Air Canada aims at second Australian port, launches low-cost division

Air Canada was in town this week to declare its interest in a second destination in Australia and to announce it’s launching a low-cost operation back home.

The airline’s president, Calin Rovinescu (pictured), told a Canadian Chamber of Commerce gathering in Sydney that Australia remains a market of great interest for the airline.

“We believe that there are opportunities for at least a second destination in Australia to be served direct from Canada…

“We believe that currently we are leaving traffic behind that could be carried direct to our Canadian hubs and we are looking at that.”

In more general terms, he spoke of the importance of international growth, describing it as “one of the cornerstones of our strategy”.

“We think we need to provide a decent independent product domestically, and we certainly have domestic competition which is giving us a good run for our money, but our differentiator has to be, and will be, international.”

Air Canada announced recently that it was adding new B777 aircraft to the fleet, for delivery ahead of the B787 program which is starting at the beginning of 2014.

“These aircraft will enable us to fly to new destinations and routes that are currently not feasible,” Rovinescu said.

“Until now and over the last several years we have been somewhat challenged in adding new routes and destinations because our capacity was fully employed.

“We didn’t have the capital to expand because of some of the challenges we were facing.

“Nonetheless by now we managed to add some new routes over the last couple of years by finding creative ways to use the same airplanes.”

Air Canada is also increasing the intensity of its focus on Asia, recently announcing a new Toronto-Seoul route, seven more weekly flights to China and the upgrade of the relatively new Calgary-Narita route to daily next summer.

“As a result we can offer 77 return flights with 43,000 airline seats across the Pacific each week this summer, Rovinescu said.

“We have C$2 billion of assets committed to Asia and I think there are not that many Canadian companies that have made that sort of commitment to that market, so we think that Asia and the Pacific generally is a big, big opportunity for us…”

But it’s the airline’s most recent initiative that’s getting a lot of attention in Canada, the decision to launch a new leisure carrier.

“Like other airlines, including Qantas here, we’ve concluded that we have to participate in the lower- cost segment of the market,” Rovinescu said.

“While we are still finalizing our plans, I can tell you that this new leisure division will start summer with four aircraft, two 767-300ER and two Airbus 319 aircraft.

“It will serve leisure destinations in Europe and the Caribbean; routes that are either under-served or where our main airline cost structure will not allow us to compete adequately.

“Down the road the leisure carrier will increase its fleet as we take delivery of our 787 Dreamliners.

“As this occurs, and providing there’s demand, the leisure carrier will eventually operate up to 50 aircraft, 20 767s and 30 319s.

“So with some scale it has the potential to become a substantial player in the leisure market and give us the necessary  tool in our toolkit to respond to low-cost competition and protect some of the market that we’ve had developed over the years.”

 

 

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