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Originally Posted by EdmTrekker
We will know soon enough...and I hope your right and that FI flights are strong as well.
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I think the Air Canada Heathrow service will continue to do well, but I am not optimistic that will help the route stay. Forgive me for expatiating a bit. From the Edmonton point of view the problem is that Air Canada operates a Hub-and-Spoke airline model. For this model to work very well all flights must go through the hub. This maximizes destinations and load factors, and maximizes yield on a system wide basis. Air Canada's hub is at Toronto, although they also have little hublets at Montreal, Calgary, and Vancouver. Non-hub routes like the Edmonton-Heathrow one work against their business plan and they are always looking for ways to reduce them.
Consider the nonsense we heard that the reason the winter Heathrow service was suspended was because it was not profitable. Air Canada loses tons of money every winter. All their routes lose money. Just this week it was announced that Air Canada's system wide transatlantic load factor for February was barely 65 per cent. If they suspend flights when they are unprofitable they would have to shut the whole airline down each winter. However, they can and do remove some capacity, and non-hub routes like Edmonton-Heathrow are the first to go. Notice that they lose very little revenue this way. Every passenger can be placed on a connecting flight through a hub; there is lots of spare capacity. Even if the Edmonton flight was totally booked all year round it would still make sense to them to axe it and route everyone through the hub. I fear next winter the same thing will happen, unless the airport coughs up some money in incentives.
Having said this, there is still hope. The logic of the hub model breaks done a bit in the presence of competition. I see two main rays of sunshine from the Icelandair entry. First, whereas the Air Canada Heathrow flight operates against their business model and they are always looking for a way to stop it, The Icelandair flight exactly fits the business model of that airline and they are motivated to have it succeed. Icelandair is a small airline and cannot possibly provide all Edmonton's European needs, but they may give Air Canada pause the next time they consider reducing service. Secondly, and in my opinion more importantly, the Icelandair launch seems to have gone very well. I wish we had better sources of information, but I suspect loads will be very good. Word gets around, and other European airlines may move Edmonton up their prospects list. Even if progress is slow on this, Air Canada may be motivated to solidify the Heathrow flight just to keep British Airways out!
There are many other issues to discuss, as I think Edmonton's air service prospects over the next 10 to 15 years are interesting. Sorry to waste bandwidth.