YXUFlyboy

Now that U.S. airlines are catching up (and some would argue have caught up and surpassed for some products), how is AC still pricing their domestic J so high? I fly primarily domestic and trans-border, and anything YYC-YYZ is $2000-2500 one way in paid J, yet you can bid up for $400.

On routes where AC competes with UA, they drop their J to match UA's pricing (e.g., YYC-LAX or YYC-IAH) to more sensible $500-800, which they are doing because of competition. Some may say that AC has no competition in Canada, so they can charge what they want. But AC loses my business to connect to the eastern U.S. via YYZ because they want ridiculous money for paid J and they only pay out 25% miles for any Tango segment (whereas if I go through the U.S., I get 50% even on low Y fares and if I take any segment ex-YYC via the U.S. I get paid J for a reasonable price). Add in lack of consistent OSS in YYZ and there's no way I'm connecting through there without any other option. Why don't they want my money?

It would seem to me if they lowered domestic J to something more sane, they'd get more revenue and more paid pax. Is it the COS bonus they are worried about?

I don't fly enough to get much of status but I am one of those customers where my AQD would exceed the thresholds easily if they just would make it easier to fly them. On pure revenue I'm not a bad customer, but I just can't justify their crazy J fares.

Wpgjetse

Because they can sell J at that price? Normal low J on the YYC-YYZ route is around $1450 to $1550. If the price is higher, basically AC has sold that seat. Also, lat passes, upgraded do fill a lot of seats also and don't forget about international pax.

YXUFlyboy

I would question that. I would say on many flights, 2/3 of them are upgrades and 1/3 at most are actual paid fares. And I would pay latitude fares if it meant I could upgrade T-48 like a lat pass

skybluesea

Call your friendly MP, and write to Minister Garneau and demand true Open-Skies.

So by comparison to your trans-con J class, I'm leaving Friday, P class return YVR-HKG for $3,500 on +/- 12 hour flight. Connecting to Hong Kong Airlines to Denpasar (Bali) in Z class on +/- 5 hour flight with lie-flat seats for $1,000 return.

Canadian families are being disconnected from each other and the world because of nonsense view that only Canadian investors should be permitted to own Canadian airlines. Why NOT big push from central Canada for more competitive offerings - well true low-cost carriers on triangle route YYZ-YUL-YOW would really upset the Canadian business establishment who love the high fares that pay for frequent flyer benefits - and how many are paying taxes on this deemed income.

So OP, what are you doing about this? Posting to FT might make you feel better, but easy to take action - MP and Garneau are easy to reach - and NO cost for postage when writing to Parliamentarians.

Wpgjetse

I would agree with you that 2/3 upgrade(most likely higher) on full J fare only, but I was talking about low J. which AC does sell a lot of these seats.

Thatguyatthebar

ugh. Why do people have conversations at the dinner table about things that annoy them; why do some people post things to Facebook? Maybe because they want to talk about things with like minded individuals (or open minded conversationalists). Maybe they aren't looking to change the world and don't have time to shake things up. Not every conversation needs an end game.

CanRulez

Can we also send an email?

JordanYVR

I'll be on that flight as well (assuming AC7 on Friday) but in PY.

YXUFlyboy

I think you missed the point of my post. What I'm saying is - I don't think it makes business sense for AC to do this. Forget government regulation, open skies, etc., in the protected market we have now, it still doesn't make sense to me because they are literally telling me to give all my money to U.S. carriers and leaving money on the table for J domestic fares. I can suck it up in Y+ on WS if I had to or on a preferred seat. But if they would only bring fares closer to reason, I'd pay. Someone explain the economics to me here.

ridefar

I don't know if this is the right explanation, but here is one that makes sense to me: domestic J (particularly on the route you mention, YYC-YYZ) is highly price insensitive. There is a set of flyers who have corporate travel policies that permit them to purchase J. That set is small. For everybody else, it doesn't matter if it is priced at Y + $200, it is not allowed. Is there a point where even the set of J flyers will balk? Yes, no doubt. But I bet it is set just below that point. They sell as many as they can. My guess is < 25% on that route. The rest go to upgraders, international connections, and Lat FP users. And staff. But I think is the reality for that route.

skybluesea

I understand AC remains competitive where comparable product exist e.g. against U.S. full service carriers, but your question is why Domestic J so high?

Others have posted already the answer - because WS product is NOT comparable, and CDN marketplace is regulated in a manner that avoids a full-service product becoming available given the scale needed in the marketplace.

Let's not forget that schedule density matters, as business travelers need more than just a seat, but schedule timing of that seat can be even more critical - so yes, flying Y maybe OK if the flight goes at the time you need. Thus, entry into the CDN full-service market will require some heft and willingness to invest in going up against the incumbent AC.

The likelihood of such a change involving major new external competition is low, especially as current Liberal gov't prefers to use more regulations, e.g. passenger protection to fix some market failures.

But of course you are free to purchase a car built elsewhere, and even fly in an airplane built in EU/US, but the operator of such aircraft shall be a majority-owned Canadian investor.

I understand the politics of all this - but the economics takes 2nd place to such electoral calculations.

YXUFlyboy

If you think the current federal government is going to do anything to weaken the advantages AC enjoys for a Montreal based airline, you are smoking something. And let's not even go into the interest free loans they gave Bombardier before Bombardier decided to jack up the executive pay.

I should probably re-word the title of my post from domestic J to trans-border connections including domestic J legs. But I still think AC could get more revenue from lowering the J fares.

skybluesea

Not sure why you would consider my response as supportive of AC, and its "Montreal" advantage.

Please search my many posts that make quite clear that I have pointed out this problem many times before - but often get ridiculed by those who support the current non-competitive environment.

YXUFlyboy

No - it's not that you are supportive - I'm saying there's no federal government who would be willing to stir that pot and especially not the current one whose base of power is Ontario and Quebec.

jjclancy

There's a whole department of AC staff working on this problem. It's called Revenue Management. And you think, without access to the reams of data that they have, that you can do better?

They might have openings if you want a career change.