Calgary International Airport II

[Cage]

YYC is an AC hub, however its not a hub that AC chose to focus as part of the Investor Day presentation.

That said, YYZ is the only true global hub for AC. YVR and YUL as international focus cities and YYC is a domestic focus city. The problem is that media and outsiders (re politicians especially) only understand the hub concept. Focus city is just inside baseball material.

[PPAR]

Originally Posted by Cage

Door is opened by AC for WS widebody to come into YYC and YEG, however attempt to come into YYZ, YUL or YVR and there will be competitive response via AC and ACr.
.

The presentation makes interesting reading for WS and other domestic competitors of AC. It appears, from both fleet size plans and route composition plans that the next three years will be status quo on the domestic network, and the US network, for AC.

[yyc_engineer]

Originally Posted by PPAR

The presentation makes interesting reading for WS and other domestic competitors of AC.

Seems they are aggressively going after Transat and Sunwing with AC Rouge. Really targeting that leisure traveler. At least that's what would be inferred from the prominence of logos on this slide.

Westjet and Porter not so much it. Man I would love to see a Porter CS100 at YYC!

[thenoflyzone]

Originally Posted by Spring2008

2018? lol so far away.

Don't we already have a direct connection to Paris via Air Transit? PEK would be a good addition but i thought this would be something they'd add by next year.

Yes, TS has two weekly summer seasonal only YYC-CDG. As for PEK, AC doesn't have access to decent slots at Beijing and cannot simply acquire them, so no, AC cannot launch anymore reasonable Canada-PEK flights. They will have to wait for the new airport, which is projected to open in October 2018.

Originally Posted by Cage

By 2018, this is what AC route map could look like. The 2018 route map also includes DXB and DEL as new routes where as they are all ready announced.

A few of these routes are pretty far fetched, like YYZ-BKK. Some have Rouge written all over them. Some are already served by foreign airlines, complicating AC's entry into the market.


YYC-PEK
YYC-CDG

YVR-BNE
YVR-MEL
YVR-AKL
YVR-SIN
YVR-CTS
YVR-NGO
YVR-TPE
YVR-FRA
YVR-CDG

YYZ-CAN
YYZ-TPE
YYZ-EZE
YYZ-Moscow
YYZ-BUD
YYZ-WAW
YYZ-DUS
YYZ-BKK
YYZ-BOM
YYZ-NAP
YYZ-JNB
YYZ-LOS
YYZ-ACC
YYZ-GEO
YYZ-POS

YUL-PVG
YUL-BEY
YUL-TLV
YUL-CMN
YUL-DKR
YUL-ALG
YUL-TUN

Too bad. No YWG-LHR, YEG-FRA, or YQB-CDG. A slap in the face of the secondary Canadian airports really ! A slap in the face of YYC also, since we know PEK cannot happen until late 2018, or 2019, leaving only CDG, a route already covered by TS and that quite frankly I don't see happening.

[thenoflyzone]

Originally Posted by yyc_engineer

So while we are a strong connector for our local region, we are do not fit their true definition of a "hub". Just my interpretation, I could be wrong. Interested to hear what others think.

Having exclusivity on a route is not the definition of a hub, as you so realized with your WS and YHZ/YYT comment. I don't think that is AC's view either.

Originally Posted by yyc_engineer

With the exception of the United States, and maybe now China, very few, if any, countries would be able to support an airline with 4 or more hubs. Even 3 is a stretch. It becomes very difficult geographically and economically to do so. And I would argue that were AC based out of Toronto, even YUL would not enjoy the true hub status that it does now.

You do realize that AC is, for all intents and purposes, based mostly out of Toronto right? Montreal is just a paper headquarters in order to meet the requirements set out in the Air Canada Public Participation Act. They are slowly but surely transferring operational jobs from YUL (and YWG) to YYZ, as they did with 140 operation center positions from YUL a few years ago. In fact I wouldn't be surprised if AC employs more office people at YYZ than at YUL.

http://www.huffingtonpost.ca/2012/01/19/montreal-urges-air-canada_n_1217359.html

http://winnipeg.ctvnews.ca/air-canada-to...-centre-over-a-number-of-years-1.1533305

So technically, what you say is true, Air Canada IS based out of Toronto, and yet YUL still enjoys hub status.

Do you really think that one sentence in the AC Public Participation Act is what is keeping AC from de-hubbing YUL? If that was their plan, it would be done by now. It clearly isn't. If anything, page 59 says it all. YUL is a specialized hub, and AC wants to focus on key francophone and global markets and minimize duplication with YYZ. None of this is forced upon AC. It is doing it because there is money to make in Montreal.

Originally Posted by Cage

By 2018, this is what AC route map could look like. The 2018 route map also includes DXB and DEL as new routes where as they are all ready announced.

Wouldn't qualify it as a 2018 route map. Far from it. Most of these routes will not happen, such as YYZ-BKK, YYZ-TPE, YVR-SIN, or YYZ-Moscow. It is a map of ''opportunities'', as titled by AC

BTW, interesting graph on page 53.

First time i see numbers for YYC-China. Looks like one way O&D numbers.

YVR-China 266,000
YYZ-China 224,000
YUL-China 65,631 (projected to be almost 100,000 by 2018)
YYC-China 30,774
YOW-China 20,866.

So YYC-PEK is not as sure a bet as people on here think it is ! At least not yet ! Much less YYC-HKG.

Originally Posted by thegx

That's what I originally thought. Which is why it's curious that Calgary is not mentioned on pages 58-60.

Because YYC doesn't present AC with any significant international expansion opportunity, which is what that section is all about. Hence why it focuses on the three hubs that do provide intl expansion opportunities.

YYC is a domestic hub for AC, little else. It shuffles people from the west coast to the east and back. That is mostly it.

[McMurph]

I'm not sure why anybody really cares. It's obvious that YYZ is AC's only true hub either operationally or aspirationally. It is to AC what Frankfurt is to Lufthansa, or Heathrow is to BA. Which of the rest of us is Munich, Dusseldorf or Hamburg is a pretty silly discussion.

I'll do everything I can to avoid YYZ. Even with it being the centre of AC's universe I've been able to do a pretty good job. I can't, however, ever expect them to fly me to Delhi non-stop from Calgary.

[Johnny Aussie]

Originally Posted by McMurph

I'm not sure why anybody really cares. It's obvious that YYZ is AC's only true hub either operationally or aspirationally. It is to AC what Frankfurt is to Lufthansa, or Heathrow is to BA. Which of the rest of us is Munich, Dusseldorf or Hamburg is a pretty silly discussion.

Although I will just add MUC to LH is still a very significant base and is a global hub for them.

But yes, YYZ is AC's only true global hub and decisions around AC's future will be guided by that. That's the way it is. Case closed.

[hoboman27]

Hey Johnny, now that Hainan's planning to do Tianjin out of YVR, does that mean the end of YYC-PEK on Hainan?

I heard YEG was in contact with Hainan too, but now it turns out YVR's been on Hainan's tail all along.

[Johnny Aussie]

Originally Posted by hoboman27

Hey Johnny, now that Hainan's planning to do Tianjin out of YVR, does that mean the end of YYC-PEK on Hainan?

I heard YEG was in contact with Hainan too, but now it turns out YVR's been on Hainan's tail all along.

I believe YYC-PEK will most likely be on AC anyway as part of the new AC/CA JV.

Every airport in the world is constantly in contact with and having discussions at various levels with many airlines all the time... that means nothing more than talks have been had. Without knowing the progress or the details of such discussions one can only assume they are just "discussions" until such time as something more concrete comes out of it.

The YVR-China market is just massive compared to Alberta. About 10x bigger than YYC and about 15x bigger than YEG. That's why you see so many YVR-China flights and more to come.

And the wealthier Chinese continue to prefer to settle in Vancouver and that just makes YVR that much more attractive as a place to fly...

No question this is happening.

http://www.news1130.com/2015/04/01/investor-immigrants-using-quebec-as-back-door-to-vancouver/

Quebec's investor program allowing wealthy Chinese to immigrate to Canada yet over 90% resettle in Vancouver as soon as they can. Another source estimates this to be about 91% of these uber rich investor immigrants ~ 150 per month settling in Vancouver. And because they are using a "back door" they are not even included in BC's immigration numbers.

[Cage]

Originally Posted by thenoflyzone

YYC-China 30,774

So YYC-PEK is not as sure a bet as people on here think it is ! At least not yet ! Much less YYC-HKG.

YYC - China numbers are a little bit miss leading.

For starters many of the WS codeshares with Cathay, China Eastern and China Southern; it is cheaper to do split ticket interline than full codeshare. Therefore YYC-China O&D does not show these pax as they are counted as YVR-China. A

Additionally there are pax through USA with the same issue. UA reports the pax as stopping in USA and not continuing onto China. Doing a USA stopover can save lots of dollars. A recent example from my European adventure. I priced out FRA-IAH-YYC with LH premium economy on FRA-IAH. If I declared a stopover in IAH (by pricing FRA-IAH and IAH-YYC separately), the price was $1200 cheaper because i could make country of origin USA instead of Canada.

The AC numbers listed above give a base of 85 pax/day. With the additional split ticket pax there is easily 30-40 pax more per day. This means YYC-PEK 3x/week is easily achievable target.

[Johnny Aussie]

Originally Posted by Cage

YYC - China numbers are a little bit miss leading.

For starters many of the WS codeshares with Cathay, China Eastern and China Southern; it is cheaper to do split ticket interline than full codeshare. Therefore YYC-China O&D does not show these pax as they are counted as YVR-China. A

Additionally there are pax through USA with the same issue. UA reports the pax as stopping in USA and not continuing onto China. Doing a USA stopover can save lots of dollars. A recent example from my European adventure. I priced out FRA-IAH-YYC with LH premium economy on FRA-IAH. If I declared a stopover in IAH (by pricing FRA-IAH and IAH-YYC separately), the price was $1200 cheaper because i could make country of origin USA instead of Canada.

The AC numbers listed above give a base of 85 pax/day. With the additional split ticket pax there is easily 30-40 pax more per day. This means YYC-PEK 3x/week is easily achievable target.

Yup. And without a source or even a description of what that graph is exactly (doesn't even have the axis labelled although I guess we assume what that is) what are those numbers... internally estimated AC numbers or are they Stats Canada numbers... Or? Sorry I'm a Chartered Accountant (or CA,CPA or not sure what I am now!?) and taught to be skeptical of numbers... have they taken into account the other pax you have mentioned which is obviously a valid point. The last time I saw YYC-China numbers discussed it was in the 80-100 PDEW range if I recall correctly.

We have to be careful though as PEK is not all of China. If the TTL YYC-China is that figure then YYC-PEK would be much less. In YVR's case YVR-PVG is larger than YVR-PEK but because of YVR and PEK being Star hubs (let's not debate the definition of hub now *sigh*) there are more seats on the YVR-PEK route and also PEK is better geographically located to cover more of China and onwards for connections anyway.

In any event, I still think we will see YYC-PEK announced to start either late this year or early next year.

On that same chart AC states it will be adding capacity on Canada-China for winter 2015/2016 anyway

[thenoflyzone]

Originally Posted by Johnny Aussie

I believe YYC-PEK will most likely be on AC anyway as part of the new AC/CA JV.

In any event, I still think we will see YYC-PEK announced to start either late this year or early next year.

Highly doubt that. They need proper slots first. And I don't see it happening within the next year. YYC's best bet is either AC starting PEK once the new Beijing airport opens in 2018-2019, or a Chinese carrier starting the route from PEK sometime in the short to medium term.

Originally Posted by Johnny Aussie

On that same chart AC states it will be adding capacity on Canada-China for winter 2015/2016 anyway

Most likely via upgauge of equipment. (i.e B788 to B789 from YVR)
Maybe they might open up CAN. They will certainly find it difficult to add frequency at PEK, that's for sure.

[Johnny Aussie]

Originally Posted by thenoflyzone

Highly doubt that. They need proper slots first. And I don't see it happening within the next year. YYC's best bet is either AC starting PEK once the new Beijing airport opens in 2018-2019, or a Chinese carrier starting the route from PEK sometime in the short to medium term.



Most likely via upgauge of equipment. (i.e B788 to B789 from YVR)
Maybe they might open up CAN. They will certainly find it difficult to add frequency at PEK, that's for sure.

OK. Fair call. I still think there may be a solution around this that we are all not privy too yet. I guess we will just have to wait to see what their plans are.

[cyeg66]

PEK slots the problem? Pfft! It's YYC that has no spare slots until their new wing opens in 2020. The new Brandenburg....


Edit: Oh wait, forgot something. <----there, clear enough?

[Cage]

Originally Posted by thenoflyzone

Highly doubt that. They need proper slots first. And I don't see it happening within the next year. YYC's best bet is either AC starting PEK once the new Beijing airport opens in 2018-2019, or a Chinese carrier starting the route from PEK sometime in the short to medium term.

AC will get proper slots from CA once the joint venture (JV) is approved.

The JV is very extensive. Each airline will share all revenues and standardized costs for Canada to China traffic as well as beyond revenue. Each airline partner participates in the joint venture profits on an equal 50/50 basis.

Revenue from each route, plus a portion of beyond revenue is included in the joint venture. So CA puts in all revenue on PEK-YUL, as does AC on YVR-PVG. It is important to note the JV allows CA to get around China's one route one airline policy as CA receives a share in the YVR-PVG route. Beyond revenue also gets included into the JV. CA pax doing PEK-YUL-BOS and CA gets to participate on YUL-BOS revenues for traffic flown by AC.

On the cost side, the routes are metal neutral. Therefore it does not matter whether its a CA 77W or AC 77W. The joint venture is charged with same standard costs based on type of airplane. Additionally through the JV, CA can lease the PEK slot pairs to AC. This will allow AC to operate YYC-PEK.

AC will also get the opportunity to participate in any beyond revenue in China or elsewhere in the CA network.

Finally, AC would be able to market PEK-YYC-USA services including routes operated by UA. Therefore into the AC-CA JV would be the ability to profit from pax going PEK-YYC-DEN, PEK-YYC-ORD, PEK-YYC-EWR, PEK-YYC-LAX, PEK-YYC-SFO. This is why the new international terminal requires an advanced international connections center that will allow for seamless international to trans border connections.

[thenoflyzone]

Originally Posted by Cage

AC will get proper slots from CA once the joint venture (JV) is approved.

I'm not so sure about this one. Everything else you said seems on point. But as far as I was told, slots at PEK cannot be openly traded such as at LHR. It could be that the JV opens that door, but I don't remember reading any literature saying such a thing. I guess we'll see come next summer season.

Originally Posted by thenoflyzone

Most likely via upgauge of equipment. (i.e B788 to B789 from YVR)

As I was saying....

http://airlineroute.net/2015/06/12/ac-asia-sep15/

[PPAR]

Originally Posted by thenoflyzone

YYC is a domestic hub for AC, little else. It shuffles people from the west coast to the east and back. That is mostly it.

If I am flying from the west coast to the east, I sure don't want to land at YYC!

In reality, YYC strives to be the traffic aggregation point for the 6.5 million people on the prairies, and YUL strives to be the traffic aggregator for 7.5 million québécois. Given similar market size, traffic numbers are similar, everything else just comes off as local pretence ( ie. "well our destinations are prettiest").

[Cage]

Originally Posted by thenoflyzone

I'm not so sure about this one. Everything else you said seems on point. But as far as I was told, slots at PEK cannot be openly traded such as at LHR. It could be that the JV opens that door, but I don't remember reading any literature saying such a thing. I guess we'll see come next summer season.

Correct to a point, slots at PEK cannot be openly traded as they are in LHR and were in HKG. This means UA cannot sell a slot pair to AC, nor can the slots be traded like baseball cards. However slots can be swapped with CAAC approval, as in CA gives a slot to CAAC who in turn gives the slot AC.

The scenario that CAAC is trying to avoid is Jeju Air (as an example) realizing their slots are worth more than flying the route, so the slots go to the highest bidder.

[McMurph]

Originally Posted by PPAR

If I am flying from the west coast to the east, I sure don't want to land at YYC!

If I'm flying anywhere to anywhere I don't want to land anywhere else. I don't care how important any city thinks their airport is, nobody wants to be there if they can avoid it. The height of hub-mania made flying in the US a pain in the ass.

[Cage]

Originally Posted by McMurph

If I'm flying anywhere to anywhere I don't want to land anywhere else. I don't care how important any city thinks their airport is, nobody wants to be there if they can avoid it. The height of hub-mania made flying in the US a pain in the ass.

Hub and spoke also made the US and Europe have significantly cheaper flights than Canada. If Canada aggregated all flying into YVR, YYC, YYZ, YUL; flights would be significantly cheaper than today. For example; YEG would get all mainline service YVR 4x/day, YYC 20x/day (mostly mainline), YYZ 12x/day. If an Edmontonian wanted to fly to Regina, They would have to take YEG-YYC-YQR route. While it seems absurd, YMM-YEG would also not be possible, rather one would have to go YMM-YYC-YEG; or drive. That said YMM would see hourly service to YYC with mainline during peak times.

In the USA, the big 3 legacy airlines are getting rid of their small regional jets by either combining flights or dropping routes that cannot support aircraft with less than 76 seats.

Back here in Canada, its very commendable to Westjet for making Encore a success. A very good portion of WestJet's early success and sustained high profits was the natural limitation provided by the 120-140 seat minimum for flying the 737. Routes that could not support a minimum 100 PDEW (per day each way) were cut or just not started.