Wings Magazine

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Airline Insider – May June 2009

Brian Dunn covers the latest developments in the Canadian airline industry.


May 20, 2009
By Brian Dunn

Topics

PORTER STRENGTHENS NETWORK
Porter Airlines is considering ordering more Q-400 turboprop planes once Bombardier delivers previously ordered aircraft to the regional carrier. Robert Deluce, president and CEO of the airline, told a transportation conference in Toronto that Porter is increasing the size of its fleet as it adds new destinations. On June 26, it will begin offering three daily round trips and two round trips on Saturday and Sunday between Toronto City Centre Airport and Thunder Bay throughout the summer. It will also add either Boston, Washington or Philadelphia before the end of the year,
Deluce said.

Porter currently operates eight planes and was scheduled to add four 70-seat Q-400s in May as it doubles its daily service to Montreal to 18 round trips and increases flights to Ottawa from 10 daily round trips to 14. Weekend service is also increasing on both routes. Deluce said additional planes could be ordered after Porter’s fleet increases to 18 aircraft by the end of the year. The network will be strengthened with 10 new city pairs that initially create various new routes among New York, Chicago, Montreal, Ottawa, Quebec City and Thunder Bay.

WESTJET CAPACITY CONTINUES TO GROW
WestJet expects to achieve significant growth in market share over the medium to long term, despite what is anticipated to be a difficult year. A strong cash balance and low debt leave the airline in a strong position to take advantage of growth opportunities in the current weak environment, Vito Culmone, WestJet’s chief financial officer, said at the same transportation conference that Deluce addressed. “We are one of only three airlines … that made any money in 2008,” although this year will be much tougher, he added.

WestJet projects its capacity to grow between six and seven per cent in the first quarter and by a maximum of five per cent for all of 2009. In 2008, WestJet’s capacity increased by nearly 18 per cent. Culmone said that the low ticket prices currently dominating the market were a problem, but lower fuel prices would provide “significant relief from a margin perspective.” The company’s fleet of Boeing 737 aircraft currently numbers 78. It will grow to 85 by the end of the year, and to 121 through 2013, adding to market share and revenues, Culmone said.

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WestJet expects to boost its share of the $5 billion domestic market to 40 to 45 per cent by 2013 from the current 36 to 37 per cent, Culmone said. On flights to the United States, it plans to nearly double its market share to around 20 per cent by 2013 from 11 per cent. Culmone said significant contributors to WestJet’s growth would come from its WestJet Vacations unit, partnerships with other airlines such Southwest Airlines and more flights to Mexico and the Caribbean, markets the company only entered in 2006.

AEROMEXICO ADDS MONTREAL
AeroMexico has added twice-weekly service between Montreal and Mexico City. The new route is part of its “strategic expansion of its North America operations,” the airline said. Flights from Montreal depart Thursdays and Sundays, and returning on the same days.

SINGAPORE HALTS FLIGHTS TO VANCOUVER
After 20 years of service, Singa-pore Airlines has halted flights to Vancouver. The airline said the route has been badly affected by the global economy and was part of the carrier’s “continuing commitment to ensure capacity is best matched with demand in the current economic conditions.” The airline had been offering flights three times a week between Vancouver and Singapore, via Seoul.

TRANSAT GOING STRONG
Transat A.T. said bookings were strong for winter travel down south as well as for European travel this summer, but industry overcapacity is hampering selling prices and margins for a third straight year. A recovery in airline travel isn’t expected until next year at the earliest, but Transat will turn a profit this year, according to CEO Jean-Marc Eustache. He said a new agreement with Canjet, replacing one with WestJet, will save the com-pany millions of dollars.

AIR CANADA’S FRENCH CONNECTION
Air Canada will launch the only daily service between Vancouver and Paris to meet seasonal travel demand. Between July 1 and Sept. 29, the carrier will operate daily one-stop same plane flights linking Vancouver with the French capital via Montreal. This service complements Air Canada’s daily non-stop services between Toronto-Paris, and Montreal-Paris using brand new 349-seat Boeing 777-30ER aircraft. And effective June 1, Air Canada is scheduled to introduce new Montreal-Geneva service also providing easy access to a number of popular destinations in France served by train such as nearby Lyon, Annecy, Dijon and Grenoble. Geneva flights are timed to offer Vancouver customers easy and convenient connections in Montreal.


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