CloudsBelow

Don't interrupt all the speculation here with cold, hard facts.

It flies in the face of all the people who don't fly AC anymore cause they can fly BUF-DCA for $72 all in.
Or the ones who claim "yield factors" mean nothing (assume they meant load factors) followed by the posts that refer to AC's outrageous pricing.

Load factors are high, and price points are outrageous. I don't exactly know how AC can solve this issue

KenHamer

Wirelessly posted (Mozilla/5.0 (BlackBerry; U; BlackBerry 9780; en-US) AppleWebKit/534.8+ (KHTML, like Gecko) Version/6.0.0.448 Mobile Safari/534.8+)

And yet AC still saw fit to give advance warning that Q1 was likely to be worse than was normally expected.

If AC said this was just another standard Q1 loss that would be one thing. But they are saying it's going to be worse than usual/expected because of Easter and the higher percentage of leisure travellers compared to business, even with record load factors.

So which is it? Did they attract too many leisure travellers (the ones they are allegedly courting with rogue)?

Or did they lose too many business passengers, in spite of record loads?

CloudsBelow

Good questions. Sure it's some of each. Throw in some unusually bad weather in YYZ and the resulting IRROPS expense and it makes for a poor Q1.

Let's see Q1 results at WS early next week and, more importantly, the Q2 view from AC.

yeg2where

The only thing is, they specifically cite the leisure:business ratio, as well as "it was winter".

There is significant anecdotal evidence of people who work in organizations where low economy is mandatory doing what I did yesterday: buy a UA ticket to Asia for about $100 more than a ticket with AC. For $100 I get >$16k AQM instead of <$5k and the option to pay for economy plus legroom if I want to.

I have to buy economy for work, +- $100 is OK. +- $1000 is not. AC have explicitly chosen to get out of a particular market. The report indicates this may be having negative effects. We will see.

Clipper801

Not sure how AC differentiates between leisure and business flyers.

The new 2013 Attitude alienates those “low to moderate” volume flyers who principally buy business class.

If one flies between 35~60K but principally in business class, they were really given the shot end of the stick by AC. This was a deliberate act by AC to exit this group when it refused to give extra COS when flying on Latitude or higher fares on AC metal to generate a soft landing for this group in conjunction with the change.

Not surprised if this group left to fly someone else when they compare shop as AC’s business class fare is frequently uncompetitive. Achieve an upper tier status is always an incentive. When AC takes it away, it changes the game.

CloudsBelow

What's the difference between a company that must book Lowest Economy and a Tour group / Leisure travel to AC?

Nothing

AC's definiton of a business traveller is not simply someone flying for business - Lots of people fly to LAS for "business" (trade shows etc) , It's not a "Business market"

If you must book the lowest fare, you're not a sought after customer. They're a dime a dozen and AC's LF is evidence of that

yeg2where

The introduction of rouge and extension of tango would imply that is exactly what they are after. But AC cant make money off them.

I dont have to buy lowest. I cant buy business and cant justify a 50% increase for the same product and a shot at an eup. I have control over my budget, and frankly that would be stupid. There is a significant number of people who fly for business who fall into a similar category. If it was all about J then AC, UA, BA etc would be flying all J aircraft. They aren't.

CloudsBelow

This is the key point.

I'd strongly suggest this is NOT what AC are after ...... Rather, this is what's out there. They are simply catering their product + pricing to the marketplace.

When Air Transat flies more passengers TATL in the peak summer months than AC, it's a very clear sign.

I've played this tune too often here ... I just can't understand the position. People long for a time when AC was on a crash course for BK . . .

yeg2where

I would agree with your first point, but not the last. I'm not suggesting that they should be losing money, but wondering out loud if they are finding that the price differential between tango and flex (for very similar product/restrictions) has driven some (too many?) customers away.

I'm currently making the choice to buy a tickets that are in rare cases cheaper, but more often 10%-20% more expensive than Tango, with no upgradability, for full AQM. I don't have that option with AC. AC wants a 75% mark up for the same seat and an outside chance at R games. Saying that I am willing to pay more than lowest cost for full miles isnt asking for bankruptcy. I'll get to *G, and they'll still pay for my lounge access etc, they just will make less revenue from me than they could.

KenHamer

So they've traded lower fare business travelers who might be inclined to give their loyalty to a particular airline (as well as pay somewhat more than the absolute lowest fare) in return for benefits like lounge access, for occasional leisure travelers who will seek out the lowest fare no matter what.

If AC isn't 'seeking' those low fare flyers, then the solution is obvious - stop offering those low fares. No one is forcing them to offer those low fares.

KenHamer

That presupposes that AC is only 'chasing away' absolute lowest fare passengers, which seems very unlikely to me. After all, I was chased away, and I purchased almost exclusively M and B fares on trans-oceanic flights.

Still as long as they blame the leisure/business ratio for they loss (even some part of it) then they have either attracted too many leisure passengers, or they have chased away to many business passengers. Or both.

My office is a case in point. A few weeks ago we needed to send a substantial team to Singapore (from Vancouver). They went on airlines best described as "not Air Canada", for lower fares, and with better service (i.e. Premium Economy).

Air Canada exists in this market. They can complain all they want, but other airlines are offering better service for lower fares, and making a profit while doing so.

KenHamer

Absolutely.

Desperate airlines treat their passengers very well.

KenHamer

Indeed. And more importantly, many passengers feel they are getting better value from other airlines. They can't afford (or justify) the huge spread between the no FF benefit low fare, and the new, much higher fare that offers an ever decreasing amount of FF benefits.

It's ironic, in that Air Canada just recently took major steps to address this very problem with their FF program -- that is, the new Attitude program, with its evenly spaced 25K intervals. For years, people complained that the spread from 35K to 100K was either insurmountable or not worth it, or both. AC responded (eventually) by making the program more linear.

But now they've just opened a huge gulf in their fares. You either pay a dirt cheap fare and get dumped into the refuse bin at the back of the plane, or you pay a usurious charge to get reduced FF benefits.

A long time ago I wrote a thread called http://www.flyertalk.com/forum/air-c...=super+strings about how airline execs seem to be so far removed from the real world of air travel that there was no possible way they would ever understand their passengers.

Best I can tell, AC still doesn't get it.

KenHamer

Given the way they've apparently recently treated a passenger who bought $50,000 worth of tickets in one shot, and the non-compensation for non-servicable IFE in the J cabins, it would appear that those high fare customers aren't sought after either.

tcook052

When all else fails, blame the weather.