eigenvector

While you are correct that it is the job of AC senior management to promote AC's interests, as is the case for every business, that does not necessarily extend to the level of making asinine remarks and/or demands that are clearly anti-consumer. Cultivating a positive, customer-focused image is also in a business's interest, as is thinking long-term rather than short-term.

A miniature example of this: think back to any time an AC employee bent a rule for you when you were in a tight spot (IRROPs, etc.). Did something they didn't have to do or at least could have charged you a hefty fee to do. Were you grateful? Did you leave that encounter with a more positive impression of AC and its brand? Charging someone up the arse now, just because you can, is not always the best long term strategy to maximize revenue. Both in small interactions like this and in the bigger picture.

Of course it is in AC's best interests if the government stops Porter from upgrading their hub in order to better compete with AC and WJ. However, do you see WJ's CEO in the news making idiotic remarks about how PD is ruining the Toronto waterfront when we all know that AC would give an arm and a leg to have PD's position at YTZ and capitalize on it themselves? AC should focus on better competing with PD by improving the product they can offer out of YYZ rather than trying to stifle competition while claiming that they're doing us a favour, which just leaves Canadians (AC's customers) with a bad taste in their mouth.

Yes, AC needs to make money, and I think we as Canadian FFs should all be happy to see our national flag carrier in increasingly solid financial shape and not on the verge of bankruptcy as it was for many years. But being a good business executive is not as easy as putting short-term profit first 100% of the time. If AC can successfully transform itself into a globally competitive airline such that it no longer needs the domestic protections that it currently enjoys, that will only be to the benefit of AC itself and its shareholders, as well as its customers. Stupid stunts like lobbying the federal government to restrict foreign carrier landing slots at YYZ do not help in this regard.

Sean Peever

to clarify, I never suggested that AC should not help out in IIROPS or do the other things in your example. If those things make the FF happy, and make the FF continue to buy tickets from AC then, it is in the best interest of AC to do that - because they will continue to get business.

I was not suggesting that they should maximize profits at all costs and piss off everyone. I was suggesting they do things that are in the best interest of the company.

Having fliers fly their airline instead of others is int he best interest of the company.

eigenvector

Didn't mean to put words in your mouth. Sorry if I sounded like I was doing that. I think we just have slightly different ideas of what "in the company's best interests" means.

Transpacificflyer

Thank you for taking the time to respond to my comment. As an investor and customer of AC, I do value the comments of AC. In respect to the term monopoly, its use should not come as a surprise to you as it has been a frequent description applied by regulators, industry experts & observers, and customers.

Let's take a quick walk down memory lane and refresh your memory. October 2002 will serve as a starting point. The Parliament of Canada issued a summary report that provided a grim assessment of Canada's airline sector competition. The report (TIPS -45E) opened with this statement: Since the deregulation of the Canadian airline industry in 1987, Canada’s domestic airline industry has gone from a virtual Air Canada monopoly to a duopoly with Canadian Airlines International Limited (CAIL) and now back to a monopoly with the merger of Air Canada and CAIL. Leading up to that report, Briefing Paper 82-9E asked a rather tough question, Is the travelling public being adequately protected from any potential abuses of Air Canada’s monopoly-like position in the domestic market?
There is that pesky term monopoly that you insist doesn't exist in Canada.

Sure, a lot has happened over the years. We have Porter and we have West Jet now. The appearance of a few airlines over a relatively short time period cannot be expected to change market characteristics that have been in place for 60+years. Some airlines have come and gone. The reality though is that outside of large urban centers, there isn't much competition for the smaller population centers. I don't blame any airline for this situation, as there are some legitimate financial reasons why there isn't competition. However, the fact remains, that when there is no competition on a route, a monopolistic condition can arise.

History indicates that monopolistic trade practices have been a part of AC's operations.. Let's jump into the time machine again and go back to 2011. Remember when AC announced it was going to realign its trans-border routes in conjunction with UA? The federal Competition Bureau said that would create a monopoly on 10 major routes between Canada and the U.S. and substantially reduce competition on nine others. The commissioner Melanie Aitken, stated that "If allowed to proceed, consumers will face higher prices and even less choice on key, high demand air passenger routes." The competition board also went after the three existing "co-ordination agreements" between Air Canada and United which allowed the two airlines to reduce competition through joint pricing and scheduling as well as revenue sharing. (This situation was compounded because of the previous United Continental merger).

Industry observers have been more aggressive with the use of the term monopoly and have often used examples of AC screw-ups to illustrate the costs associated with the perceived monopoly. I believe that the classic illustration was James Cowan's (Deputy Editor) article in Canadian Business. http://www.canadianbusiness.com/comp...-less-hellish/ He was rather rough with AC, but he did raise two important issues which you have attempted to brush away. 1) Foreign ownership and 2) Additional Air Freedoms.

AC has opposed an increase of the 25% foreign ownership cap on Canadian airlines. This cap has acted as a trade barrier discouraging additional competition. The ability to attract foreign investment has been a winning proposition for consumers. This has been demonstrated by Delta's 49% ownership of Virgin Atlantic (replacing Singapore Airlines) and the initial 29% investment by Etihad in Air Berlin. (Foreign investment increases to 41%+ once the Turkish Pegasus investment is included.)

Foreign investment allows an airline to raise capital at a lower cost than conventional means and finances expansion and growth of an airline. If Porter or West Jet had the ability to tap into the deep pockets of an Emirates, Delta or Southwest, it would change the competitive environment in Canada forever. The 25% rule is in effect a competition barrier which acts in AC's favour because it prevents Canadian airlines from accessing capital.

Air Canada has opposed additional air freedom expansion in Canada. The airline isn't alone on this issue as it is joined by many of the North American legacy airlines who don't want additional competition. The fact that cabotage is still forbidden in Canada speaks volumes. Due to the need to serve multiple locations to make some routes viable, a strong case can be made for cabotage in Canada.

You mention bilateral arrangements. Unfortunately, you present these agreements as if they opened Canada to unfettered competition. Under the Blue Sky Air Policy here has been some broadening of market access. However, as the Parliament of Canada report states, this has not been much of a liberalization. Many of the bilateral air transportation agreements negotiated under Blue Sky, however, are not as permissive as those made under the U.S. Open Skies policy. Indeed, some have argued that Blue Sky does not go far enough to provide access to the air transport market in Canada. They say Canada’s overall air transportation policy remains, to a degree, protectionist. For example, the western provinces, and particularly British Columbia, have expressed concern about the lack of progress in easing restrictions on air services between Canada and important Asian destinations, especially China and India. Other commentators have argued that Blue Sky, rather than being an Open Skies–type policy, is a modest evolution of the previous bilateral regime, with liberalization provisions in agreements that are only modestly incremental to previous agreements and in many cases, not yet implemented. (Source Hill Notes 2012-05)

Air Canada of course has a different opinion.

In respect to rumoured new air carriers, let's wait and see. In the interim, I note AC's behaviour when it comes to the presence of competitors. AC said it would counter Porter's expansion at Billy Bishop. Then AC actively opposed Porter's proposal to introduce quiet jet service. To what end? I doubt AC was doing it out of concern for local residents. Then AC threatened to pull out of the airport. Up and down like a toilet seat. The public can draw its own conclusions.

In consideration of the aforementioned, I believe that Air Canada has indeed benefited from a past monopoly on many of its routes and continues to benefit from a state supported protected status. This doesn't mean, that I disagree with some of these protections. nor that I want AC's presence to be diminished. On the contrary, I believe that AC is important for national security and the national economy. However, it would serve public interest to be open about all of these things and not pretend they do not exist. It also means that Canada and the provinces must address the inequities arising from airport monopolies and a punishing tax environment which hurts AC and the other airlines.

bizorbetter

Absurd. Name another canadian based multiple cabin international airline. ie Southwest 'competes' with AA, DL, UA but are not equal competitors. The same can be said for westjet and porter. I support canadian business and don't want EK, the big three US guys etc with full access as AC would unfairly be put out of business. But stop saying AC doesn't and hasn't had zero pure competition and several forms of federal protection and assistance.




Change the practice/culture not the image. (one might suggest a more contrite start to a sentence rather than a sarcastically dripping 'golly') .....and in essence that is the issue. The inflight people at AC are as good or better than many airlines. But once you get to Corp it seems there is a disdain for the pax and I have had myriad personal experiences of this. I have shared some hear but there are many more that i haven't even approached the airline with because it is a waste of time.

P.S. is the apparent practice of literally measuring peoples carry on whilst boarding part of the efforts towards improving the image?




if only

FlyerTalker683455

Ben:

This is just another example of the type of unhelpful posts which serve to dis-endear AC to their customers. Almost sounds like "don't let the door hit your back on the way out" kind of commentary.

If AC is doing good things to improve customer service and deliver on its promises and obligations, then state it clearly. If AC screws up, own up to it. But this wishy-washy type of talk about "we don't fly to BKK" or "what monopoly are you talking about" is just aggravating the general atmosphere of mistrust a lot of the public have in AC.

AC serves its own interests first, at all times. Anything AC does which appears customer friendly is carefully calculated to assure not more is given than received. AC has one-sided rules which it applies with vigorous attention to details, to the point of harassing (luggage weight/size) its best customers. AC doesn't even manage to clearly issue tickets with relevant conditions matching the fare base (e.g., change fees are often listed wrongly, fare codes don't match class of service purchased etc etc.).

The customer experience with AC as SE is bearable. I can't imagine what it's like to be a non status flier on AC or other airlines, for that matter. AC has proudly taken the leadership role in passenger alienation and is still unable to halt its race to the bottom. AC keeps piling responsibilities and duties, complexities and restrictions on the backs of its agents and employees while unable to fulfil basic operational details, such as keeping planes clean, or having an agent meet arriving planes at the gate (YOW anyone?!), or even opening the wrong door on international arrival. The IT infrastructure is a disgraceful mess, made worse by AC's "simple fares" which are a byzantine labyrinth of unintelligible garbage. But, AC executives pride themselves in their ability to extract extortionist fees and charges, cramping more sardines into their tin cans and pretending that POD coffins are a progress in luxury air travel.

So, I really think your aloof statements are poorly placed on a site like FT, where you should wish to be seen as a passenger advocate and someone clarifying day-to-day issues instead of philosophizing about the grandeur of AC's aristocratic air empire.

rankourabu

As they should.
Anyone thinking differently is delusional.

And as for no-status flying, there are plenty of airlines that treat all customers fairly, and act like they want their (non-status) business.

To paraphrase a post in a different thread (that "didnt mean to be flippant")
Bugger off, AC is making money, vote with your wallet.

Ben Lipsey

And what's stopping one from starting service?

Give and ye shall receive. A flippant statement that "AC acknowledges this and refuses to address it" is patently false. I have no disdain for pax, on the contrary I am a huge passenger advocate, but I'm not here to simply pay lip service.

FlyerTalker683455

I would say they should not only serve their own interests if they operate within a protected environment, which unarguably they are (to which extent is a different story).

And, once again, buggering off is not an option to those of us flying internationally from second tier cities.

From Fraser Institute:

"How can we explain the regulatory decisions that provide subsidies to Air Canada at the expense of the Canadian public? Research has shown that the design and operation of regulation often is hijacked by the regulated industry to serve its own interests rather than those of the public. One reason for this result is that advice to the regulators predominantly comes from the people in the industry, who are the best experts available, but who also know what the industry’s coveted interests are—and in fact also regularly consult for the existing industry players. That means consumers are ill-served.

Politicians also influence regulatory rules and decisions since they know that any policies that affect adversely the interests of Air Canada result in the loss of votes from the employees and other beneficiaries of Air Canada, while the public is either ignorant of or not interested in casting their votes in opposition to these policies.

It is high time Ottawa stopped providing Air Canada with corporate welfare through its regulatory decisions and allow full international competition. Air Canada has an excellent brand name, management and staff. It can and will survive, if not prosper, without government protection.
"

Stranger

Seriously, you believe that?

Otherwise sure, they like having it both ways. Not sure if there is an alternative though. If WS would turn into a full service airline and go overseas OTOH...

FlyerTalker683455

That's a quote from the Fraser Institute. Do I believe AC has excellent management? No. That would be funny for me to say that. Then again, I am not sure any excellent executives would want to work for an airline.

Stranger

I realize that.

I suspect the Fraser Institute was disingenuous in the first place. I usually disagree with their ideologically driven stuff. In this instance I suspect their real view is that they wouldn't cry if competition would open to foreign airlines and AC would disappear from the map.

Which arguably would not do much good to people with traveling patterns such that they are currently more or less stuck with AC. Like I am and probably you too?

bizorbetter

economies of scale and governmental relationships (and irrational consumers but that's an opportunity for you so i don't blame you for leveraging that). But in fairness that wasn't what i said. I was stating there is no current true competition and you and your corp keep stating that there is.

As i have also said Calins duty is to do exactly what he is doing, maximizing shareholder value etc. I just don't like the way the company does it and really feel strongly that it could be done without the 'poor customer service image' as you put it.



Those of us in 'non-monopolistic' industries have to do it every day .....point made???

FlyerTalker683455

No I definitely don't want to see AC disappear. They are a necessary service for Canada. But they shouldn't pretend that they can a) do without some protection, or that the protection they receive isn't that, and b) they are just operating as any other business does in Canada, which is patently false.

bizorbetter

agree