Quote:
Originally Posted by Canadian74
These new start up ULCCs seem to be avoiding Calgary. I guess one of the main reasons is the Westjet hub at YYC.
But I think some market is probably there, for ULCC flights to secondary Vancouver, Toronto area airports...
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The ULCC are largely avoiding YYC because there is strong presence in both AC and WS, which is unique to Canada and the world (most hub markets have only one major hub carrier) for cities the size of YYZ, YVR, YUL, YYC.
The second major reason is that the hometown ULCC for YYC is Enerjet/FlyToo. Enerjet is just as actively in the investment market searching for startup capital, but is not making grandiose statements that attract media attention.
Third major reason: private Equity really does not like their ULCC's being number 3 in the marketplace or specific routes. They much more prefer being #2 player. In YYC, almost all routes have the 1 and 2 spots filled or have been filled by AC and WS in the recent past (YYC-YHM and YYC-YXX come to mind, AC has started both routes).
Fourth major reason, Canada and Calgary in particular is not a good location for the ULCC concept.
- the ULCC concept needs to have unique routes where a little bit of inconvenience on one or both ends of the route can persuade some pax to fly from an alternate airport. WS experience at both YHM and YXX proves that very few people are willing to put up with a little inconvenience for a little discount. In Canada, people want a little bit of inconvenience for a large discount.
- Canada is a unique region where the top four markets are dominated by single commercial airport and comprise 50% of the overall market. Further, if you add up YEG, YOW, YHM and YWG (the 5th to 8th largest markets) the number of pax does not equal YYC.
- ULCC airlines need a supply limiting factor in order to be successful. In Europe and the USA, slot controls and other airport constraints provide the supply limiting factors.
In Canada, the is a market for ULCC to operate YYZ to YUL/YYC/YVR double daily plus single day seasonal service on YYZ to YEG/YWG/YHM. However no Venture Capital group will fund the startup because its too far from the tried and proven ULCC concept.