Air Canada pulling back on Tango
Jul 10, 2002, 1:12 pm
#1
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Air Canada pulling back on Tango
http://www.nationalpost.com/financia...-A408230A7BD8}
From today's National Post
From today's National Post
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Air Canada is paring back some Tango operations at summer's end amid lingering questions about the brand's effectiveness in combating discount rivals.
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Air Canada is paring back some Tango operations at summer's end amid lingering questions about the brand's effectiveness in combating discount rivals.
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Jul 10, 2002, 1:16 pm
#2
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For those who don't want to read the article, this is the part I found interesting.
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Finally, the company said Tango was intended to capture traffic from low fare carriers and defend market share. But during June, Air Canada's domestic traffic fell 2.1% while WestJet Airlines Ltd. reported a 52.2% increase in traffic on 65.3% capacity growth.
Analysts have suggested Tango may be stunting Air Canada's mainline business.
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Finally, the company said Tango was intended to capture traffic from low fare carriers and defend market share. But during June, Air Canada's domestic traffic fell 2.1% while WestJet Airlines Ltd. reported a 52.2% increase in traffic on 65.3% capacity growth.
Analysts have suggested Tango may be stunting Air Canada's mainline business.
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Jul 10, 2002, 1:33 pm
#3
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Much ado about nothing:
1. The routes being cut were seasonal to very specific summer vacation cities. All will still be served by AC mainline or JAZZ service. In this regard, TANGO is AC's best way of responding to seasonal need for cheap seats on point-to-point runs. They can add capacity without flying 16 empty front cabin seats. And keep capacity open on the mainline for passengers who want this premiumservice, or economy flyers who may be connecting onto or onward. In the winter months, these TANGO aircraft can be assigned to warm weather destinations or used for charter purposes.
2. True AC may be losing market share on the mainline service, but given it is the dominant carrier, it will alway be losing market share are new entrants -- including TANGO -- enter these routes. As for WEST JET's rising share, we all know when a company is growing it will post quite impressive percentages in this regard. AC is performing better than any of the major full service carriers in the US save for CO.
Of course TANGO will eat into AC mainline's customer base, but better compete with discount carriers this way than totally water down the mainline product, or lose customers altogether -- a factor not considered by this reporter or the analyst whose report he is paraphrasing.
Do you think it was a bad move by Shaw Cable to buy the StarChoice satellite service? StarChoice is taking a lot of cable subscribers away from Shaw, but unlike the case with Rogers [which is losing customers to ExpressVu and StarChoice], these households are still contributing to Shaw's corporate coffers. AC is doing what every major consumer goods supplier has done to stem the move of a certain subset of customers to bargain brands: set one of your own up.
1. The routes being cut were seasonal to very specific summer vacation cities. All will still be served by AC mainline or JAZZ service. In this regard, TANGO is AC's best way of responding to seasonal need for cheap seats on point-to-point runs. They can add capacity without flying 16 empty front cabin seats. And keep capacity open on the mainline for passengers who want this premiumservice, or economy flyers who may be connecting onto or onward. In the winter months, these TANGO aircraft can be assigned to warm weather destinations or used for charter purposes.
2. True AC may be losing market share on the mainline service, but given it is the dominant carrier, it will alway be losing market share are new entrants -- including TANGO -- enter these routes. As for WEST JET's rising share, we all know when a company is growing it will post quite impressive percentages in this regard. AC is performing better than any of the major full service carriers in the US save for CO.
Of course TANGO will eat into AC mainline's customer base, but better compete with discount carriers this way than totally water down the mainline product, or lose customers altogether -- a factor not considered by this reporter or the analyst whose report he is paraphrasing.
Do you think it was a bad move by Shaw Cable to buy the StarChoice satellite service? StarChoice is taking a lot of cable subscribers away from Shaw, but unlike the case with Rogers [which is losing customers to ExpressVu and StarChoice], these households are still contributing to Shaw's corporate coffers. AC is doing what every major consumer goods supplier has done to stem the move of a certain subset of customers to bargain brands: set one of your own up.
Jul 10, 2002, 1:41 pm
#6
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Shareholder:
Much ado about nothing:
1. The routes being cut were seasonal to very specific summer vacation cities. All will still be served by AC mainline or JAZZ service. In this regard, TANGO is AC's best way of responding to seasonal need for cheap seats on point-to-point runs. They can add capacity without flying 16 empty front cabin seats. And keep capacity open on the mainline for passengers who want this premiumservice, or economy flyers who may be connecting onto or onward. In the winter months, these TANGO aircraft can be assigned to warm weather destinations or used for charter purposes.
2. True AC may be losing market share on the mainline service, but given it is the dominant carrier, it will alway be losing market share are new entrants -- including TANGO -- enter these routes. As for WEST JET's rising share, we all know when a company is growing it will post quite impressive percentages in this regard. AC is performing better than any of the major full service carriers in the US save for CO.
Of course TANGO will eat into AC mainline's customer base, but better compete with discount carriers this way than totally water down the mainline product, or lose customers altogether -- a factor not considered by this reporter or the analyst whose report he is paraphrasing.
Do you think it was a bad move by Shaw Cable to buy the StarChoice satellite service? StarChoice is taking a lot of cable subscribers away from Shaw, but unlike the case with Rogers [which is losing customers to ExpressVu and StarChoice], these households are still contributing to Shaw's corporate coffers. AC is doing what every major consumer goods supplier has done to stem the move of a certain subset of customers to bargain brands: set one of your own up.</font>
Much ado about nothing:
1. The routes being cut were seasonal to very specific summer vacation cities. All will still be served by AC mainline or JAZZ service. In this regard, TANGO is AC's best way of responding to seasonal need for cheap seats on point-to-point runs. They can add capacity without flying 16 empty front cabin seats. And keep capacity open on the mainline for passengers who want this premiumservice, or economy flyers who may be connecting onto or onward. In the winter months, these TANGO aircraft can be assigned to warm weather destinations or used for charter purposes.
2. True AC may be losing market share on the mainline service, but given it is the dominant carrier, it will alway be losing market share are new entrants -- including TANGO -- enter these routes. As for WEST JET's rising share, we all know when a company is growing it will post quite impressive percentages in this regard. AC is performing better than any of the major full service carriers in the US save for CO.
Of course TANGO will eat into AC mainline's customer base, but better compete with discount carriers this way than totally water down the mainline product, or lose customers altogether -- a factor not considered by this reporter or the analyst whose report he is paraphrasing.
Do you think it was a bad move by Shaw Cable to buy the StarChoice satellite service? StarChoice is taking a lot of cable subscribers away from Shaw, but unlike the case with Rogers [which is losing customers to ExpressVu and StarChoice], these households are still contributing to Shaw's corporate coffers. AC is doing what every major consumer goods supplier has done to stem the move of a certain subset of customers to bargain brands: set one of your own up.</font>
1D
Jul 10, 2002, 2:10 pm
#8
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by PunishedEdmontonian:
Seasonal! Abbottsford from YYZ?</font>
Seasonal! Abbottsford from YYZ?</font>
On the other hand I think that YXX could be a good year round route from Toronto.
Jul 10, 2002, 3:22 pm
#9
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by exAC:
I think that YXX had to be seasonal due to the labour contracts of the Baggage Handling and Ticket Counter staff. If it was year round, then they would have to open the base for postings from across the system instead of hiring locally.
On the other hand I think that YXX could be a good year round route from Toronto.</font>
I think that YXX had to be seasonal due to the labour contracts of the Baggage Handling and Ticket Counter staff. If it was year round, then they would have to open the base for postings from across the system instead of hiring locally.
On the other hand I think that YXX could be a good year round route from Toronto.</font>
The only reason AC flies to abbotsford with Tango is because their competitor does.
If Tango starts to falter, will it get government money, or just Air Canada money?
If westjet falter, will it get Air Canada money?
Tango's inherant predatory scheme puts a lump in anyones throat who tries to answer those questions....
Jul 10, 2002, 3:25 pm
#10
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Shareholder:
Much ado about nothing:
Do you think it was a bad move by Shaw Cable to buy the StarChoice satellite service? StarChoice is taking a lot of cable subscribers away from Shaw, but unlike the case with Rogers [which is losing customers to ExpressVu and StarChoice], these households are still contributing to Shaw's corporate coffers. AC is doing what every major consumer goods supplier has done to stem the move of a certain subset of customers to bargain brands: set one of your own up.</font>
Much ado about nothing:
Do you think it was a bad move by Shaw Cable to buy the StarChoice satellite service? StarChoice is taking a lot of cable subscribers away from Shaw, but unlike the case with Rogers [which is losing customers to ExpressVu and StarChoice], these households are still contributing to Shaw's corporate coffers. AC is doing what every major consumer goods supplier has done to stem the move of a certain subset of customers to bargain brands: set one of your own up.</font>
Jul 10, 2002, 5:14 pm
#12
Join Date: Apr 2000
Posts: 3,125
Several other Tango routes didn't even get off the ground. (YWG-YOW, for example.)
I do not see any indication that Tango has had any impact on West Jet's loads. West Jet's planes remain full and the company remains profitable. The only flights they are considering cancelling are some ultra-shorthaul runs in light of the new security tax, despite the recent Tango expansion. Meanwhile, Tango has a higher cost structure and is offering lower fares. Tango might be flying passengers who would otherwise take CanJet or JetsGo, but they aren't hurting West Jet at all and likely costing AC a lot of money.
I do not see any indication that Tango has had any impact on West Jet's loads. West Jet's planes remain full and the company remains profitable. The only flights they are considering cancelling are some ultra-shorthaul runs in light of the new security tax, despite the recent Tango expansion. Meanwhile, Tango has a higher cost structure and is offering lower fares. Tango might be flying passengers who would otherwise take CanJet or JetsGo, but they aren't hurting West Jet at all and likely costing AC a lot of money.
Jul 10, 2002, 5:18 pm
#13
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StarChoice pricing matches ExpressVu pricing which is somewhat lower than Shaw or any other cableco's pricing due to the way tiers get assembled.
The issue is if AC matches a competitor's fares, it's called predatory pricing. If it doesn't come close to these fares, everyone here *****es about how uncompetitive AC's fares are, and they are gouging us.
Another flame from Jakpot, I see.
The issue is if AC matches a competitor's fares, it's called predatory pricing. If it doesn't come close to these fares, everyone here *****es about how uncompetitive AC's fares are, and they are gouging us.
Another flame from Jakpot, I see.
Jul 10, 2002, 6:55 pm
#14
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Boy, someone is sure cranky lately.
I have no problems with the concept of Tango per se, however, I do get upset when they switch non-stop mainline/Jazz service with non-stop Tango service and then wonder why the frequent flyers get upset when these switches mean they won't earn Q or Status Miles for the upcoming year. It's crap like this that really gets to me about this company. My example in this case is YYC-YYJ (the afternoon Jazz F28 is now a Tango A320).
BTW, I would think this flight would be a casualty come the fall as it's a YXU-YYC continuing segment.
I have no problems with the concept of Tango per se, however, I do get upset when they switch non-stop mainline/Jazz service with non-stop Tango service and then wonder why the frequent flyers get upset when these switches mean they won't earn Q or Status Miles for the upcoming year. It's crap like this that really gets to me about this company. My example in this case is YYC-YYJ (the afternoon Jazz F28 is now a Tango A320).
BTW, I would think this flight would be a casualty come the fall as it's a YXU-YYC continuing segment.
Jul 10, 2002, 7:31 pm
#15
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At the risk of getting caught in the Shareholder-Jackpot crossfire, I'll add my 2 cents worth on this subject.
The better comparison instead of The Rogers/Bell thing is to Canada Post. Like AC, the crown corporation enjoyed the market to itself for far too long and was only forced to offer customers more choices and services once competition from courier companies started to change the market. AC has made recent changes, like creating Tango, but only because it was forced to. React rather than act. Shareholder is right to say year over year stat's show AC is not in as bad a shape as some U.S. carriers. But I think he/she overlooks the fact that the only reason that has occured is because of the lack of competition north of the 49th. Does anyone doubt that UA would be in better financial shape if it faced much less competition ? AC will always be able to own a certain market segment because of it's size and lack of viable alternatives.
I guess what I'm trying to say is I don't feel sorry for AC's current state of affairs.
The better comparison instead of The Rogers/Bell thing is to Canada Post. Like AC, the crown corporation enjoyed the market to itself for far too long and was only forced to offer customers more choices and services once competition from courier companies started to change the market. AC has made recent changes, like creating Tango, but only because it was forced to. React rather than act. Shareholder is right to say year over year stat's show AC is not in as bad a shape as some U.S. carriers. But I think he/she overlooks the fact that the only reason that has occured is because of the lack of competition north of the 49th. Does anyone doubt that UA would be in better financial shape if it faced much less competition ? AC will always be able to own a certain market segment because of it's size and lack of viable alternatives.
I guess what I'm trying to say is I don't feel sorry for AC's current state of affairs.