Do you believe this... ?

Old Mar 15, 05, 6:05 am
  #1  
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Do you believe this... ?

" Canadians are already paying substantially higher ticket prices for many major domestic routes since Jetsgo ceased operations last week, according to an analyst's report.

The average price of a one-week advance WestJet fare bought yesterday was nearly 50 per cent higher than it would have been had the same flight been booked the previous Monday, according to Desjardins Securities, a Montreal brokerage.

The cost of a WestJet ticket booked three weeks in advance during the same period jumped 20 per cent, according to the study.

Desjardins Securities said that during the same period, a three-week Air Canada advance ticket was nearly a third higher than last week. A one-week advance ticket was 16 per cent higher.

We're going back to some of the higher levels we've seen. And the reaction was immediate. WestJet seemed to jump up very quickly, and Air Canada has responded in kind," study co-author Chris Couprie said." G&M

http://www.theglobeandmail.com/servl...tory/National/
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Old Mar 15, 05, 6:22 am
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Since I still haven't booked air for my cruise out of LA next January, I'm still checking fares quite frequently. I noticed that the fare hasn't changed for that on Westjet (YYZ-YYC-LAX), although I can't see that being any kind of demand. I would have to really really want to fly WS to go through Calgary to get to LA LOL

On AC, YXU-YYZ-LAX is up $12 each way since Thursday, and YYZ-LAX is up $26 each way. But the YXU departure has been going up steadily for 6 weeks. It was $174 each way the day the schedule opened up, and immediately went to $191, then to $203 a couple weeks ago, and to $215 Friday. I based that more on fuel prices than any cut back in competition. Not that Jetsgo was any competition on this route, since they didn't even do it on weekends.
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Old Mar 15, 05, 6:29 am
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Supply and demand,airbus320.
I am in business as well and know all too well what price wars are all about. .
I understand why AC and Westjet need to raise their prices.IMO this is long overdue.

I can hardly wait until the next guy jumps in and starts the spiral all over again.
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Old Mar 15, 05, 8:41 am
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Wait for the situation to stabilize. Immediately after it does, I'll bet you that WS launches a seat-sale that goes for AC's jugular. This ain't over until WS either gets driven back out of eastern Canada or accepts the market share it gets as a discount carrier. So long as it has dreams of being something greater than what it is, this is going to go on.
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Old Mar 15, 05, 8:51 am
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There was a fare hike last week initiated by Northest (I believe), it was reported that AC matched those increases, so the increases in fares could be as a result of that rather than SG going under.

This industry is so complex, I doubt that the reason for the increases could be narrowed down to just one factor.
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Old Mar 15, 05, 10:37 am
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Originally Posted by the happy booker
Wait for the situation to stabilize. Immediately after it does, I'll bet you that WS launches a seat-sale that goes for AC's jugular. This ain't over until WS either gets driven back out of eastern Canada or accepts the market share it gets as a discount carrier. So long as it has dreams of being something greater than what it is, this is going to go on.
And as a consumer, I'm going to love it.
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Old Mar 15, 05, 11:15 am
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Originally Posted by YOWkid
And as a consumer, I'm going to love it.
Good short term thinking. What happens when they fight it out and the loser follows Jetsgo? Then the remaining carrier props up fares to a profitable level or higher. You have no choice which airline to fly. Let's let history repeat itself over and over again, with a bloodbath in the airline industry every few years, where some consumers get deals for a while, and others lose big when an airline collapses. How about they both operate at profitable levels and offer decent value and safe service. Both Beddoe and Milton understand this.
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Old Mar 15, 05, 11:18 am
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Very well put Northwich. ^
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Old Mar 15, 05, 11:23 am
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That's true.

But you have to look at it this way also -- neither will fly at a loss to out do each other.
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Old Mar 15, 05, 1:40 pm
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Originally Posted by Nothwich
Good short term thinking. What happens when they fight it out and the loser follows Jetsgo? Then the remaining carrier props up fares to a profitable level or higher. You have no choice which airline to fly. Let's let history repeat itself over and over again, with a bloodbath in the airline industry every few years, where some consumers get deals for a while, and others lose big when an airline collapses. How about they both operate at profitable levels and offer decent value and safe service. Both Beddoe and Milton understand this.
Agreed. AC right now is in the dominant position. If AC were smart, they would let both airlines get back to a healthy position before starting to duke it out. When WS moved to YYZ from YHM, that was meant as a move to compete directly with a bankrupt AC. AC survived this, and all of the competition to boot. Now with AC healthy again and WS losing money for the first time, both airlines need to be careful, but especially WS.



For me, the higher prices means flying to BUF for awhile which is fine as I have some credits on UA to use up.
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Old Mar 15, 05, 2:06 pm
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AC has clearly stated their focus is on profitable international routes while continuing to be competitive on domestic routes to feed into the internationals. Westjet and AC are now direct competitors on almost every significant domestic route. A protracted fare war between the two would result in losses for both and AC is in no position to justify loss-leader routes to their Board of Directors after just coming out of bankruptcy protection. As CEO of a publicly traded company, Westjet's Beddoe also won't get much support from his board for a money losing strategy that has no hope of success either. Westjet is altering their market strategy from a pure LCC to a bit more catering to the business market and definitely expansion on the transborder routes. Since domestic market expansion has little left to offer in terms of new routes, Westjet domestic growth would primarily be possible through market share increases on the current domestic routes. A strategy with limited potential for return without some incentives or fare war (non-starter).

Then there is Canjet on the Eastern horizon, taking a slow and deliberate expansion path. Not sure what their exec's are thinking these days. Some opportunity with Jetsgo out of the picture, but Canjet is surely the weakest significant player in the domestic market and they almost certainly don't want a fare war between AC and Westjet.
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