‘Unsustainable’: Air Canada & WestJet On Canada’s ‘Inevitable’ Airline Consolidation
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- Опубликовано: 4 ноя 2022
- For years, Canada has been heavily dominated by two carriers, now obviously Air Canada and WestJet, together with many much smaller operators. But there are now also low and ultra low cost carriers: Lynx Air, Flair, Canada Jetlines, and WestJet subsidiary Swoop. They're shaking things up and - most significantly - have many aircraft on order.
Inevitably, the two incumbents - with clear vested interests - are highly skeptical and wary of the inevitable market shakeup. Let’s look at this discussion in today’s video…
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As a Canadian I was skeptical of the surge in new airlines launching all at once. Consolidation happened in the 80s when CP AIr, Wardair and PWA merged into Canadian airlines. Airlines have collapsed like Canada 3000, Royal and Jetsgo. I believe it’ll happen again with Flair and Lynx merging, Jetlines maybe with Air Transat or AC Rouge. Big growth ambitions is great but must be done prudently and judiciously
That’s not gonna happen
@@Patrickair4444 Yup, AC doesn't do mergers well. They are more like the Borg, "Resistance is futile, you will be assimilated".
@@FirstLastOne especially being a government welfare recipient as well
I could easily see two of the new ULCC’s consolidating. Flair and Lynx strike me as a likely combination.
Yes much better than being absorbed by Air Canada or Western Jet.
It is great to see competition in Canada, we definitely needed more airlines to drive the prices down domestically. Another new airline called Connect Airways just started operating out of Billy Bishop Airport and now Porter is expanding its routes out of Pearson. A lot of people are saying these new airlines won’t last long but I have a strong feeling they will. This year alone from Jan - Oct, people flying domestic was just over 37 million. The demand is definitely there and this winter season will be a busy one. Working for some of these airlines, the growth is there and I can see rapid expansion.
Porter(PD) expansion using Ember E190's (38 with options up to 200) was not mentioned. They also have Domestic Long Haul (Western Canada) and Trans Boarder plans. Bases YYZ, YHZ, YOW and YUL. New Maintance Hanger Contract for YOW is announced.
They obviously didn't do their research. They also failed to mention Sunwing and them in the process of being bought out by WestJet
@@CaptureKing247 that's deal won't go through. You didn't do your research before commenting
@@davids4767 What research did you do? Just saw a headline and assumed? Feel free to delete your account when the deal gets officially approved. I'll come back to remind you 😁
@@CaptureKing247 They can only mention so many things in a 4 minute video.
@@mirzaahmed6589 The title of the video literally says 'Airline Consolidation'. How could they not mention the pending consolidation of 2 Canadian airlines? 🙄
I'm Canadian and I want all the competition we can get because, right now, we don't have competition at all. Unless you live in a major city, choices are far and few between. Prices and connection times are horrific. Air Canada just changed one of my itineraries and now has me spending a night in Toronto, both coming and going. I would really like to see US carriers being allowed to enter the domestic market in Canada.
Unless Canadian aviations workers are able to work in the US that would be devasting to any family that relies on the industry for an income.
The problem is that it's not profitable to serve the smaller markets. All the airlines are for-profit businesses with very high operating costs and will run the routes that make them the most money.
The government would have to step in and subsidise the routes which they do for flights to the territories.
Don't forget Porter is essentially tripling in size with 50~ Embraers coming. New Ottawa hub, millions invested into that. I can't see how this is all sustainable.
I think there needs to be another full service airline with business class especially with Westjet turning away from that
There is not enough demand in Canada to compete with Air Canada in the business class market because of the lack of business travelers.
Porter? They seem to cater to a business traveler clientele, with airports near city centers, lounges, etc.
I wouldn't be surprised to see WestJet try to purchase Lynx Air, both based in Calgary, however I can't see the Competition Bureau letting it go through. A couple of the smaller carriers will have to merge in order to survive unless they all start to offer flights to southern destinations like Mexico, Cuba or even Hawaii. this winter.
WestJet is not going to buy Lynx when they already own Swoop... Also, both Swoop and Flair are offering Mexico and US flights this winter, same as they have in the past.
I can't say I'm terribly surprised to hear both AC and WJ predict consolidation as an inevitable outcome. I heard nothing about market share: that Canadians now have multiple choices rather than this long-standing duopoly might also result in both AC and WJ losing market share. Further, ULCC pricing may generate new flyers due to more favorable pricing. In any case, Canada needs more viable, long-term domestic competition. Good luck to the new ULCC's.
Hi Simple Flying, love your videos!
Unfortunately everyone major Canadian corporation says the same thing about consolidation. They have been gouging the Canadian consumers for decades and the Government barely does anything to help the consumers because all these companies lobby the governments for large profit margins..
If you think there are large profit margins is airlines you certainly need to do some homework. Gouging? The problem is us cheap Canadians think having to spend 500-700 to fly return across the second largest country is too expensive. This attitude of thinking a $79 airfare is their RIGHT is ridiculous. People will complain that they had to spend 300 to fly 2500+ kilometres but yet get off the plane and pay a cab driver $50 to go 20 km AND STILL TIP THE GUY! Canadians need to get heads out of their “you know what” and quit feeling entitled to a 80 buck airfare.
Plus porter has e2-195's on order. Something like 30 aircraft? They're building a hanger in Ottawa.
There just aren't enough of us Canadians for all these airlines, eh. ;)
The domestic air travel industry is heavily regulated, to the point where any operator providing domestic service within Canada must be majority owned in Canada. This severely limits competition. For example...a European carrier will do a flight from BER to YVR with a stop in YYZ. That European carrier is not allowed to provide service between YYZ and YVR for Canadians, even though they would have the capacity. Not only would this provide more competition within Canada, it would allow for aircraft to be run more efficiently by having more seats full.
It would also allow for companies to Pay lower wages and offset local competition by killing Canadian jobs. I am fully in support of Canada and the US not having allowed foreign airlines to provide domestic services.
As with everything, it's a balance. Supply & demand....and right now Canada has the supply it needs.
Most major countries are this way.
Most countries are parties to those regulations, it called the Chicago Convention.
@@larryb3583 I understand why it was done, but it does protect the carriers within each country and shields them from competition within domestic markets. For smaller countries that's not much of an issue. For larger countries like Canada and the US it would make a big difference.
always take air canada or westjet. if the flight is cancelled atleast their another flight same day or next. not 3 days later
AC and WJ seem to ignore that more than a third of Canadians do not travel on airplanes at all. These ULCC airlines seek to stimulate this untapped market. Based on the types of passengers I see flying on these airlines, they are achieving this. This outdated thought process that Canada only has room for 2 airlines, is based on a country of 25 million not a country that it headed to 60 million in the next 25 to 30 years. When AC and WJ talk about consolidation, they mean only one thing. The currently Duopoly they currently enjoy, and the very thing these new airlines are seeking to eliminate. I believe at worst 2 of these new ULCCs will survive, and that will be good for all Canadians.
Horrible for wages :( Canadian low cost carriers pay Flight Attendants some of the worst wages I have ever seen in the Developed world. Paying FAs $1700 CAD a month at Flair& Lynx is unacceptable, therefore I would NEVER fly with them.
AC starts at $2,320 CAD
TS starts at $2,310 CAD
WS starts at $2,080 CAD
I miss what WestJet used to be. The only thing worse than its current iteration is Air Canada. (Not to say I've had great experiences with Flair but at a third the price, I'm more willing to let it slide.)
the obvious is that growth will only come with reach to the midsized markets of the U.S. Growth doesn't happen because of the effect it would have on major U.S. markets. Point, Boston is where everyone flies to, but both Providence and Hartford are sustainable. Air Canada restarted BDL this year and hopefully PVD next year, but only to the point of how it would affect their BOS numbers. Both BDL and PVD could handle multiple rj's daily independently of BOS service. Other markets like Norfolk, Portland, Me., Richmond, Louisville, Omaha, etc could also sustain Canadian service. And of course, other mid sized U.S. markets.
Air Canada or Westjet could walk away with all the pilots if they wanted. Just have to offer better starting wages and they would kill the incumbents for CHEAP. No pilots no flight.
There is high demand for LCCs and ULCCs and full service carriers can't stop this, the US and Europe have loads of LCCs and ULCCs as well as Australia and Asia and now Latin America. There is demand for full service carriers but also for LCCs and ULCCs. Long-Haul long cost airlines often fail (think Norwegian and others) but it can work if these airlines don't try to compete with full service carriers so airlines like Condor are succeeding and Air Asia but if a ULCC tries to get into the London to New York Market, chances they will fail but if a ULCC began Bristol to New York then they could succeed, ULCCs create demand and that's how they have succeeded. In Europe many full service carriers fail to provide services in the Balkans but ULCCs strive (think Wizzair and Ryanair as well as Jet2 and Easyjet).
I hope they are successful but if you look at other businesses that have tried to make it in Canada, it's a hard market. Lowes for example is selling its Canadian business. Target was a flop. Cheaper mobile carries come and go.
Canada is not a market that can support this many available aircraft/seats, especially 3 ULCC (2 independant and 1 legacy spinoff). There will be a consolidation.
Norwegian is basically back flying long haul ULCC. It's now just named Norse Atlantic and operating as a separate company from the short haul Norwegian.
Just as a different sister company of the original Norwegian.
Norwegian is now just a smaller ULCC doing short and medium haul.
Just like Wizzair, Ryanair and easyJet do.
While the newly created Norse Atlantic is doing the Long haul routes with the 787.
It's basically Norwegian Long Haul 2.0
Same airplanes (they took the parked former Norwegian 787's), same people that created Norwegian, etc.
So they will succeed this time. They know what they did wrong the last time so the won't do the same mistakes again.
Love the competition, but these new carriers never have enough aircraft or funding to be sustainable when they set sail.
Trust me. Too much competition in aviation isn’t necessarily a good thing
@@ARyanCoke Doesn't seem to be a problem in the US and Mexico where prices are dirt cheap, currently most people can't travel within Canada because prices are far too high, actually cheaper to fly to Europe than Vancouver, from Toronto.
@@richardbanks6025 will I just got nailed a 550 fuel surcharge for a ticket to Germany so I don't know about that
@@richardbanks6025
The US and Mexico have at least 4x the population and less distance to cover than Canada.
My comment is not related to the topic, but i really like the change in microphone o recording for the voice of the narrator. Big difference and i can follow better the topic with the more "serious" and neutral tone. 👍
I am good if Air Canada goes down like PanAm did…
Let free competition lead the way.
We need just fairs across Canada.
The new entrants to the Canadian market are already in trouble. They came in with a big splash of cheap rates, but then followed it up with routes only being available twice per week in many cases and then those flights constantly getting cancelled and their customers being out of a flight altogether. People I know don't have the faith in the new airlines to actually come through to bother to use them.
Flair and Lynx both operate 737s, makes sense if they merge. Jetlines uses 320s, they have a close partner in the US, GlobalX, who owns 25% of Jetlines. Currently, Jetlines focus on medium haul routes and sun destinations: Florida, Vegas, Carribeans, Mexico. Is it possible for Jetlines to team up with Air Transat?
Jetliners will be done shortly. Same with flair. Lynx, hopefully soon. These ULCCs need to go away. Offering cheap airfares on the backs of your employees is a lousy business model.
They all operate 737 Maxes so fleet consolidation is a breeze
as someone who can easily travel with just a personal item, ULCC's are a godsend. 135$ roundtrip yvr-yul , in july, is unheard of with Wj or AC.
Your team should do a little more research. No mention of Porter. And nothing about Sunwing in the process of being bought out by WestJet
WestJet has gone downhill since their sale in 2017 so much so that I won’t fly them anymore. You can wait an hour or more for luggage, flights consistently cancelled, delayed or drastically changed severely alter travel plans and in flight service a noticeable drop. Hopefully Air Canada swallows them up.
We are seeing the not mentioned Porter Air flying with more flights, Ontario and East, with Westjet chopping all eastern routes. Westjet appear to be returning to the Southwest Model, dropping all but the 737s. (they have 787, but they were purchased pre reorganization and all future orders have been cancelled) These new Airlines are most likely to fail. Canada is a country with 90% of its population within 1 hour of the US border. That makes most domestic flights East/West. The number of flights described, Calgary to Toronto, and just silly from a business point of view. I keep hearing about the $199 flight across the country; that is not sustainable. Air Canada has ordered A220's for the small routes, making it more nimble and has much deeper pockets. Canadians have all heard or felt the issues of Airlines going broke and leaving them scrambling without a return flight. The math just doesnt work, yet we keep seeing this repeated again and again...
I highly doubt AC gets to consolidate this time.
Their membership of star alliance and the attempt to buy air transat last year
Remember the darling of our skies Air Canada did try and buy Air transat but government stopped it.
The federal government should STOP using Canadian airports as cash cows.
Love Porter Airlines.
Cheers 🇨🇦
Well funded but overly ambitious.
Air Canada has always been one of my favourite airlines, however, the customer service as well as on Ford service has always been subpar. I love their fleet, but I think more competition in Canada is important for a healthy marketplace.
Then your standards must be legendarily, astonishingly low, because the only airline on earth worse than AC is American.
Actually, more important than competition is treating your employees as if they were humans and not tools than can be discarded for a newer one that's cheaper (often with little to no people skills) which then affects customer service. Vicious circles which then make passengers get angered by little things. And so on and so on. This is my first hand experience having traveled with AC and Westjet in all their 'seat classes'.
Like with Australia, there will be consolidation of of airlines in Canada over the next couple of years
WJ and AC may merge eventually, but Air Transat-Air Canada deal may start up again, and Westjet-Sunwing may go ahead
Vraiment bizarre aucune mention pour la compagnie Porter Airlines. Pourtant pour moi c'est la meilleur compagnie aérienne au canada et elle est en expension continue avec l'achat de 50 Embraer 195-E2.
As a Canadian, this irks me hearing this from the 2 big players about consolidation. In my eyes, they don’t want the other ULCCs to succeed because they already have their own half assed entry of their own, Rouge and Swoop. It’s hilarious that they have their own entrants into that segment, say that the other players can’t fit the market, and speculate shut down for companies who provide jobs to many people. I for one hope all the ULCCs stick around. And I hope AC and WJ both bring down their prices and provide a more competitive premium product. More choice for all Canadians and a win win. Not everyone can afford or even demands a premium on regular runs such as YYZ to YC or VR. At the same time, I appreciate that ULCCs aren’t everyone’s cup of tea. Give Canadians a broader choice.
I've never flown on Swoop, but have had the misfortune of flying on Rouge quite a few times. AC will charge full price and then just swap one of their planes for a Rouge plane, yet not offer a partial refund. Rouge is terrible.
“Who provide jobs to many people”. Typically you have to be paid for it to be considered a job. These ULCCs pay far less than what they should be.making money from your employees backs is an insult and I hope companies like these ULCCs go belly up…..fast
keep your voice like that its sounds way better than before in my opinion
This will last a year. And then it will be AC vs WJ again. The airlines who’s names we already can’t remember will be absorbed.
W SIMPLE FLYING VIDEO
Good
If I was Westjet I would rent out the older jets to the smaller companies
And then we'll end up like we did before. Air Canada dissolving all the other airlines and raising prices... yup, makes all the sense in the world.
Open skies in Canada, we are done with the duopolies and ridiculous ticket prices compared to US and EU.
You need more education on ticket prices. They aren’t cheap as you think in the EU.
@@ARyanCoke not only are ticket prices cheaper (thakns ryanair) but the pax rights are far better in US and EU
@@ghostrider-be9ek if you choose to fly on Ryanair I'm sorry for you. The airline where you pay for everything including oxygen. Ryanair isn't an airline. It's a bloody joke. Yet another airline that lives off the back of its employees.
Canadians barely get 10-15 days holidays and they can't afford to waste it booking in one of these cheap airlines with no guarantee, it has been really horrible in the last year. I always try Air Canada, westjet second choice.
it feels dominant
Sunwing wasn’t mentioned
Neither was porter, TransAt, swoop or rouge
Sunwing is effectively part of WS now, since the latter's acquisition of the former earlier this year.
@@ccudmore Swoop was mentioned.
What makes flying so expensive in Canada? You pay 3-5 times less for the same distances at other countries for domestic.
Canada charges an aviation fuel tax, whereas many other countries do not tax aviation fuel. Plus, Trudeau's ever increasing carbon tax also applies to aviation fuel.
Next we need more cellphone carriers, I'm tired of paying an arm and a leg for my limited and expensive plans.
the subsidieries like Koodo offer very good rates
I'm on Freedom for $20/m. Sure, I only get 100 minutes, unlimited texting, and 500MB, but it's perfect for my needs! I can always buy more data when I travel if needed, or pay something like $20 for 3-5 days in the States, etc.
The one to look at is Porter. It had established its niche as comfortable service on Dash-8 with 34" seat pitch, drinks, cookies, lounge at Toronto Island. But then as it grew, it started to become "airline". Sold airport whith new owner enlarging it and destroying the "small airport with friendly lounge" aspect, and recently reduced seat pitch on its planes to match Air Canada (which matched charter/low cost carriers).
Now, Porter has gotten delusions of grandeur and wants to become a "real" airline with new jets and basing itself out of the delay-ridden Pearson airport. It will not work well and they'll go down trying to grow too much and becoming totally undifferentiated with AC/WS.
f the Sywing and Westjet merger is blocked, it means Sunwings and Transat remain standing as vacination carriers in their niche. So this leaves the Flair/Swood and others in the attemkpt at competing in the jet market between large centres. As soon as they start to eat into Westjet and Air Canada's pie, the 2 will repond and prevent their success.
Heck. Air Canada prevented Westjet from getting gates in Montréal for years to prevent any competition. And Westjet has already announced they have given up on easterm Canada and retrenching to Western Canada.
Buffalo Airways FOREVER THE BEST! 🐼 P.S.: Mikey, hello 👋
Air Canada and the air transat deal really government should ban consolidation air Canada has rouge and soon transat west jet has swoop and sun wing … so we don’t End up getting gouged like we are with the telecoms maybe flair and lynx can team up competition is good . Canada jet lines will survive standing alone and wants to be a main player and not low cost .
Flair and Lynx both use Boeing 737s, makes sense if they merge. Jetlines uses A320s, they do have a close partner in the US, GlobalX who owns 25% of Jetlines. Jetlines currently focus on medium haul routes and sun destinations in the south: Florida, Vegas, Caribeans... Is it possible for Jetlines to merge with Air Transat?
You’re dreaming
Music is too dramatic for this video
But every commenter on RUclips said they’ll never fly on a Max again! 🤣
Half of them probably have already…because most didn’t even know that the Max is a 737. When people at work made comments about not ever flying on a Max I would ask “how about a 737?”. The reply was always something along the lines of “Of course, they’ve been around forever and are safe”.
You make it sound people have a choice.
Most of the people who were saying that they would never fly on a Max again were likely just Airbus fanboys. ;)
Not all 737s are max
The Maxes have to now be the safest, most scrutinized aircraft on this planet...
Porter
Flair is here to stay. In my opinion.
Lynx Air will likely end up merging with Flair. They got similar fleet so...
Sunwing will likely merge with Swoop which I think is already in place.
Jetlines probably into Air Transat.
Sunwing's fate is for WS to decide, since their purchase of the former still sees the two operating as separate carriers for now.
Dreaming
Opening for Ryanair, Wizzair or EasyJet?
Lefebvre is pronounced luhv-ray
Le fave
Our country has a population smaller than the US state of California but is the second largest nation globally by area. We have the space but not the size to support that many airlines. History will eventually repeat itself and most of not all the LCC and ULCC will fold and we will be left with Air Canada and Westjet
Good and amen!
Is the music really necessary?
The pilot shortage is huge. Everyone over looks that, and AC is the experienced pilots choice because of pay. Many Westjet pilots leave to go to AC. Public doesn’t know that. Low cost carriers have a wide variety of very experienced pilots (ex Cathay etc.) or no experience new pilots. Canada hopefully is still one of the safest regulated countries in the world, and hopefully that doesn’t change!
Back to the question, yes I think AC and Westjet will merge, and many of the new low costs will then die. History just keeps repeating in Canada! Safe flying everyone!
voice😎😎😎😎
Fly American
Please not again
Dont like air canada ever since they changed the livery to having black tail and mascara 🤦♂
Looks better and more modern in my opinion. Iceberg livery was good for the time being.
If travel in Canada was easier for people to afford, I for one would travel a lot more in Canada. Air Canada needs to be dissolved or the company needs a complete overhaul. 3000 for a YVR-YYZ return. I flew from YYZ to AKL return with New Zealand Airlines for 3100. There in lies the problem. We don’t encourage Canadians to travel and visit our own country because it’s so damn expensive.
You are cherry-picking the expensive flights only. I know for sure they have way cheaper flights than that
@@ARyanCoke hahahaha. Anything out of Vancouver flying east is expensive. I flew from Abbotsford to Toronto and back on Swoop and the ticket was 119.00. Air Canada can’t come close to prices like that.