Wednesday, October 21, 2009

Shrewd thinking on WestJet's part

This is an example of the good thinking coming out of WestJet HQ. The aircraft that WestJet uses (Boeing 737-700s) can make the Calgary/Edmonton-Hawaii segment non-stop, but not at the full capacity of 136 passengers. So instead of being hammered by competitors that their aircraft are too small and don't have enough range, WestJet turns around an opens up the middle seat in several rows, creating:

1) a business class type environment (more space) for customers without the business class prices;
2) a weight savings that will make it easier for them to operate the flight, make money, and dismiss any concerns about the range of the aircraft;
3) front page coverage in the

Nice move, WestJet.

Tuesday, October 20, 2009

More Moose Air

So as mentioned, I think this is a very good deal for both parties. Good on Calm Air for going out and making this happen because it gets their name out in front of more potential customers, both for their commercial and charter business.

But let us take a few steps back. The airline industry is an industry littered with casualities. Casualities? Isn't airline travel glamorous, with all those wonderful destinations and high paying jobs?

In a word, no.

The airline business (both here in Canada and elsewhere) is notoriously difficult to make money at, and is even worse when it comes to job security. From the price of oil (affecting fuel prices) to the threat of terrorism to global health crises (SARS in 2003), the industry is highly susceptible to forces beyond its control, which in turn can have drastic impacts on the number of passengers buying tickets. But go and throw in the occasional price war (where seats are sold at a loss) and while the plane might be full, the airline is losing a ton of money operating that flight.

(See Canadian Airlines International, Wardair, JetsGo, Canada 3000, Roots Air, and a few other examples of failed airlines in Canada alone.)

Amidst all the doom and gloom, Calm Air is a success story. Established in 1962 and based in Thompson, the airline is owned by the Exchange Industrial Corporation (EIC). The airline operates passenger and freight services in northern Manitoba and Nunavut while also doing charter work (like polar bear tours to Churchill and fly-in fishing lodges in northern Manitoba). In fact, many of their 17 aircraft are configured to transport both freight and passengers. But wait, it gets better. They have never gone bankrupt, they are never mentioned in the newspaper as being on the verge of bankruptcy, and their generosity to northern Manitobans over the years has been legendary.

(Case in point... several years back a young Thompson resident who was an up and coming musician had to take lessons in Winnipeg because Thompson lacked the instructors that he needed. The family could not afford to fly their child back and forth virtually every weekend, so Calm Air transported the child free of charge over the course of a long period of time so he could get his training. The company has also been a generous sponsor of many, many events in Thompson and other points in the north.)

This partnership is smart for both parties for several reasons. Calm Air aircraft will be seen all over the continent, increasing brand awareness of the airline. As well, providing aircraft services for a professional hockey team that is seen by many as the envy of the AHL is a smart move. The Moose meanwhile, are supporting a strong local company with deep roots in this province while at the same time making their travels a whole lot easier and increasing their cachet as a hockey team that operates like a NHL franchise.

All in all, this has the appearance of a solid relationship.

Manitoba Moose take flight

Great story in the Winnipeg Free Press recently about the American Hockey League's Manitoba Moose using local Manitoba airline Calm Air for their charter flights to the US this season.

As someone who has flown with Calm Air for years, I can attest to their great service. They are a local success story and its great to see the Moose using a local company for their charter needs.

More to come...

Tuesday, October 6, 2009

Leaving on a jet plane...from Grand Forks?

"North Dakota hits 10-year high passenger count in August"

USA Today - Oct. 5/09

"The number of passengers boarding flights this August at North Dakota's eight commercial airports hit a 10-year high for that month, according to The Associated Press. And the state owes a big thanks to leisure carrier Allegiant Air for helping it hit that high-water mark, according to the Minot (N.D.) Daily News. Larry Taborsky, director of the North Dakota Aeronautics Commission, tells the paper that Allegiant's new service and discount fares to Las Vegas and Phoenix-Mesa are helping to drive the state's passenger increase.

At Grand Forks International, for example, airport director Patrick Dame credits Allegiant Air's presence for helping send passenger traffic up 22%. "The airline's flight to Las Vegas has boosted passenger numbers from Canada, Minnesota and north central North Dakota, he said. Allegiant's plan to add a flight to Phoenix in November is expected to attract even more passengers," the paper writes.

Airport officials at Fargo's Hector International say Allegiant has helped stimulate traffic there, as well. And in the state capital, officials at Bismarck City Airport say increased service by United and Delta has helped keep passenger totals on the rise during August. Allegiant also flies to Bismarck, where airport officials say the carrier filled more than 90% of its seats in August despite that being a "slow" month for the airline.

This morning (Oct. 6) , USA Today had more on the topic but from the Winnipeg perspective:

The latest state to poach Canadian fliers: North Dakota

Add North Dakota to the list of U.S. border states where airports are poaching fliers from more expensive airports in Canada. The Winnipeg Free Press writes "Winnipeg's Richardson International Airport is getting some unlikely competition from its puny siblings in North Dakota, in a battle that's giving Manitobans -- and other Canadians living in cities all along the border -- cut-rate fares to sunshine destinations and elsewhere."

The Free Press adds the "Winnipeg Airports Authority says it's starting to feel the effect of the growing trickle of Manitobans heading to Grand Forks and Fargo to take advantage of low-cost airfares to places like Las Vegas and Orlando for half the cost of the same flight from Winnipeg." The arrival of discount carrier Allegiant Air to Grand Forks and other North Dakota airports has been cited as a particularly big draw for Canadian fliers.

The price differences can be dramatic. An Oct. 5 search for a Feb. 4-7 itinerary from Grand Rapids to Las Vegas found fares of about US$239 from Grand Rapids. From Winnipeg, the cost jumped to about US$686. That, as your might expect, has caught the attention of airport officials at Winnipeg.

"Grand Forks is on our radar screen for all the wrong reasons," Barry Rempel, CEO of Winnipeg Airports Authority, tells the Free Press. "Where possible, we should be coordinating in the region and doing things jointly. The unfortunate part is that it is extremely difficult when carriers that probably should be directly accessing a marketplace like Winnipeg, choose a market like Grand Forks."

Rempel, who also happens to be the chairman of the Canadian Airports Council (CAC), points the finger at the Canadian system of managing airports. In Canada, much more of the cost of building and maintaining airports is borne by independent airport authorities, and the costs are almost always passed directly on to the consumer in the form of taxes and fees.

In one example, the Free Press notes most Canadian airports must pay rent to the federal government. Despite that, airports still are responsible for operating costs and most capital costs. The Free Press writes Rempel "said (the CAC) has been hammering the federal government for some time for changes to the airport-management structure." He tells the paper "it is just not a level playing field" between U.S. and Canadian airports.

Interesting, interesting...Grand Forks (metropolitan pop. ~100,000) upstaging Winnipeg (pop. ~650,0000) in the battle to get airline passengers. Allegiant running ads in the Winnipeg Free Press advertising their seats sales out of Grand Forks to Las Vegas and soon Phoenix. WestJet and Air Canada must be seriously annoyed...watching all those Canadian travelers making a run to the border at Emerson, followed by a stop at Target, and then on to the airport for their flights to warmer destinations.

I'm thinking that there just might be some really good deals available out of Winnipeg in the very near future.