Good for YEG they bagged another airline into the market. I wish FI well in their endevours to build the market.
This is a niche service market play that is also dependant upon capturing the low fare crowd. I am reminded of a comment by Larry Kellner, former CEO of Continental Airlines, "low cost airlines are also low fare airlines". FI will not be able to command a market premium over the AC service. Hopefully FI can sustain ultra low (eg. Transat charter) fares and still make a go of the market.
Key to the sucess of this new FI service is:
- FI and YEGAA ability to get the word out to local travel agents and general public regarding the FI service and connection possibilities.
- FI convincing the local market that a 30min-1:15 connection in KEF is viable and low stress proposition.
- FI does not get skunked by the likes of charter outfits. (why connect in KEF when you can go nonstop with us). Canada3000 and air Transat sunk the late 90s AC YEG-LHR flight using this technique of riding on AC marketting together with heavy travel agent promotion.
- AC does not send the YEG-LHR market to Rouge. This is more of a risk for the FI YVR-KEF service; they arew sunk in the market if AC Rouge starts YVR-Europe services.
Quote:
Originally Posted by tuffyy
Good to see a airline use the term "under served".
Now comes the question? What will AC do? Increase service? Lower fares? Or I have been even asked if they would drop service to LHR? I highly doubt it... But it'll be interesting to see what happens.
I think it'll look like this.
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AS you all ready know Tuffy, this is not the first time AC has seen FI enter their market. YHZ and YYZ all ready have FI service that competes with AC services to Europe.
I also believe AC will not alter their pricing or strategy as a result of FI entering the market.
Quote:
Originally Posted by tuffyy
I had mentioned months ago that it was Edmonton and Vancouver being looked at by FI. I would assume that with its quality of existing European service it was not worth a second thought or it slipped under the radar to those concerned. The route will be seasonal but if also expect it to possibly become year round. With the lower fares and and great quality of service FI offers I'd suspect it will also become a popular choice for Vancouverites heading to Europe. The airline has done very well for itself from nearby Seattle.
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FI is probably getting 20+ pax from Canada on their SEA-KEF service, so they are somewhat keen to try YVR-KEF. However I think the YVR market will be a very tough sell for FI. There is a lot more competition on the market and the competition has well entrenched name brand recognition.
Service wise the competition has international economy and front cabin product while FI service is North American product standards, e.g. FI Saga class is comparable to UA domestic First Class on the 757. FI will have a tough time attracting repeat cusotmers with NA product standards going up against international product standards.
The big problem for the YVR-KEF-Europe pax will be the horrible timing of the connection. With a 7.5 hr flight timefor the first leg; the first 1.5 hours will taken up by departure and meal; the last 1 hour will be taken up by continental breakfast and arrival into KEF, this leave 5 hours for sleep time of which only about 3 hours will be productive sleep. The pax lands and then has a very quick under 1 hour connection to get through both icelandic customs and airport security before boarding their 3-5 hour flight to destination city (no hope of getting sleep on the second flight). With a full day activities in YVR; the pax will arrive onto their destination requiring a full 8 hour sleep/rest period before doing anything productive.
Quote:
Originally Posted by oiler-dude
Looking at a YEG - LHR flight in mid July (random dates picked).
Through Icelandair:
$1,098 round-trip (10:15 travel time)
Through AirCanada
$1,797 round-trip (12:15 travel time)
I was fair and didn't pick a direct flight from YEG...since it's even more expensive. These are for the same days of the month. Ridiculous.
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Oiler-Dude, your analysis does not take into account airline booking curve marketing methodology. Actually no analysis of FI prices will be complete from the YEG market because FI service won't start until well before the booking velocity starts to affect the competition prices. For a direct comparison with booking velocity in effect; try looking at YYZ-Europe vs FI YYZ-KEF-Europe for late October or November.
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