Airline Insider: November/December 2007
WESTJET ORDERS B737-700S, EYES QUEBEC CITY SERVICE
WestJet continues to bulk up with an order for 20 more Boeing 737-700s, with an option to convert the 700s to 800s. A total of 14 aircraft are scheduled to be delivered in 2012 and another six in 2013, bringing its total fleet size to 111 Boeing aircraft, including previously announced deliveries by the end of 2011.
“We have had a significant impact on the North American airline industry and require these additional aircraft to satisfy the demands … for our services in Canada, the United States, the Caribbean and Mexico,” said Ken McKenzie, executive VP of operations. It is also one of the largest orders in WestJet’s history, he said, noting that WestJet is one of the “healthiest” airlines in North America.
WestJet is also closer to introducing service to Quebec City, now that is has close to the 400 bilingual flight attendants that airline founder Clive Beddoe said it needed in a speech two years ago at a Montreal business lunch. In addition, WestJet is taking delivery of six more aircraft in 2008, giving it the option of adding the provincial capital to its schedule.
AIR CANADA ADDS NEW B777S
Air Canada is also acquiring new Boeing aircraft in the form of 777s which the carrier will use to boost capacity in the booming Asia-Pacific region. It plans to deploy the aircraft mainly on key routes to Japan and China. The airline has taken delivery of seven 777s and another 10 will be added by the end of 2008. It said it is shifting some seat capacity to the region from the underperforming UK market where it is facing increased competition from both British Airways and low-cost carriers.
PORTER BOOSTS HALIFAX LINK, PLANS NEW ROUTES TO US
Porter Airlines is making Halifax a year-round destination after a successful summer season convinced the private operator that there is enough demand to add Halifax to its other destinations of Montreal and Ottawa linked to Toronto City Centre Airport. After Labour Day, Porter began offering weekend service to Halifax via Ottawa. It will take delivery of two more Bombardier Q400 aircraft in January and four more by the end of next year, bringing its total fleet to 10 Q400s.
The carrier expects to begin service to New York/Newark early in 2008, and also to add Boston and Chicago as its next destinations in that year. As part of its growth plans, Porter is expanding from two to five departure gates at City Centre Airport with construction scheduled to be completed by Dec. 31.
Porter said it has achieved average monthly revenue growth of over 20% since beginning flights in October 2006. June saw a net profit margin of 8%.
SKYSERVICE CHANGES HANDS,
PAYSON REMAINS AS CEO
Skyservice Airlines has changed ownership with Vancouver-based Gibralt Capital Corp. taking a majority stake in the private carrier, leaving Russell Payson, Skyservice chairman and CEO with a minority stake in the charter carrier along with other co-owners who will remain in their current positions.
The airline has a fleet of 21 aircraft, including Airbus A319s, A320s, A330s and Boeing 757s and flies to 64 destinations on behalf of tour operators such as Conquest and Signature. It has estimated annual revenue of $500 million and carries about one million passengers annually.
The sale of the unspecified majority interest comes as many of the airline’s shareholders were looking to “monetize their investment,” said Payson. “No changes to the company’s current operations and workforce are planned. In Gibralt, we have an ideal partner bringing experience, financial strength and long-term investment perspectives that will help us realize the full potential of our business. Our plan is to leverage our profitable base of operations, not only in the charter business, but also in aviation services and maintenance. Gibralt’s investment is the start of a new era for our company.”
Through its Business Aviation Group, Skyservice is also active in corporate aircraft management and sales, business jet charter services, fixed base operations and an international air ambulance service. These activities are not included in the sale and will continue to be owned by Skyservice Investments.
JAZZ DEVELOPS PROGRAM TO TRAIN FIRST OFFICERS
With increased demand for airline pilots, Air Canada’s Jazz is developing a new program that would transform aviation college graduates to first officer positions.
Under a partnership with the Canadian Association of Aviation Colleges (CAAC), Jazz is in the early stages of studying the standards and criteria needed to initiate
the program, which would complement but not replace its current recruiting efforts.
Candidates for the program would be graduates of colleges within CAAC, whose members include Confederation College, Thunder Bay; Cégep de Chicoutimi; Georgian College, Barrie, Ont.; Mount Royal College, Calgary; Sault College, Sault Ste. Marie; Selkirk College, Castlegar, BC; and Seneca College, Toronto.
Successful completion of the same ground school and Transport Canada pilot proficiency checks on Bombardier CRJ or Dash 8 turboprop aircraft as with all other Jazz first officers would be required under the program.
The first graduates started their training this fall. It is not yet clear when they will be brought into the Jazz system. Currently, the majority of pilots applying to Jazz
come from smaller airlines within Canada. But demand for commercial airline pilots in North America as well as other parts of the world is high, and continues to grow significantly.
AIR NEW ZEALAND WILL FLY TO CANADA
Canada and New Zealand have signed a new air services agreement, helping Air New Zealand’s planned push into the Canadian market.
ANZ said that a new air services agreement has been signed allowing each side to have four flights per week on the Canada-New Zealand route. It plans to work with its Star Alliance partner Air Canada to extend its reach.
ANZ was scheduled to launch a thrice-weekly service on Nov. 2 from Auckland to Vancouver using Boeing 777-200ERs. Air Canada will be a codeshare partner. ANZ said the service will become twice-weekly from late March, returning to thrice-weekly for July and August. No airline has previously operated the route.
ZOOM LEASES ILFC B757
Zoom Airlines has leased one used Rolls-Royce RB211-powered Boeing 757-200ER from US lessor International Lease Finance Corp. for 56 months. The Ottawa-based carrier will receive the aircraft in February 2008. It is expected to be deployed to its southern sun destinations.
NEW OTTAWA-CLEVELAND LINK
Continental Airlines on Sept. 30 began a new nonstop service between its Cleveland hub and Ottawa International Airport. Ottawa is the fourth Canadian city and the seventh international city served from Cleveland by Continental. The new twice-daily service is operated with 37-seat Embraer 135 regional jet aircraft flown by Continental partner Express-
IATA INCREASES 2007 AIRLINE PROFIT FORECAST
Strong passenger growth has offset rising fuel costs to the point that the International Air Transport Association has revised its 2007 forecast upwards by US$500 million to US$5.6 billion, the total profit the international airline industry could make this year.
The optimistic forecast also reflects “hard-won efficiency gains” made by the airlines from greater labour productivity and lower non-fuel costs, said Giovanni Bisignani, director general of IATA. It’s also a 10% increase from its June estimate of US$5.1 billion.
Although Bisignani is optimistic the airline industry will also turn a profit in 2008, he cautioned that higher fuel prices and possible fallout from credit markets could erode demand for air travel. As a result, IATA has reduced its forecast for next year to US$7.8 billion from an earlier estimate of US$9.6 billion.
While airline fuel efficiency has improved 70% in the last 40 years, IATA expects a further 25% improvement