FlyerTalk Forums - View Single Post - AC and WS : How little separates the airlines anymore
Old May 13, 2018, 9:26 am
  #8  
CZAMFlyer
 
Join Date: Dec 2014
Location: YVR
Programs: Bottom feeder Star Gold
Posts: 2,652
Originally Posted by Transpacificflyer
The claim is not backed up by actual facts. On the contrary, the comparison data printed in the article highlights significant differences in the operating characteristics of the two distinct airlines. Perhaps they are similar on domestic operations, but when it comes to the key source of profits for AC, its long haul foreign routes, they are very different airlines.

Those in the industry say differences between the two carriers are essentially non-existent.
And this ladies and gentlemen may explain why so many Canadian airlines have failed. The so called experts are unable to grasp the key characteristics. Duh, hey Charlie, let's show some flare and lease us some planes and we can be just like the big Guys. We can call it Jet-Stop, and have FAs in cool lime green outfits that are really tight, yuck, yuck.

i. AC has 73 widebody aircraft vs. West Jet's 4 - On this characteristic alone there is little to compare.
ii. AC has 2.3X the personnel that encompasses multiple jurisdictions and social benefit environments. The workforce is very different from West Jet. Hiring and retaining foreign language personnel is no easy task. Hiring, training and retaining widebodypilots is more expensive and difficult than it is with the B737/AB 319/20/21. (At least that's what the industry journals say.)
iii. AC is a worldwide operation that must comply with regulations that vary from country to country. It is expensive to maintain a presence in multiple foreign locations.
iv. AC is more of a full service airline offering meals , lounges and complex partner connections.

I get it, West Jet says it is changing. Let me know when it does, because it is still West Jet the domestic bus service of the sky until its wide bodies arrive and it actually provides the lie flats, full service and multiple long haul foreign routes. An airline can't just show up in HKG, PVG, PEK, NRT etc. and in its best Gomer Pyle voice say surprise, surprise we are flying here now. These airports have no more slots to award. They are at capacity. Until West Jet is in a strategic alliance, it will be at a disadvantage. The assumption that Delta will welcome West Jet with open arms assumes a lot of things, especially that DL and its Asian partners will want another competitor on their routes and that AC and the Chinese carriers will cede market share. AC has a death grip on some of the best slots to and from Asia and premium class pax look at schedules. I know I do. The profit on these long haul routes is generated from the premium class, especially the paid business class cabin.
I have bolded some of the points above I wish to address:
  • WestJet understands its opportunities for growth within North America are limited and they can't sustain the rate of growth they have enjoyed for the past years without flying further afield. This is why it has started to move into the arena previously and perhaps smugly considered the realm of Air Canada: long haul premium between Canada and the world.
  • Yes WS has 4 widebody aircraft, but will soon have 14. Recall they started with 3 737s, and look at them now. While many commenters are focused on the here & now snapshot, the company is looking further ahead. If WS can compete with AC on one thing, it's their status as a loyal and exclusive Boeing customer, likely with as much or more pull with the manufacturer than the good folks in YUL. Ten Dreamliners can turn into many more.
  • I get the sense some believe WS will have difficulties hiring foreign language personnel and widebody pilots. More so than AC? Hardly.
  • The executives in Calgary must have no idea how complex and expensive it is to comply with regulations in multiple foreign countries. They only fly to 20, after all.
  • AC is indeed (today) more of a "full service airline". And now they have a challenge from another aspirant seeking to be the same.
  • WS executives likely have a better understanding on their ability to secure landing rights and slots at premium airports than by glancing at a wikipedia page. They'll never touch down and pull up to a gate at NRT...until they do.
  • There exists also the assumption that WestJet is seeking Skyteam membership. Assumption is the mother of all (better stop here).
  • Of course AC and Chinese carriers won't "cede market share". No such thing as a free lunch and all that. Imagine if businesses never launched a product or a service because they were afraid existing competitors might not grant them willing access into the market.
  • On your final bolded point, I agree. And look at who's coming to town, eager for a slice of that pie.
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