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Airline Insider: May/June 2008

Airline insider

June 6, 2008  By Brian Dunn

WestJet will pose competition to Air Canada, which currently links Barbados from Toronto and Montreal.

Barbados Opens Skies to WestJet
WestJet is still considering which Canadian cities it will connect to Barbados after receiving regulatory approval to operate scheduled service to the Caribbean island. Service to Barbados potentially fits a number of cities, according to Bob Cummings, executive VP, guest experience and marketing. While seasonal Barbados flights is likely the way service will start initially, year-round service is not out of the question, he added. The carrier’s regulatory approval was facilitated by the “open-skies-type” accord recently brokered by the two countries. It is part of the Boeing 737 operator’s larger strategy to boost service to the Caribbean and Mexico. WestJet will pose competition to Air Canada, which currently links Barbados from Toronto and Montreal.

Air Canada plans to use 120-seat Airbus A319s on the route.

More Big Apple Flights for Air Canada

Daily nonstop fights between Calgary and New York Newark Liberty International airport by Air Canada are scheduled to debut June 16 to complement the carrier’s existing daily nonstop service from Calgary to New York’s JFK airport. The carrier plans to use 120-seat Airbus A319s on the route featuring executive and economy classes.

Star Alliance carrier Air Canada is competing with SkyTeam member Continental Airlines in the new market. The Houston-based carrier flies between the two destinations using a 104-seat Boeing 737-500. Once the new service starts, Air Canada said it will offer 41 daily fights from Canada to the New York-New Jersey area this summer.


Third major delay for Boeing’s 787 Dreamliner

Boeing’s Dreamliner Launch Postponed
Boeing recently announced a third major delay for its 787 Dreamliner program that will postpone first flight and first delivery by about another six months, as well as cutting planned aircraft production in 2009 by more than 75%. The move could impact the delivery schedule for Air Canada, North America’s largest airline customer for the 787 with 37 of the aircraft on order.

“Boeing has advised us of the delay to the 787’s launch date, but the impact to Air Canada’s scheduled deliveries is not yet determined,” said Air Canada spokesman Peter Fitzpatrick.

The aircraft maker blamed the most recent delay on outsourcing problems from contractors in several countries, unexpected rework tasks and the addition of more time to complete flight tests.

In addition, Boeing has delayed first delivery of the stretched 787-9 by two years to 2012. This means the shortened 787-3 will become the second version of the baseline design to enter service.

“Our revised schedule is built upon an achievable, high-confidence plan for getting us to our power-on and first-flight milestones,” Boeing Commercial Airplanes CEO and President Scott Carson said in a company statement.

The revision means Boeing will deliver only 25 aircraft in 2009, rather than the original plan that called for 112 aircraft during the first year of production.

“As a result of that assessment, the first-year delivery plan…will be followed by a more gradual ramp up to full-rate production than previously planned,” Boeing’s statement adds.


Porter currently operates six Q400 with four more coming in the next year.

Q400 Furthers Porter Expansion
Porter Airlines has converted two of 10 options it has with Bombardier for 70-seat Q400 turboprops. It ordered 10 Q400s in 2006, along with options for 10 additional aircraft. Porter currently operates six Q400s, and recently the carrier’s executives said four additional aircraft are expected for delivery during the next 12 months to support network expansions from Toronto to Boston, Chicago, Washington DC and Philadelphia.

Porter’s seven daily flights from Toronto to New York Newark started March 31. The value of the aircraft in the two-plane order from Porter is approximately $51 million.


Air Canada is introducing a Boeing 777-300ER for its flights to Sao Paulo, Brazil.

South American Upgrades for Air Canada
Air Canada is enhancing service to South America next winter with the introduction of new non-stop service to Buenos Aires, an exclusive flight to Santiago and the introduction of a Boeing 777-300ER for Sao Paulo. “Air Canada is improving its services to Argentina, Brazil and Chile in response to continued strength in these markets during the busy southern hemisphere summer, including the demand for connections between South America and our global network through our Toronto hub to Europe and Asia. By establishing two separate, non-stop services for Argentina and Chile and deploying our largest, most modern aircraft for Brazil, customers will have faster travel times and better connection opportunities than previously,” said Ben Smith, executive vice president and chief commercial officer. “Moreover, all the aircraft serving these routes will feature lie-flat suites in Executive First and personal audio visual entertainment, a power plug and USB port at every seat to provide customers the most modern amenities in the sky today.”

Starting December 1, 2008 and ending April 1, 2009, Air Canada will split its current daily Toronto-Santiago-Buenos Aires flight into two separate flights, each operating five times a week between Toronto and the cities of Santiago and Buenos Aires. Also during the period, Air Canada will begin flying a 349-seat Boeing 777-300ER daily between Toronto and Sao Paulo, which is currently served with a 211-seat Boeing 767-300ER. This new service will reduce travel times between Buenos Aires and Toronto and other points in Air Canada’s network by up to 3 1/2 hours. The Santiago route will be served with a refurbished Boeing 767-300ER.

Also starting December 1, 2008, Air Canada will upgrade the aircraft serving Toronto-Sao Paulo to a Boeing 777-300ER from a Boeing 767-300ER, providing an additional 138 seats a day. The flights are timed to connect with onward flights to Europe and Asia, providing convenient travel times between those continents and South America. The deployment of a Boeing 777 on the route will also enable Air Canada to expand cargo services between Canada and Brazil.


Skyservice Airlines will launch seasonal scheduled flights to Croatia, Portugal and Italy.

Skyservice Resumes Gateway Flights
Skyservice Airlines plans to launch seasonal scheduled flights from Toronto to Zagreb, Croatia on May 28, followed by additional scheduled flights to Portugal and Italy this summer.

The carrier’s flights to Zagreb are a resumption of seasonal flights
Skyservice offered to Croatia in 2007. It is using Boeing 757s on the
route, with outbound flights departing Canada on Wednesdays and the
inbound return leaving Zagreb on Thursdays. The airline said early
on-line bookings indicate Croatia is a popular choice for travellers as
a gateway to Eastern Europe.

Codeshare for WestJet
WestJet Airlines continues to have discussions with potential interline and codeshare partners and aims to finalize deals this year. Currently WestJet has a single interline pact with Taiwan’s flag carrier China Airlines. The airline said it hopes to announce one or possibly two interline deals. It has previously been reported that WestJet is in talks with Air France and Cathay Pacific.

Along with those discussions, another obstacle WestJet needs to overcome this year is selecting a new reservations system. Last year WestJet had a non-cash writedown of $31.9 million after opting to scrap plans to use the aiRES reservation system from Travelport. WestJet opted to upgrade its Open Skies system supplied by Navitaire for use through 2008.

Modest Profit for Industry
After barely breaking even last year, Canada’s airline industry should make a modest profit of $150 million in 2008, according to a Conference Board of Canada study. But profits will remain thin over the next five years, it added. Increased demand for air travel has resulted in better load factors, resulting in healthy revenue growth.

“It should be boom times for Canadian airlines,” said Board economist Alexander Fritsche. “However, record fuel prices and labour shortages are driving up costs, while intense competition is preventing carriers from raising prices.” While fuel prices and labour costs should begin to moderate this year, industry costs are expected to increase by an average of 6.5% annually over the next five years.


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