Southwest eyes northern push, threatening Air Canada, WestJet
Jul 28, 2014, 4:17 am
#61
Join Date: Jun 2010
Location: YYG
Programs: airlines and hotels and rental cars - oh my!
Posts: 2,995
WN does not "serve" Toronto via BUF. Nobody "serves" YYZ pax in any meaningful sense of the word via BUF.
YYZ has 34M pax a year, BUF has 2M, of which maybe half, ie 1M, are Canadian.
Only maybe about half of those BUF pax are being dragged from the GTA (the rest live in St Catherines, Ft Erie, Niagara Falls, Welland, the western suburbs of Hamilton, or somewhere else closer to BUF than YYZ).
BUF serves something like 1.5% of the GTA market. It is a very niche market, mostly large families or other highly price-sensitive segments. That's it.
YYZ has 34M pax a year, BUF has 2M, of which maybe half, ie 1M, are Canadian.
Only maybe about half of those BUF pax are being dragged from the GTA (the rest live in St Catherines, Ft Erie, Niagara Falls, Welland, the western suburbs of Hamilton, or somewhere else closer to BUF than YYZ).
BUF serves something like 1.5% of the GTA market. It is a very niche market, mostly large families or other highly price-sensitive segments. That's it.
True. It seems a bit of a chicken and egg. They don't get much traffic so they can't justify building a decent terminal. But the lack of decent terminal facilities ensures they won't ever attract the traffic.
Jul 28, 2014, 5:32 am
#62
Join Date: Feb 2014
Posts: 186
http://www.buffaloairport.com/toronto/
http://en.wikipedia.org/wiki/Toronto...tional_Airport
If YYZ "handled" about 36 million passengers, I presume about half were arriving and about half were departing. So a little over 18 million passengers "flew out of" YYZ.
Now, take away all the non-North Americans who probably don't even know BUF exists. Take away all the short haul intra-Canada flights/passengers (i.e. RapidAir triangle - which I presume is a goodly number). Take away all the others for whom BUF is not a viable option. How many passengers are left?
If 18 million flew out of YYZ, and 2 million flew out of BUF, that's about 20 million. The 2 million that flew out of BUF represent about 10% of that number. And that's without any adjustments to the raw numbers.
The real measure is not absolute numbers, but rather what percentage of potential YYZ passengers for whom BUF is a viable option are exercising that option. (Clearly someone flying YYZ-YOW is not going to fly out of BUF - excepting me, maybe. So they shouldn't enter into the calculation.)
The number of passengers choosing to fly out of BUF might be a lot smaller than YYZ traffic, but clearly BUF is poaching a significant portion of GTAA traffic. It appears it might well be a double-digit percentage.
Do the same for YVR/BLI and I suspect the portion is significantly larger. One only has to drive through the airport and area hotel parking lots to see that there are more BC plates than US plates in those lots. You'd still need to compare it to the YVR numbers, but like shopping for gas and groceries, many in the Metro Vancouver area choose to go to BLI.
http://en.wikipedia.org/wiki/Toronto...tional_Airport
If YYZ "handled" about 36 million passengers, I presume about half were arriving and about half were departing. So a little over 18 million passengers "flew out of" YYZ.
Now, take away all the non-North Americans who probably don't even know BUF exists. Take away all the short haul intra-Canada flights/passengers (i.e. RapidAir triangle - which I presume is a goodly number). Take away all the others for whom BUF is not a viable option. How many passengers are left?
If 18 million flew out of YYZ, and 2 million flew out of BUF, that's about 20 million. The 2 million that flew out of BUF represent about 10% of that number. And that's without any adjustments to the raw numbers.
The real measure is not absolute numbers, but rather what percentage of potential YYZ passengers for whom BUF is a viable option are exercising that option. (Clearly someone flying YYZ-YOW is not going to fly out of BUF - excepting me, maybe. So they shouldn't enter into the calculation.)
The number of passengers choosing to fly out of BUF might be a lot smaller than YYZ traffic, but clearly BUF is poaching a significant portion of GTAA traffic. It appears it might well be a double-digit percentage.
Do the same for YVR/BLI and I suspect the portion is significantly larger. One only has to drive through the airport and area hotel parking lots to see that there are more BC plates than US plates in those lots. You'd still need to compare it to the YVR numbers, but like shopping for gas and groceries, many in the Metro Vancouver area choose to go to BLI.
You can gt cheaper fares from Buffalo, but unles you have family is hardly worth it coming from Mississauga east, especially now that dollar has dropped and you usually have to connect put of Buffalo.
Jul 28, 2014, 6:48 am
#63
Join Date: Jul 2005
Location: YYZ
Programs: AC*SE,MM
Posts: 363
Jesus, this is really the terms of this debate?
One person cuts the Pearson traffic in half, doesn't do the same for Buffalo, then ignores that for at least half the Canadian traffic at BUF is naturally closer to BUF ....
A second declares that half the GTA lives west of Toronto ...
Sigh
One person cuts the Pearson traffic in half, doesn't do the same for Buffalo, then ignores that for at least half the Canadian traffic at BUF is naturally closer to BUF ....
A second declares that half the GTA lives west of Toronto ...
Sigh
Last edited by ensco; Jul 28, 2014 at 7:23 am
Jul 28, 2014, 7:00 am
#64
Join Date: Dec 2003
Location: Toronto, Ontario, Canada
Posts: 3,393
One other aspect that makes SW an unlikely candidate to start service to Canada soon: They would be cannibalizing their traffic and yields at border airports. If they pick up so much traffic at BUF that would divert to Pearson flights, that's at the expense of their border services. That wouldn't hurt JetBlue at Buffalo or Burlington, since their traffic flows are oriented to the East Coast.
Jul 28, 2014, 7:32 am
#65
Join Date: Mar 2013
Location: YYZ
Programs: Aeroplan, 50K Altitude, Nexus
Posts: 339
One other aspect that makes SW an unlikely candidate to start service to Canada soon: They would be cannibalizing their traffic and yields at border airports. If they pick up so much traffic at BUF that would divert to Pearson flights, that's at the expense of their border services. That wouldn't hurt JetBlue at Buffalo or Burlington, since their traffic flows are oriented to the East Coast.
http://www.bizjournals.com/buffalo/n....html?page=all
Jul 28, 2014, 8:51 am
#66
Join Date: Mar 2001
Location: LAS-DEN
Programs: WN CP & B-list. Disillusioned fmr UA-1P/2P,F9-Ascent; Fmr AA-Plat,CO-Gold,NW-Silver,TWA-Elite
Posts: 1,630
I so wish that WN had been flying DEN-YVR back in 2013. I was forced to fly UA. What a total rip off. The price was more than double flying WN from DEN-SEA and then add $140 in bag fees for 3 people on top of that. Yet, the costs to go from SEA to YVR are approximately equal, which seems to be exactly what UA has factored in, along with the "hassle" factor.
If WN just matches UA's price and then gives 2 free bags per person, I'd be very happy. If WN undercuts UA, I'd be super thrilled.
The return flight, YVR-DEN was even worse on UA. A price of $500 per person. That was so bad, I went to Victoria and flew out of there. I was able to add 2 days of vacation for almost no cost (hotels, rental car, activities approximately equal to the air fare cost savings). I flew AS out of YYJ with connection in SEA at $200 per person less.
I'd even be happy to see WN do a seasonal thing, although I know that isn't their style. Use the AS model. Fly to Canada in the late spring through early fall, then use the planes to fly to Mexico from fall through spring.
All competition brought in by WN is good. If you don't like them, you can still fly with AC or WestJet ... but you will probably still be flying for less. Personally, I find it hard to imagine that I wouldn't be flying with WN.
If WN just matches UA's price and then gives 2 free bags per person, I'd be very happy. If WN undercuts UA, I'd be super thrilled.
The return flight, YVR-DEN was even worse on UA. A price of $500 per person. That was so bad, I went to Victoria and flew out of there. I was able to add 2 days of vacation for almost no cost (hotels, rental car, activities approximately equal to the air fare cost savings). I flew AS out of YYJ with connection in SEA at $200 per person less.
I'd even be happy to see WN do a seasonal thing, although I know that isn't their style. Use the AS model. Fly to Canada in the late spring through early fall, then use the planes to fly to Mexico from fall through spring.
All competition brought in by WN is good. If you don't like them, you can still fly with AC or WestJet ... but you will probably still be flying for less. Personally, I find it hard to imagine that I wouldn't be flying with WN.
Jul 28, 2014, 8:54 am
#67
Original Poster
Join Date: May 2012
Location: Toronto
Programs: AC*SE100K 1MM, Little Lebowski Urban Achiever
Posts: 735
Buffalo is down 10% this year, major canadian airports are all up. Maybe just chase the growing market? Im sure the drop in CDN dollar is having affect on people making the drive over border. Would be nice to have added level of competition but doubt we see it.
http://www.bizjournals.com/buffalo/n....html?page=all
http://www.bizjournals.com/buffalo/n....html?page=all
Jul 28, 2014, 9:13 am
#68
Join Date: Feb 2006
Location: YUL
Programs: Super Elite 100K
Posts: 830
Why Canada?
I agree with the posters who posit that WN's entry to Canada would not be smooth. I'm more curious as to why they would float that idea instead of being more aggressive with close cross-border airports, like Burlington or Plattsburgh that are in easy reach of Montreal. They could boost service to US airports, avoid Canada's scandalous airport fees, keep jobs in the US, and look like heroes to shareholders. Personally, I don't believe Southwest could ever transplant to the great white north, and they would be fools to try, particularly when there are under-served airports close the border that would keep them from dealing with the nastiness of Canadian fees.
Our closest Southwest service is Albany or Portland - I'd rather have them within an hour or so and keep fares low, than have them try and fail in Canada.
Our closest Southwest service is Albany or Portland - I'd rather have them within an hour or so and keep fares low, than have them try and fail in Canada.
Jul 28, 2014, 11:11 am
#69
Join Date: Oct 2012
Location: Portland, Oregon
Programs: United Mileage Plus (Silver 2014), AAdvantage, Aeroplan, Flying Blue
Posts: 53
I can also see SWA giving Porter a headache in the Montreal market, since YUL-MDW requires a connection at YTZ whereas the Big 3 and AC already send RJ's on return loops ORD-YUL. I'm not sure if Porter has a connection arrangement with SWA already but I did once meet a sales person from Montreal who would book a two week itinerary on Porter to Chicago and in-between, fly around the US on SWA. So I can definitely see western and eastern markets getting plugged into SWA's network via MDW (sorry, Ontario!).
Jul 28, 2014, 12:28 pm
#70
Join Date: Jul 2005
Location: Ontario, CAN
Posts: 5,813
Much like Target, WN knows their hype precedes them before service even starts.
If WN comes to Canada and doesn't deliver discounted fares/product (aka Target), the market will blast them.
If WN come in ready to fight/discount for market share, they'll be in a bloodbath and have to wait it out for a while. That's not WN's style. They are quick with their knives when routes need to be cut (ask Atlanta)
Southwest is a few years too late to Canada. I'd imagine most of their expansion will be South of the border rather than North.
Would be great watching if they do come, however
Jul 28, 2014, 12:49 pm
#71
Join Date: Apr 2000
Location: Toronto, Ontario, Canada
Posts: 3,665
When I go to Houston from YYZ, I have a choice of either member of the AC/UA duopoly, which is why it costs about the same as going to Europe and you can only go to IAH and on an RJ. I suspect Southwest could offer a flight to HOU and make plenty at a good deal less and they would use a 737. The same can go for their other hubs, like BWI. Target came to Canada long after Walmart had established its business here and Walmart is doing well. But then again, neither is an airline.
Jul 28, 2014, 12:50 pm
#72
Join Date: Jul 2005
Location: Ontario, CAN
Posts: 5,813
AC and WS are currently very well armed for battle if WN comes in, IMO. WN are a big, strong dog but if they're going to fight AC/WS for food, it better be a prime piece of steak. I just don't think the end will justify the means or they would have been here sooner.
Jul 28, 2014, 1:18 pm
#73
Join Date: Sep 2005
Location: YOW
Programs: AC E75K *G
Posts: 7,107
Not sure if you are beinf facetious here, but I'm not certain the fact that the US taxpayer subsidy model versus the Canadian user pay model for airports is necessarily a scandal at all, or if it is a scandal, which side is more scandalous.
Jul 28, 2014, 1:26 pm
#74
Join Date: Oct 2012
Location: Portland, Oregon
Programs: United Mileage Plus (Silver 2014), AAdvantage, Aeroplan, Flying Blue
Posts: 53
http://www.usatoday.com/story/todayi...ghts/13146693/
Gary, Indiana is another example of failed subsidies. For some reason, the City of Chicago is paying into that white elephant (so far, nobody has been able to figure out the thinking behind Richard M. Daley's decision on that, back in the 90's).
http://www.nbcchicago.com/investigat...175902941.html
http://www.usatoday.com/story/todayi...rline/2642311/
However, that's not to say that Canada's privatized flying model couldn't be better executed.
Last edited by garydpdx; Jul 28, 2014 at 2:16 pm Reason: additional URL references
Jul 28, 2014, 3:58 pm
#75
Join Date: Mar 2001
Location: LAS-DEN
Programs: WN CP & B-list. Disillusioned fmr UA-1P/2P,F9-Ascent; Fmr AA-Plat,CO-Gold,NW-Silver,TWA-Elite
Posts: 1,630
While I do not enjoy paying Canada's airport fees, they are what they are. IIRC, a flight into YVR did not incur those fees. A flight out had about a $50 fee. OK, it won't be as cheap as flying out of SEA. Still, if SWA provides competition on the DEN-YVR run, it will be just like the DEN-LAS run. United used to own that route with 14 flights a day. They would rip us off on the price -- and that was before the invention of bag fees.
Today United flies 4 flights per day DEN-LAS. SWA owns the route. Its a lot cheaper, especially inflation adjusted.
DEN-YVR won't be the price of DEN-SEA, but it still will be cheaper than letting UA set the price. All past experience is that when UA sets the price, its over priced. And then add bag fees and change fees on top of that.
Even if there is no price change, you still get free bags and no change fees. But, I'm betting on a price reduction. If you don't like SWA, don't fly SWA. Pay more. Its ok with me.
Today United flies 4 flights per day DEN-LAS. SWA owns the route. Its a lot cheaper, especially inflation adjusted.
DEN-YVR won't be the price of DEN-SEA, but it still will be cheaper than letting UA set the price. All past experience is that when UA sets the price, its over priced. And then add bag fees and change fees on top of that.
Even if there is no price change, you still get free bags and no change fees. But, I'm betting on a price reduction. If you don't like SWA, don't fly SWA. Pay more. Its ok with me.