An Air Canada plane lands at Calgary International Airport.TODD KOROL/Reuters
With one eye on the strong resource economy and the other on its chief rival, Air Canada is ramping up the frequency of its short regional flights in Western Canada.
Taking advantage of growing business travel in resource hot spots, Air Canada is scheduling more flights in the West, particularly from Edmonton and Calgary to oil sands hubs like Fort McMurray, Alta. and Fort St. John, B.C.
The move to establish stronger regional Western services comes as WestJet Airlines Ltd. works on launching its own regional carrier.
"This is a pre-emptive move on the part of Air Canada to get out and protect its turf," said airline consultant Rick Erickson of RP Erickson and Associates in Calgary.
WestJet's new Encore regional airline is not expected to start flying until the second half of next year. WestJet has yet to specify whether Encore will concentrate first on the populous Eastern Canadian market and then expand in the west, or vice versa.
But as Mr. Erickson noted, Air Canada is undoubtedly "concerned about this foray that WestJet is going to make in some turf that has largely been exclusively theirs."
As the only national airline that also has a regional feeder system, Air Canada isn't idling until the competition arrives. The carrier, through its regional Jazz partner, is increasing the frequency of eight short-haul flights out of Calgary, Edmonton and Vancouver, under the Air Canada Express livery.
Flights from Edmonton and Calgary to Fort McMurray are rising to seven flights daily this autumn and winter from six this time last year. Vancouver to Nanaimo will also increase to seven daily flights, boosting capacity by 50 more seats.
And starting in February, a number of those flights from Calgary and Edmonton will gradually begin to switch to new 74-seat Bombardier Q400 planes, as opposed to the 50-seat Bombardier CRJ planes currently in use.
Air Canada emphasized in a statement Thursday such touches as the all-leather seats of the Q400, aimed at business passengers, but it is the added frequency that the airline is most touting.
Meanwhile, WestJet spokesperson Jennifer Sanford said that with Encore, the airline is "getting to the business of liberating Canadians in many communities from the high cost of travel." It is the first taste of the heightened regional competition to come.
Encore will also be flying Bombardier Q400s and is expected to add planes as quickly as Bombardier can produce them to establish its network quickly, say industry watchers.
Until now, Air Canada has been the only game in town in terms of feeding its regional flights into a larger network. And "typically, the yields have been very good for Air Canada in that market – the amount of money they have been able to make on a per-seat basis, because there has been no competition," said Mr. Erickson, the airline consultant.
"You'll find markets where you pay more to fly, say, 500 kilometres than you'll pay to fly 3,000 kilometres. And of course the air carrier argues, There are economies of scales, it's a bigger airplane. ..." The truth is that without competition, an air carrier can charge whatever it can, Mr. Erickson noted.
All of this is happening at a relatively strong time for the airlines. "We are seeing good demand out West. With the economy there, it's booming," said Air Canada spokesperson Peter Fitzpatrick. Overall, domestic flights have recently been on average around 82 per cent full.