Air Canada

Sunday reader: the week in Canadian aviation

An Air Canada 737MAX8 prepares for takeoff while a 777 lands at Vancouver International Airport.

It was difficult to compete this week with the biggest story in the aviation world – the superjumbo story, if you will – Airbus announcing the end of A380 production. No Canadian airline has ever bought the plane (even the venerable Boeing 747 has not been flown by a Canadian airline since 2003), but the A380 has served points Canada, notably Toronto, Montreal and Vancouver, and been seen on diversions elsewhere.

Air Canada flies the largest passenger plane in Canada, the Boeing 777, which led the revolution towards twin-engine long-distance flying and beat out competitors such as the A380 and A340. Smaller planes allow airlines to be more flexible with their schedules and destinations, and two engines generally burn less fuel.

This week, Air Canada credited that flexibility with allowing it to post profits of $167 million in 2018. The airline carried more than 50 million passengers for the first time, but profits were hurt by fuel prices which cost $1 billion more on the year. The airline has taken a nimble approach to the fleet, redeploying larger aircraft to routes where they’ll make more money, particularly in business class.

At the same time, the airline reaffirmed that it is concentrating its efforts on three Canadian hubs, Toronto, Montreal and Vancouver. At the core of its strategy: funnelling passengers from Canada and the United States, through the hubs, to large cities in Europe where they can connect to other cities. It’s moving capacity around, flying larger planes in Eastern Canada, and massively adding capacity on regional routes to Vancouver.

Oddly, though, both Air Canada and WestJet have never flown more passengers, and yet had so little to show for it. In all, the two airlines flew more than 75 million passengers, yet their profits fell a whopping two billion dollars from 2017. Increasing fuel costs is part of the reason, Air Canada alone spent an extra billion dollars on fuel in 2018.

Despite that extra cost, the airline remains bullish on the Canadian market in 2019.

Flair unveiled its new livery Wednesday in Edmonton.

Not to be outdone, Flair airlines revealed a new green and black livery for its Boeing 737 aircraft, stating proudly “it’s not easy being green.” Reaction to the new scheme would prove that right.

The design is not universally loved, to say the least. The colour has drawn its fair share of critics, with one likening it to the liquid used to de-ice aircraft.

Others have criticized the large black point on the fuselage. When asked about it, David Tait, the airline’s head, said simply “We liked it.”

Flair made the revelation in Edmonton, while across the country in Quebec City, airline, airport and tourism organizations were meeting for the Routes Americas conference. No earth-shattering announcements came out of the conference, but the continued momentum behind ultra low-cost carriers was evident, with presentations by Swoop and Canada Jetlines.

Indeed, with Air Canada and Westjet concentrating on growing on international routes, growth within Canada seems limited to the ULCCs in 2019 and beyond.
This week, Toronto’s Pearson International Airport is expected to release it’s final passenger numbers for 2018. It will be interesting to note two things: first, did the airport pass the 50 million passenger magic number for the first time, and second, did the number of international passengers surpass the number of domestic flyers.
Have a great week.

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