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AC increases YYC-LHR, decreases YEG-LHR for S15

AC increases YYC-LHR, decreases YEG-LHR for S15

Old Feb 26, 15, 4:31 pm
  #151  
 
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I wonder what AC's actual numbers out of YEG look like? I noticed that this upcoming summer, AC seems to have added some extra capacity out of YEG. Some random dates in July and August show impressive domestic capacity:

YYZ- 10x daily, mix of A320 and A321, including 2 red eye flights (320 and 321-sure wish it would just be a 763).

YUL- 3x daily (one of each 319,320, E90).

YVR- 9x daily (half E90, half 320).

In particular, YUL surprises me. That flight is usually 1x daily, plus an E90 via YOW.

I know a lot of people in YEG are angry that AC is "abandoning" them, but just taking a quick look seems to suggest that AC is making up, at least in part, for the loss of LHR with increased options to hubs that offer more connection options...
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Old Feb 26, 15, 4:53 pm
  #152  
 
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Originally Posted by nave888 View Post
I wonder what AC's actual numbers out of YEG look like? I noticed that this upcoming summer, AC seems to have added some extra capacity out of YEG. Some random dates in July and August show impressive domestic capacity:

YYZ- 10x daily, mix of A320 and A321, including 2 red eye flights (320 and 321-sure wish it would just be a 763).

YUL- 3x daily (one of each 319,320, E90).

YVR- 9x daily (half E90, half 320).

In particular, YUL surprises me. That flight is usually 1x daily, plus an E90 via YOW.

I know a lot of people in YEG are angry that AC is "abandoning" them, but just taking a quick look seems to suggest that AC is making up, at least in part, for the loss of LHR with increased options to hubs that offer more connection options...
The increase in domestic capacity is the best indicator that Air Canada is filling demand to the cities that have demand. The demand (and dollars to spend) is not LHR or anywhere else in Europe.

Don't forget that last year the problem that Air Canada had with Icelandair coming into the market was when the airport authority stood up at the press conference and stated 'Now you do not have to go to that horrible airport -LHR'.
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Old Feb 26, 15, 5:17 pm
  #153  
 
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Originally Posted by PLeblond View Post
Makes sense.

I still think if there was profit in the route, it trumps politics.... but what do I know? I live in the biggest city in North America without commercial air service because of 'politics'...
Well, it does look like a case of politics, with AC's aim being to increase profits. When FI got concessions, AC saw an opportunity to get concessions and boost (or protect) its own margins (doubt it was running non-profitable break even operation). YEG refused and it resulted in a public disagreement, with AC pulling services, which reflected badly on YEG.

I suspect YEG went into marketing overdrive after that, and offered KL all manner of incentives (politics, once more). KL agreed (which AC probably wasn't expecting- no one was). YEG will probably pass on the cost of those incentives to other airlines using YEG, including AC - with pax numbers increasing, I doubt they're going to lose service by marginally increasing costs.

Fun times.
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Old Feb 26, 15, 6:10 pm
  #154  
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Originally Posted by yulred View Post
Well, it does look like a case of politics, with AC's aim being to increase profits. When FI got concessions, AC saw an opportunity to get concessions and boost (or protect) its own margins (doubt it was running non-profitable break even operation). YEG refused and it resulted in a public disagreement, with AC pulling services, which reflected badly on YEG.

I suspect YEG went into marketing overdrive after that, and offered KL all manner of incentives (politics, once more). KL agreed (which AC probably wasn't expecting- no one was). YEG will probably pass on the cost of those incentives to other airlines using YEG, including AC - with pax numbers increasing, I doubt they're going to lose service by marginally increasing costs.

Fun times.
Interesting.

I'm still not sure I buy the AC pulling out because FI got rights.

Why on earth would AC be wary of FI. Iceland is a tiny market ad every other place they serve is 1 stop no wide-body, no alliance.

It sounds more to me like the profitability wasn't there so that move became a justification (publicly) to pull out and blame the airport for it.

Politics on that level, I would accept. But $ motivate the decision, politics are just the show for the people.

Again... what do I know....
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Old Feb 26, 15, 8:45 pm
  #155  
 
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Originally Posted by yulred View Post
I suspect YEG went into marketing overdrive after that, and offered KL all manner of incentives (politics, once more). KL agreed (which AC probably wasn't expecting- no one was). YEG will probably pass on the cost of those incentives to other airlines using YEG, including AC - with pax numbers increasing, I doubt they're going to lose service by marginally increasing costs.
EIAA are likely to pass on a portion of the incentives to YEG passengers as well possibly?
Let's not overthink this. Airlines send $100m machines where they're most likely to return a profit ... IMO, Airport authorities spending public money to incentivize otherwise unprofitable flying is a terrible deal. Why don't any of the big Energy companies in YEG step up and underwrite LHR/AMS service like Glaxo does on RDULHR? Why would an airport authority decide which services YEG should receive that cannot be supported solely with business, leisure and cargo demand?

Not sure the role of an airport authority is to simply get more flights. I'm sure the passengers ex MYR can't be thrilled with the deal their airport authority handcuffed them into with WS/AC. It's fair to wonder how realistic some of the assumptions EIAA used to get the KL business case above water.
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Old Feb 26, 15, 9:08 pm
  #156  
 
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Originally Posted by PLeblond View Post
Why on earth would AC be wary of FI. Iceland is a tiny market ad every other place they serve is 1 stop no wide-body, no alliance..
They go many places in Europe with one connection, and KEF is an easy airport to connect in, certainly easier than LHR or FRA. I see KEF as a mini atlantic DXB: nobody goes there, but many will connect there. Emirates isn't in an alliance either and they seem to be doing just fine.

Certainly for a leisure traveller the absence or presence of an alliance really isn't that important if the airline has an interline agreement and can get you where you want to go on one ticket. Again in Y; wide body, narrow body, who cares? It doesn't make any difference.
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Old Feb 26, 15, 10:26 pm
  #157  
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Originally Posted by Jagboi View Post
They go many places in Europe with one connection, and KEF is an easy airport to connect in, certainly easier than LHR or FRA. I see KEF as a mini atlantic DXB: nobody goes there, but many will connect there. Emirates isn't in an alliance either and they seem to be doing just fine.

Certainly for a leisure traveller the absence or presence of an alliance really isn't that important if the airline has an interline agreement and can get you where you want to go on one ticket. Again in Y; wide body, narrow body, who cares? It doesn't make any difference.
For the leisure traveller, I agree. Those looking for a cheap Y, absolutely.

In essence, using your post, you're confirming why AC would want to pull out.

(DXB allows people to switch 2-3 stop itineraries with 1 stop. Plus Emirates gets the high dollar traveller.)
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Old Feb 26, 15, 11:19 pm
  #158  
 
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Originally Posted by PLeblond View Post
Plus Emirates gets the high dollar traveller.)
They do plenty of "value conscious" travellers to India from North America and Western Europe too.
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Old Feb 26, 15, 11:22 pm
  #159  
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Originally Posted by nave888 View Post
I wonder what AC's actual numbers out of YEG look like? I noticed that this upcoming summer, AC seems to have added some extra capacity out of YEG. Some random dates in July and August show impressive domestic capacity:

YYZ- 10x daily, mix of A320 and A321, including 2 red eye flights (320 and 321-sure wish it would just be a 763).

YUL- 3x daily (one of each 319,320, E90).

YVR- 9x daily (half E90, half 320).

In particular, YUL surprises me. That flight is usually 1x daily, plus an E90 via YOW.

I know a lot of people in YEG are angry that AC is "abandoning" them, but just taking a quick look seems to suggest that AC is making up, at least in part, for the loss of LHR with increased options to hubs that offer more connection options...
YEG may be a spoke, but it's a big, fat spoke. Any increase in the AC capacity to YYC? Is YEG AC's largest station outside the 4 hubs, or does YOW or YHZ pull-in more AC daily departures and passengers?
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Old Feb 26, 15, 11:28 pm
  #160  
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Originally Posted by Jagboi View Post
They do plenty of "value conscious" travellers to India from North America and Western Europe too.
Yes. They get both. But I'll bet you dollars to donuts that is the ones flying upfront stop flying them, their model will change drastically.

Basically the 'value conscious' travellers are the cherry and sprinkles on the sundae.
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Old Feb 26, 15, 11:57 pm
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YEG can keep all the KLM they want. I'll take AC int'l J over KLM 100% of the time, speaking from experience.

Last edited by Dorian; Feb 26, 15 at 11:58 pm Reason: missed a word
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Old Feb 27, 15, 5:52 am
  #162  
 
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Originally Posted by PLeblond View Post

Why on earth would AC be wary of FI. Iceland is a tiny market ad every other place they serve is 1 stop no wide-body, no alliance.

It sounds more to me like the profitability wasn't there so that move became a justification (publicly) to pull out and blame the airport for it.

Politics on that level, I would accept. But $ motivate the decision, politics are just the show for the people..
Perhaps.

In the case of the London, Heathrow service, our analysis shows the impact of subsidized competition on our year-round operation will make it unviable, and we decided to cancel our less-profitable winter operations. We will continue to operate this service in the summer, but we determined we could no longer cross-subsidize the winter operations in this environment.

http://globalnews.ca/news/927476/air...ness-decision/
And Ben S. on the first YEG thread.

I believe the market is better served by a year-round YEG-LHR vs a 757 operation on YEGKEF. The market cannot support both except in the peak months.
Was it profit driven or political? Your guess is as good as mine. AC referenced 'subsidized competition' as a reason, and also indicated the market wasn't big enough. The folk at KL (who may or may not know what they're doing) paid little notice to AC's claim about year-round service...by launching year round service, which makes one wonder how much truth there is in AC's claim? More to the point, would AC stay if it got the same subsidies as its competition? Was this simply a strong arm tactic?

Maybe. Maybe not. Maybe it's a simple case of KL being a more efficient carrier, effectively making the route more viable for it than it was for AC.
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Old Feb 27, 15, 7:01 am
  #163  
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Originally Posted by yulred View Post
Perhaps.



And Ben S. on the first YEG thread.



Was it profit driven or political? Your guess is as good as mine. AC referenced 'subsidized competition' as a reason, and also indicated the market wasn't big enough. The folk at KL (who may or may not know what they're doing) paid little notice to AC's claim about year-round service...by launching year round service, which makes one wonder how much truth there is in AC's claim? More to the point, would AC stay if it got the same subsidies as its competition? Was this simply a strong arm tactic?

Maybe. Maybe not. Maybe it's a simple case of KL being a more efficient carrier, effectively making the route more viable for it than it was for AC.
Maybe KL does not fully understand the market, and will cut YEG at the end of summer.
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Old Feb 27, 15, 7:16 am
  #164  
 
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Originally Posted by yulred View Post
Was it profit driven or political? Your guess is as good as mine. AC referenced 'subsidized competition' as a reason, and also indicated the market wasn't big enough. The folk at KL (who may or may not know what they're doing) paid little notice to AC's claim about year-round service...by launching year round service, which makes one wonder how much truth there is in AC's claim?
C'mon yulred. Don't play these games.
You know very well AC's unit costs on a 767 service in/out LHR are significantly higher than KLM's A330 service to AMS. And that's before the incentives EIAA greased them up with.
Originally Posted by yulred View Post
Maybe it's a simple case of KL being a more efficient carrier, effectively making the route more viable for it than it was for AC.
By more efficient, you mean KLM's advantage of having denser, less-premium cabin configuration, right?

Originally Posted by Wpgjetse View Post
Maybe KL does not fully understand the market, and will cut YEG at the end of summer.
Remember, KLM's "market" for TATL operations exYEG includes the undisclosed incentives.
I will be the first to admit there is true viable demand for KLM in YEG if they a) permanently upgauge services beyond A330, b) increase frequency, OR c) continue to operate the route thru the W16/17 season

Until then, we know AC had TATL services. We know YEG incentivized FI to come to town. We know AC said the market wasn't there for Winter operations with another player in the Market. We know EIAA incentivized KLM to come. We know AC clawed back a previously profitable Summer operation.

Last edited by tcook052; Feb 27, 15 at 7:33 am
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Old Feb 27, 15, 4:35 pm
  #165  
 
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Originally Posted by CloudsBelow View Post
C'mon yulred. Don't play these games.
You know very well AC's unit costs on a 767 service in/out LHR are significantly higher than KLM's A330 service to AMS. And that's before the incentives EIAA greased them up with.

By more efficient, you mean KLM's advantage of having denser, less-premium cabin configuration, right?
AC 767 in/out of LHR are significantly higher than KL's 330? Sure. My response (can't stress it enough): so what?

What AC can and cannot provide is not YEG's (or YEGers) problem. They don't have to support AC's more expensive operations if they think FI and KL are acceptable substitutes (if not, they can pay whatever AC wants them to).

About denser aircraft, scroll upthread - I already said YEG-FRA on Rouge might not be such a bad idea.

Last edited by yulred; Feb 27, 15 at 4:46 pm
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