The two dominant national carriers are focusing less and less on offering service nationwide and more on their regional strengths as they try to improve their financial performance and also fend off growing competition.
Those pressures are why experts say WestJet is focusing heavily on Alberta, while Air Canada is prioritizing markets in the east, such as Toronto, Montreal and Ottawa.
Those strategies are resulting in many service cuts in different parts of the country.
It really is the carriers trying to solidify their fiefdom.-John Gradek, McGill University
WestJet has cut service in Atlantic Canada, Ontario and Quebec, including a cut of about 80 percent on flights between Toronto and Montreal compared to pre-pandemic levels, according to aviation analytics firm Cirium.
By contrast, Air Canada no longer flies from several smaller airports in western Canada, as well as cutting service to larger cities in the prairies. Outside of Calgary, the airline does not offer direct flights to Nanaimo, Cranbrook, Kamloops, Castlegar and Victoria in British Columbia, Regina and Saskatoon in Saskatchewan, or Lethbridge and Medicine Hat in Alberta. Air Canada flew those routes in 2019.
“It’s really the carriers trying to solidify their fiefdom,” said John Gradek, a professor in the aviation management program at McGill University.
“Basically, they are trying to create barriers to entry for other operators, which is normal in a competitive environment.”
Aviation was one of the hardest hit sectors when the pandemic began. As travel slowly returns to normal volumes, the launch of new airlines, such as Lynx and Canada Jetlines, and the growth of smaller airlines, including Flair and Porter, are also affecting the air travel industry.
Smaller airlines often focus on the most profitable routes in the country, which can affect the results of WestJet and Air Canada.
“There are some moves underway by established carriers to say, ‘Okay, we’ll create our own little fortresses and run those fortresses and try to build our fortresses around those fortresses,'” Gradek said.
In 2022, WestJet announced a new strategy, which included a restructuring of its regional fleet to focus on Western Canada and withdrawing from some routes in other parts of the country. The company is privately owned, so its financial performance is not publicly reported.
In October, Air Canada posted its first operating profit since 2019 as the airline slowly recovers from the pandemic.
“We continue to rebuild our business in a prudent manner, which involved looking at all aspects of our network and deploying our resources efficiently and where they will be most productive,” the airline said in an emailed statement.
Air Canada continues to fly from all provinces and provides access to major hubs in Vancouver, Toronto and Montreal, the airline said.
The regional movements of the two dominant airlines are not ideal for passengers in many parts of the country. They face fewer options and longer travel times as they often have more connecting flights, experts say. The reduced level of competition at some airports is likely to result in higher ticket prices.
“For the big airlines, there’s more money in international flights than in these little local flights,” said Barry Prentice, a University of Manitoba professor specializing in transportation.
“They ran up huge amounts of debt, just like the airports. So the entire aviation industry has a huge amount of debt that it has and it has to pay it off,” he said. “One of those ways is to make sure that you’re only running profitably [routes].”
Routes had to be cut across the country during the pandemic as airlines had to manage expenses, Prentice said. As air travel activity has picked up over the past 12 months, those same airlines have had to overcome labor challenges and problems at airports to process the increased number of planes and passengers.
Moves by WestJet and Air Canada to focus on different parts of the country are raising concerns about possible collusion.
The Saskatoon Chamber of Commerce wants a federal regulator to review recent moves by the country’s two largest airlines, after Air Canada decided to cut non-stop flights to Calgary.
“Air Canada has failed to adequately explain its ‘business decision’ to ignore strong and growing demand and eliminate a route that has been consistently profitable for more than 30 years,” the chamber’s chief executive Jason Aebig said in a statement.
“Route changes through 2022 suggest that Air Canada and WestJet took steps to smooth out competition in the oligopolistic Canadian airline industry. Air Canada removed competition from WestJet’s traditional local regional routes, and WestJet did the same on routes traditional local regional Air Canada routes:
Air Canada has previously said that it complies with all regulatory obligations and strongly rejects any allegations of anti-competitive conduct.
Any of the airlines’ decisions to cut routes or reduce service could be temporary, experts say, when some of the competitive and financial pressures could ease.
#WestJet #West #Air #Canada #East #Canadas #airlines #regional #CBC #News