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Originally Posted by alexle
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The flights to Mesa were about their best attempt at establishing a presence in AB. The problem is that likely there was only 80-100 pax market. Once WS entered the route an evenly split market meant that NewLeaf could not operate.
Now the bigger question is whether WS will continue to operate to Mesa or whether all pax will move over to the PHX flights.
This could become an interesting strategy for NewLeaf, announce a market and if WS competes wingtip to wingtip; NewLeaf should pull out and force WS to take the loss. If WS does consolidate flights, then Newleaf has an excellent case to take before the Competition Tribunal.
Quote:
Originally Posted by Bigtime
They pushed their luck right on WestJet's home turf. No surprise this happened, and they are getting grilled by customers over long delays on New Years Eve.
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The problem for the Canadian airline market is that while Canadian's want cheap airfares, they dont want to patronize ULCC airlines. Instead Canadians want someone else to patronize ULCC and wait for WS or AC to lower their fares, then Canadian's will wait to fly the airline of their choice at the lower rate.
In contrast Europe, USA, and Asia have a large market of people willing to never fly traditional airlines again. So they fly Allegiant, Ryanair, or Jetstar and don't look at UA, BA, or QF.
ETA: Jim Young, CEO of Newleaf is being interviewed on BNN. The real reason for dropping AZA is that while they got a good initial response to the new services, this only accounted for 30-50% load factor, not enough pax to combine flights or operate profitably. Their initial market analysis concluded that there is a market for AZA for one airline to operate 3-4x per week, but two airlines was too much services. So basically WS and Newleaf split the market in half, but newleaf could not sustain the cash losses.