of its Boeing 787s begin
in 2010.

Air Canada said it will spend about $5 million per
aircraft on refurbishing the 767’s interiors, installing in-flight
entertainment systems and adding winglets.

The carrier hopes to offset the cost of the fleet renewal plan by selling its 767s, Airbus A330s and A340s.

Airlines has launched twice daily service between Toronto and Calgary
and once daily between Toronto and Vancouver as part of a new phase of
expansion into Western Canada. “Our flight schedule has been developed
to create convenient connections in both directions between Calgary and
Vancouver and the key Atlantic Canada centres of Halifax, Moncton, St.
John’s and Deer Lake,” said Chris Kelly, director of strategic planning
at CanJet.


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