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Airline Insider-July/August 06

Industry News.


September 27, 2007
By Brian Dunn

Topics






COSTLY LANDINGS

With
fuel prices hammering the bottom line of airlines, that old thorn of
airport landing fees was again front and centre at ACE Aviation
Holdings' annual meeting in Montreal where Air Canada boss Robert
Milton called on Ottawa to lower the rent it collects from Canada’s
airports.

And with Toronto’s Pearson International being the
most expensive airport to land at, ahead of Osaka’s Kansai airport by a
hefty 45.5 per cent, according to the Air Transport Research Society,
Milton said U.S. airports such as Detroit and Cleveland are luring
Canadian travelers south where landing fees and therefore ticket prices
are lower. And now that Air Canada and WestJet have settled their feud
over corporate espionage, Milton wants to form a common front with
WestJet head Clive Beddoe to lobby Ottawa to reduce airport rents.

Despite
higher fuel prices and high landing fees, Milton told shareholders he’s
optimistic about revenue growth this year adding that Air Canada will
benefit from simplified pricing and discount options in addition to an
expanding route structure. Profitability at ACTS, its maintenance
division should also improve, after it signed major contracts with
Delta Airlines, US Air and Jet Blue Airways.

CANJET FOCUSES ON THE EAST
CanJet
Airlines will terminate service between Toronto and Calgary in
September, ending the carrier’s operations in Western Canada. For now,
the airline is focusing its network in Eastern Canada. It has also
warned staff that it may be forced to slow its growth due to high fuel
prices and recent decisions by its flight attendants and pilots to join
unions.

In a letter to employees, chief operating officer Julie
Gossen says these changes will require CanJet to “rethink and reshape
our strategic business plan”. On the positive side, CanJet has been
given a boost after Ottawa turned to it to help transport civil
servants. Once the domain of Air Canada, both WestJet and now CanJet
have signed a discount fare agreements with Ottawa which could reduce
Air Canada’s estimated 80 per cent share of the $170 million business.

In
addition, CanJet and Harmony Airways of Vancouver are cross-selling
tickets to offer passengers coast-to-coast travel with Toronto as the
transfer point. Under the agreement, each carrier will sell the other’s
tickets on select routes at a 10 per cent discount. CanJet will sell
seats on Harmony’s 10 weekly flights between Toronto and Vancouver to
its passengers, while Harmony will offer its passengers CanJet tickets
from Toronto to Deer Lake, Nfld., St John’s, Halifax and Moncton.

EXELTECH SIGNS WITH CANJET
CanJet
has signed ExelTech Aerospace to a long-term maintenance, repair and
overhaul contract for its fleet of nine Boeing 737-500 aircraft. Under
the agreement, ExelTech took the carrier’s first aircraft into its
Quebec City hangar in June where it performed heavy maintenance checks,
including major structural inspections. Exel- Tech is also providing
ondemand line maintenance services to CanJet at Montreal’s Trudeau
International Airport.

“I am pleased that Canada’s third largest
airline has selected ExelTech as its maintenance provider,” said
ExcelTech’s president and CEO Derek Nice. “Having CanJet’s people place
their confidence in the skills and dedication of our workforce is a
source of pride for everyone at ExelTech.” Financial terms were not
disclosed.

HARMONY GOES REGIONAL
Harmony Airways has
introduced its first regional jet service as it considers acquiring
smaller aircraft to support expansion. The carrier, which operates
Boeing 757 aircraft, has contracted Voyageur Airways of North Bay to
operate a single 50-seat Bombardier CRJ100 between Vancouver and
Calgary. Harmony had originally scheduled the service to launch on May
14, but was delayed until June 15, according to Harmony CEO Gary
Collins.

Collins confirms that management will use data
collected from this service to determine if regional jets will be
introduced to the Harmony fleet. He stresses, however, that plans are
still in the early stages, and that no commitment has been made to
Bombardier or Embraer. Collins said 70- to 110-seat jets are a
cost-effective way for the airline to build a domestic network to feed
planned Asian routes.

Voyageur operates a fleet of Bombardier
Dash 7 and Q300 turboprops, as well as Raytheon Beech King Air 100s and
200s. Last year, it launched Dash service between Mont-Tremblant, QC
and Toronto Pearson.

JAZZ SERVING SECONDARY PAIRINGS
Jazz
Air is expanding beyond its traditional role this summer as an Air
Canada feeder by offering service to more secondary Canadian markets
and bypassing the traditional hubs of Vancouver, Calgary and Toronto.
The city pairings include E d m o n t o n – K e l o w n a , Wi n n i p
e g – L o n d o n , Edmonton-Victoria, Calgary- Yellowknife and
Calgary- Comox, using 50-seat Bombardier CRJ-200s. Jazz currently
operates a fleet of 136 aircraft, including 15 75- seat CRJ-705s which
were added last year.

OPEN SKIES WITH UK
Canada and the
U.K. have signed an Open Skies deal under which, beginning in
September, Canadian airlines will be able to offer unlimited flights to
third countries via the U.K. and vice versa. The two countries will
also be free of restrictions on fares when carrying traffic through
their own cities to the third country. More than two million passengers
a year fly between the two countries.

PORTER CHOOSES FLIGHT DECK RESOURCES
Porter
Airlines has contracted Flight Deck Resources to provide Class 2
electronic flight bag (EFB) systems for its fleet of 10 Bombardier Q400
aircraft. EFBs increase situational awareness in-flight with en-route,
approach charts, moving map display and graphical weather information.
In addition, it improves productivity by enabling pre-flight planning
and efficient access to up-todate aircraft documentation, checklists,
and operational planning information.

“[Flight Deck Resources]
has developed a turnkey EFB solution that is the right fit for our
launch later this year,” said Porter president and CEO Robert Deluce.
“Our goal is to use available technology with a clear focus on safety,
operational efficiency and operating cost reductions.”


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