wolvie007

Without debating merits of Tango...I feel a personal debt of gratitude for this initiative. I lived in toronto and my girlfriend in Calgary. Started dating 9/11/2001 and got married in 2004. Being new to the workforce at the time, the only way we could afford monthly trips to see each other was taking advantage of tango an it's regular cheap fares and promos. Getting limited status miles didn't matter. Flying yyz-Yyc-Yyc for $200 all in was the best! Oh, and it prevented me from having to eat AC's horrific Y meals on mainline.

sofasurfer

Exactly.

Also factor in potential time from leaving one's house/workplace to being at the gate. Last trip I made ex-YHM, time to get from front door to gate was 35 mins (no checked bags). It can take that long just to get from the entrance of YYZ to the gate!

I've said it before on multiple forums, but it really miss AC's YHM-YUL (on E75/90s, I think?)). Used it once before I emigrated here (back to LHR) and since then can think of many occasions where I (and several colleagues) would have happily made use of that service.

If a LCC can even force WS to up its game ex-YHM (assuming some pax try a LCC, realize its a worse value proposition but like not dealing with YYZ) this could be a good opportunity. I honestly could care less which carrier rises to this possible scenario, but they'd get more business from me and several others I can think of.

HangTen

Actually, the decision to move short haul to YYZ was made because short haul ops out of YHM were losing collectively about $700k a month, and it didn't matter whether fares were $39 or $99.

The number was pretty much the same regardless. A great deal of price elasticity experimentation occurred to find a profitable sweet spot for short haul, and to some degree, long haul.

Especially with short haul, higher fares resulted in lower loads and lower fares, higher loads. However, overall revenue didn't change much in either scenario, which was likely discovered subsequently when both AC and CanJet took a stab at it. Loads had no bearing on profitability, as is always the case.

The collapse of CP and the resultant void in the YYZ market had something to do with the move to YYZ as well, and lest anyone forget, WJ was already operating n/s to western Canada out of YYZ when the short haul move op was transplanted holus bolus.

At the time, WJ was very taken with the Southwest, "scorch and burn" strategy. When they entered high density short haul markets, they never did on a "onesie / twosie" basis. They went in with sched density to be immediately desirable to the business market. WJ wanted to do the same. Trying to do both simultaneously would have been impossible with the existing fleet, the delivery schedule and capacity demands elsewhere. The solution was to pack it up and move it over, literally overnight.

Anyone thinking YHM is an untapped license to print money is in for a rude awakening. Were that the case, Rouges advance bookings would have been such that 60 days prior to launch, the sched gurus at AC would have found a way to rejig sched of the Airbus narrow body fleet, not to mention the emb fleet to make it work.

New Leaf, the latest pie in the sky ULCC scheme, this time trying the ACMI strategy, which has never succeeded anywhere that I know of, thinks YHM is the magic elixir. They foolishly forget that were that the case, WJ, who have been there since 1999, and who have forgotten more than most people know about price stimulation and elasticity in Canada, would have already done it. The same goes for YXX since 1997.

Any copy of Stats Can 51-204 in that era will tell you precisely what the largest markets in Canada were, and even with 14 year old data, pretty much still are. It's not exactly rocket science.

If someone can figure out how profitable a restaurant is by counting how many people walk through the front door, they are pure genius.

Knowing how many people walk through the front door doesn't tell you anything about what they paid, or what it cost to produce the product they paid for. Without that info, I'm not exactly sure what can be gleaned other than knowing a bunch of people walked thru the door.

WJ was consistently profitable in every year of operations for many, many years prior to the events of long ago that are being alluded to.

For that matter, they've been profitable every year since, except for the year they accelerated the depreciation on the -200's to get rid of them early.

OttawaMark

If this is true then why would Ben S., on this very forum, state that AC wanted the flexibility to sell the front of Rouge 319s as all Y when warranted? Surely he wasn't just blowing smoke up our rear ends with his comment.

cur

Only Canada has a talent for finding a way to out-tax, out-regulate, out-formalize everything to the point where it makes no sense to do it (at least legally).

Remember this is a country that levies tariffs on cheese and milk to the point that organized crime syndicates smuggle said contraband north of the border for pizza parlors. So I doubt any type of business model that works in 99 percent of the world would work here especially if that business is a federally regulated one.

I mean, if "legalizing" uber is such a struggle.....

Wallace99

Those tariffs help for pay for my cheap Quebec education

It is hard to make ULCC work here, but someone out there has to be able to figure it out. This is different from the food tariff and quota system. HST/security/ fuel will be the same no matter who operates in the country, it's changing the business model to make it profitable.

- 24 hour airport at YHM may be able to help, I said before expect weird flight times, this will help increase utilization of the planes. Flying longer, more revenue they will collect. I assume they will get a sweetheart deal at Hamilton and Winnipeg for landing and gate fees, plus charge for everything. Water 2 bucks, print ticket 20 bucks, bag too big and found out at gate 100 bucks, need to call? Call the Winnipeg local number, no need to splurge on a 1800#, Plus sell you tourists tickets while on board, while taking a cut.

It is possible to make it work, is it likely sadly I don't think so but as a guy with family all over this country - I'd want it to work.

SparseFlyer

Maybe someone will start a Ryanair equivalent in Canada one day.

They can call it "Bertrandair" or something.

Then we will all miss Rouge.

cur

Rouge is luxurious compared ryanair.

I really want it to work as well but it won't. Ryanair and easyjet fly out of cheap cheap facilities and they were able to have enough say to ensure the facilities are spartan/cheap. $28 AIF is not cheap. Heck I imagine those ULCCs built their own facilities (also notice how in the USA, airlines often pay for their own terminals and upgrades?) And the airports charge extremely high rent + facility costs. And there's probably other hidden crap that we wouldn't think about like corporate+plane insurance costing 5x what it would in the US or something because of some Ontario "consumer protection" law or something. And considering the flashy new airport at YWG, I'd imagine a "sweetheart" deal would cost triple what a spartan airport at the US border would charge. Airports in Canada are amazing rackets, seriously if you want to get rich just get in on one of those "non profits". You should see all the waste that goes on at YYC.

It's not corporate greed, it's government greed. And government is greedy because its citizens want a government that large. And Canadians have the big government that they deserve, whether they consciously want it or not. Just go on the cbc news website, story after story of people wanting more government. So in effect, do Canadians really deserve a ULCC? Do Canadians really deserve affordable cheese and milk? No, they want taxation, they want protection, but they want to b--- and moan when that comes at a price.

And imagine how a whiney Canadian populace would take a Spirit like model....I mean paying more for a carry on? AC doesn't charge for carry ons! The government must do something!

The most rational thing to do if trying to save $$$ at the ed of the day is drive to Buffalo or Bellingham. The regulatory environment is favorable for consumers. Plus the cheese at trader joe's is cheap.

Hello again

You can't say that here. Almost everyone who posts here think they actually do run AC by putting their intellects on display here. Shame on you for attacking a few hundred egos.

You did hit the nail on the head.

yulred

...but for the fact that ULCC's are doing quite alright in heavier taxed and much heavier government regulated Europe. High taxes, strong consumer protection laws...and lots of successful LCCs/ULCCs.

Ben Lipsey

But look where those ULCCs fly: Paris? You're going to BVA. London? LTN or STN. They're not flying into city centres and they're not flying into premium airport terminals and they're not flying dealing with Canadian regulations and taxes and population sparsity. Like it or not, we are a unique market. If we weren't, you would have seen successful ULCCs here pop up just like anywhere else. Ever stop and ask why you don't see that here?

If the three upstarts manage to get off the ground (pun intended), I wish them all the best. Honestly, I think it would make the marketplace interesting for a while if nothing else. But speaking honestly, I'm not sure it's in the cards - how many other Canadian airlines have tried and failed?

yulred

We are, indeed, unique. If the last two-three years have shown us anything, it is that the Canadian market is imbalanced. How else does one explain the whole HD/Rouge phenomenon? In any other market, adding capacity like that would be dangerous. In Canada, the market has absorbed it.

Of course, we should distinguish between a market that is naturally unique, and a market that has become unique by design.

WRT LCCs and 'premier' airports, I know what you mean, but it's worth noting that FR is present at major airports - BRU, BCN, MAD come to mind from personal experience. EZ is similar. Pretty sure it's at LGW. Either which way, the taxes are high, EU consumer protection is extremely strong compared to what we have here, the rail network is impressive ... and LCCs are going strong.

Why haven't we seen it here? Of course we have: Rouge. If AC is so worried about losing price sensitive pax that it feels the need to introduce Rouge/unbundle fares to save money by not paying for services they won't use... then the market probably exists, and it may well turn to cheaper alternatives. The success and failure of these airlines, then, is based solely on their ability to undercut others, not on providing dirt cheap airfares. Can they sell flights for $5, $10, $15+ than AC and WS and still make money? That's the real question. I think they can - Rouge has shown us there is a big market that will tolerate ULCC products.

Ben Lipsey

Well, except the market isn't just Canada. We are making use of our geography to source many pax going to/from the US. Also, looking at one of the primary routes of the 77P (YUL-CDG), that's one of the largest markets out there (next to NYC-LON). Not a LCC aircraft, just one better suited to the market.


True, except that FR benefits from much (legal) cabotage, so can look for the best location to utilise its assets. They have dense population centres. They can also source crews from lower-paying parts of the Eurozone, don't have to worry about paying benefits, they don't have to deal with delays or IRROPS (they just cancel their flights), they don't have employee pensions, they hawk e-cigarettes and car insurance midflight, the seats don't recline, they charge to print BPs at the airport, etc. Which is great for them, they've made a model that works. All this to say rouge is far, far from a ULCC, and I highly doubt any new entrant in Canada will make any money offering $15 fares on YQT-YXE.

I get what you're saying, but personally I believe it's simply a pipe dream.

canadiancow

Damn that would have been awesome for EYW. I assume I could route that through YWG?

yulred

1. The point about the HD aircraft wasn't that it was LCC, but rather that AC can fill those extra seats without shooting itself in the foot, which isn't the case for most markets. I know AC is trying to develop the U.S. market, and while that may grow in the future, it's pretty clear that the recent capacity growth isn't based on US demand for AC. Point being: there is a market that doesn't require a great deal of price stimulation to show up. Again, they don't have to sell $15 fares...only fares that are $15 less than whatever AC is charging. AC sells YOW-YYZ for $350? Sell it for $325.

2. Naturally this is based on adopting the FR model. Yes they have dense population centers, but they also face stiffer competition. Pensions? Let's be clear - we're talking about the McDonaldsization of jobs here. That's how they'll keep costs low.

3. Rouge may not be a ULCC carrier, but the product isn't that far off at the back. Which is what these ULCCs are targeting. Rouge is an incredibly poor value proposition. The only thing a ULCC has to do to trump it is sell it at a lower price. The difference in the product won't influence decisions.