My old argument finally comes home.

It wasn't so long ago that coffee was indeed a commodity -- it was what you got free of charge when you ordered a slice of pie. Then Starbucks very deftly converted coffee from a commodity to a specialty item. So now people happily and repeatedly pay more for a "cup of coffee" than they used to pay for pie (with a free coffee).

As long as airlines, Air Canada in particular, try to lower costs by offering less, there will be less and less to distinguish them from any other airline. Clearly most people already think Air Canada is no better than the worst of them, otherwise they'd be prepared to pay more.

But Air Canada (and the rest) have successfully reversed Starbuck's trick and commoditized the airline industry. Most passengers think one airline is as bad as another, so they're not prepared to spend a penny more just to get a particular airline.

Which means they are all competing on cost. And Air Canada will never win that battle. They may be successful in the short term when pretty much every airline on the planet is reporting ever increasing loads, and most are making money (with some of them making tons of money.) (Keep in mind that Air Canada is still not making money on operations.)

But once the current ride is over, or even just slows down a bit, then Air Canada will pay dearly as they'll no longer have packed planes, and with thin margins they'll be losing money where others will still be profitable.

Then Air Canada will still have large numbers of very uncomfortable seats. Only many of them will be empty.