Calgary International Airport II

[hollywoodcory]

Originally Posted by Tobuz

I’m confused ... as of today (Aug 15) I still see YYC-MEX non-stop being sold right through late spring of 2019.

WestJet is still showing a daily 737-700 round trip.

Where do you see this route being axed?

(I’m crossing my fingers that it continues. Fantastic to have this service.)

The timetable or flight schedule only shows it through October 21. I’m surprised though that it is still bookable. Are the fares still showing like $1000+ each way?

[Cage]

Originally Posted by LO 044

I guess i don't know how well the relationship between WS and KL is currently but if YEG isn't a premier destination for a variety of reasons then why do you think KL would let WS keep the "better" route into YYC?

How about YEG-AMS on the WS 763? Of course many people seem to say that WS 763's are not worth keeping unless absolutely necessary. Are these 763's really any worse than Rouge 763's?

And if KL and WS enter a joint venture then it really doesn't matter who flies the plane. Am i correct? In that scenario wouldn't you let KL keep the flights to AMS while WS looks elsewhere with the 789's?

If the JV is done correctly, then it becomes a metal neutral operation (so revenues and costs are standardized). WS gets YYC-AMS because they need a place to park their Dreamliners and the Dreamliner cabin can sell better on YYC than YEG.

KL gets YEG-AMS to keep the KL pilots happy. Take a look at todays rumor that AC #2 person, Ben Smith, is in the shortlist for the AF/KL CEO #1 spot. The AF/KL unions are miffed because Ben Smith is well known for skillfully bringing about the new complex JV operations and wringing out costs from the introduction of LCC airlines (like Rouge).

[thenoflyzone]

Originally Posted by Acey

I'm trying to find out more info on the specifics for MEX. One of my WS guys said "it's just not there for us".

It's a long history of MEX being unable to work for this town despite good loads... and it sucks.

If WS cant make YYC-MEX work, with no competition on the route, how on earth are they going to make YYC-Asia work. I just dont see it. If AC abandons YYC-NRT and WS jumps on, it might stick, since the market is already stimulated. Anything else out of YYC heading westbound is pure nonsense. Maybe ICN if they get a deal going with Skyteam, but even then....

[hollywoodcory]

Originally Posted by Acey

I obviously don't know the exact intricacies of why MEX isn't working, but it does seem a bit of a stretch to apply the economics of a 737 MEX run to a 787 Asia run, directly. I'd also heard about the notion of Asia being a losing effort initially for WS, which Cage just mentioned. Perhaps, dissimilarly, WS was not interested in MEX being a losing run at any stage.

Unrelated, first Frontier run to LAS went yesterday afternoon, forgot to run down there and check loads but I'd heard earlier that advance bookings for both LAS and DEN were strong for them through the end of summer (not surprising given the fares).

MEX was probably cut in favour of more frequencies to sun destinations. They know they can sell more seats to CUN or PVR for higher fares then MEX.

Frontier has been exceeding my expectations. I’d expected them to be run out of town by WS, but it seems they are holding their ground pretty good. Curious if maybe we’ll get more routes or increase in frequencies in the future.

[Johnny Aussie]

Originally Posted by hollywoodcory

MEX was probably cut in favour of more frequencies to sun destinations. They know they can sell more seats to CUN or PVR for higher fares then MEX.

Frontier has been exceeding my expectations. I’d expected them to be run out of town by WS, but it seems they are holding their ground pretty good. Curious if maybe we’ll get more routes or increase in frequencies in the future.

Not sure what’s happening with LAS but the nonstop appears to be ending 12 December. I realise Frontier has a funny way of loading flights about 6 months in advance but to not show any non stops after 12 December seems a bit late to add them now if they are indeed going to continue that route.

See what happens in the long term!

[hollywoodcory]

Originally Posted by Johnny Aussie

Not sure what’s happening with LAS but the nonstop appears to be ending 12 December. I realise Frontier has a funny way of loading flights about 6 months in advance but to not show any non stops after 12 December seems a bit late to add them now if they are indeed going to continue that route.

See what happens in the long term!

LAS was originally loaded all the way to February, just as DEN is. Perhaps the LAS route won't be year-round but just seasonal? I guess we'll just have to wait for the next schedule extension.

[Johnny Aussie]

Originally Posted by hollywoodcory

LAS was originally loaded all the way to February, just as DEN is. Perhaps the LAS route won't be year-round but just seasonal? I guess we'll just have to wait for the next schedule extension.

I think YYC-DEN on F9 at least has the DEN hub to allow connections whereas YYC-LAS is just O&D reliant. Perhaps too much competition with WS and AC on that route.

[Tobuz]

Originally Posted by hollywoodcory

MEX was probably cut in favour of more frequencies to sun destinations. They know they can sell more seats to CUN or PVR for higher fares then MEX.

Leisure destinations are usually where you see the most price sensitive (and often cheap) fliers who don’t care about service levels, loyalty to a carrier, schedule, or other things. It’s a low margin, high volume business.

MEX is (errr, was) a:
- leisure destination — but more for the less price-sensitive “traveller” than “tourist” market, and
- a major, ‘global’ business centre
- and the hub for one of WestJet’s key partners, with connections to points across Latin America.

As WestJet evolves from a largely leisure carrier to a mainstream “big leagues” player, I would have thought that MEX would have fit in perfectly. If they are indeed dropping it in favour of a package holiday destination, ouch. The economics of the route must have been beyond dismal.

If they couldn’t make a market like that work - especially when timed nicely for WS connections at YYC across the prairie provinces - wow. That’s a big concern.

And, personally, I’m really disappointed that it’s gone. (And that I’m back to using UA via Houston, and clearing through two different customs/immigration authorities in each direction.).

[hollywoodcory]

Originally Posted by Acey

The actual pricing of MEX does not reflect this, especially with CUN/PVR packages taken into consideration.

Oh

I guess until they come out and say why, we won't really know why they cut MEX as it seemed the loads were pretty good.

Originally Posted by Johnny Aussie

I think YYC-DEN on F9 at least has the DEN hub to allow connections whereas YYC-LAS is just O&D reliant. Perhaps too much competition with WS and AC on that route.

The times aren't great for connections in DEN, as you would have to overnight there for most of them. LAS is a focus city for F9, and has better scheduled times for connections. Granted, it's terrible OTP hinders connections further too.

[PPAR]

News just out that Westjet is cutting network capacity by 6%. MEX gone from both YYC and YVR. YUL to Quebec City cancelled as well. Lots of frequency reductions across the board.
Really bad fiscal second quarter for them,as was predicted by anyone who follows the shares...

[MalcolmTucker]

Seems an over reaction to their quasi strike. Might have been just the criris-tunity the evolving management team needed to implement a more focused strategy.

[YYCFlier]

Originally Posted by PPAR

News just out that Westjet is cutting network capacity by 6%. MEX gone from both YYC and YVR. YUL to Quebec City cancelled as well. Lots of frequency reductions across the board.
Really bad fiscal second quarter for them,as was predicted by anyone who follows the shares...

WestJet announces capacity cuts in Winter Schedule

YYC is mostly spared and actually it seems they are shifting capacity from YVR and YYZ - seems like there are bigger cuts to YVR and YYZ though we will see reductions on trunk routes (YYC-YVR, YYC-YYZ). MEX confirmed lost (so we're routing thru YVR or a U.S. hub) and DEN has service reductions. From previously announced service improvement, it appears still a net gain to YYC, net loss to YVR and may be a wash to YYZ.

It actually appears that WestJet is moving capacity from YVR to YYC -
YXJ increasing in YYC, down in YVR
CUN increasing in YYC, down in YVR
PVR increasing in YYC, down in YVR
SJD increasing in YYC, down in YVR

And from YYZ to YYC -
BZE increasing in YYC, down in YYZ
HUX increasing in YYC, down in YYZ

[Cage]

Originally Posted by MalcolmTucker

Seems an over reaction to their quasi strike. Might have been just the criris-tunity the evolving management team needed to implement a more focused strategy.

Crisistunity: Love it!

Regarding expansion, WS history has always been to go after the low hanging fruit that is immediately profitable with little start up promotional costs. Being a large airline with regional, mainline, and transoceanic operations those days are over.

DEN, IAH, DFW, MEX, etc are all routes that will take 1-2 years to become profitable. With the Dreamliners on the way, there isn't the ability to wait out the startup period - Margins are being immediately impacted.

The second and more hidden reason for the 6% capacity reduction. An MacIntosh to Granny Smith comparison of Q1-2018 costs noted the following:
- Westjet operations enjoyed an 18% CASM (Adjusted for stage length) advantage over AC.
- Air Canada North America (Domestic, Transborder, Sun) enjoyed a 30% RASM (adjusted for stage length) advantage over WS.

What the above means, AC is now more profitable in North America than WS. Where AC loses tons of money in Q1 - TransAt and TransPac.

This is why WS has to improve their service offering and transform into a Hybrid LCC and High Value airline. The day has come where WS costs have matured (senior staff, large hub operations) to the point where AC's revenue advantage is winning the day.

[casper]

Originally Posted by Acey

Air Canada A319 has replaced the previously scheduled E190 for YOW service this winter. I believe we will not see the E190 for regularly scheduled service again.

If they are still planing to go down to only having 19 of the E190 by the end of this year, then yes it looks like they will be come rare out here.

I think the Airbus A220 are going to be have a major impact on the airports like Calgary and Vancouver.

[zahav]

SUrprised no one has posted July stats yet (or if they have, I didn't see it in the last few pages).

Overall up 9.2%. Domestic up 12.6%, Transborder up 1.9%, and International down 2.4%. Great numbers for total and domestic, but the other two not so much. The dominance of domestic reative to overall traffic was very evident in July

[YYCFlier]

Originally Posted by Acey

I don't see A220 having a big impact on YYC, personally. Big opportunities for new flying out of YYZ and YUL and... that's what I see.

I see some routes converting to the A220, e.g.

YYC-YOW, YYC-EWR, YYC-YVR as the 319 is retired. Also AC has indicated it's a replacement for the 320s as well, so I expect we will see a ton of A220s in YYC since AC flies mostly 319s, 320s and 321s in YYC.

Hopefully we will also see the conversion of some CR9 routes - like YYC-IAH.

[YYCFlier]

Originally Posted by zahav

Overall up 9.2% YTD. Domestic up 12.6%, Transborder up 1.9%, and International down 2.4%. Great numbers for total and domestic, but the other two not so much. The dominance of domestic reative to overall traffic was very evident in July

This is not too surprising, given most of the YYC growth is with WestJet continuing to grow YYC as primary hub. We've also seen WS slowly push connections out of YVR and into YYC (like YXY) to take better advantages of the larger number of connections.

However, the lack of international traffic is a serious barrier to growth. If you look at YUL, which is only slightly larger in overall passenger traffic (10-15%) but with much higher O&D potential, there is a ton of international traffic. Most of this is driven by AC's strategy of growing YUL as a hub. We will not see this from AC in future (I see AC as steady or declining over time at YYC - we are still a hub, but small for them), and O&D traffic doesn't support a lot of growth for international carriers, so you need a carrier with lots of connecting passengers to fill the planes. It's up to WestJet to drive the international growth.

[Tobuz]

Originally Posted by YYCFlier

Hopefully we will also see the conversion of some CR9 routes - like YYC-IAH.

I don't recall the exact details, but there's a labour union reason why YYC-IAH can't be flown by mainline AC. It has to stay with Jazz.

[Cage]

Originally Posted by Acey

To clarify, I don't classify replacement of existing 319/320 flying as a big impact, that's to be expected and doesn't open any doors for us.

YYC-IAH has seen big cuts in the last 12 months and continues to trend downward. There's no reason to think they would upguage the QK runs by 80% and run new low CASM mainline frames on it.

A220 new flying could be contingent on new JV agreement with UA. If AC & UA can do a metal neutral JV on similar terms to the TransAtlantic JV with AC-UA-LH Group; then A220 flying could replace UAX E75 and UA 737/320.

To be clear, this would be A220 5x/day IAH-YYC plus YYC-DEN 2x (shared with UA mainline), plus YYC-SFO shared AC/UA, plus YYC0-EWR.

I expect the main A220 bases to be YUL&YVR with YYZ&YVR taking the max8/9 fleet. A220s will take over the mainline western triangle flying plus off peak nonYYZ transcon.

Originally Posted by Tobuz

I don't recall the exact details, but there's a labour union reason why YYC-IAH can't be flown by mainline AC. It has to stay with Jazz.

The labour reason was an IAH Teamsters clause that came out of bankruptcy. However recently AC has been running E90s on YYZ-IAH, so my guess is the labour reasoning has been resolved.

[CloudInspector]

Originally Posted by YYCFlier

This is not too surprising, given most of the YYC growth is with WestJet continuing to grow YYC as primary hub. We've also seen WS slowly push connections out of YVR and into YYC (like YXY) to take better advantages of the larger number of connections.

However, the lack of international traffic is a serious barrier to growth. If you look at YUL, which is only slightly larger in overall passenger traffic (10-15%) but with much higher O&D potential, there is a ton of international traffic. Most of this is driven by AC's strategy of growing YUL as a hub. We will not see this from AC in future (I see AC as steady or declining over time at YYC - we are still a hub, but small for them), and O&D traffic doesn't support a lot of growth for international carriers, so you need a carrier with lots of connecting passengers to fill the planes. It's up to WestJet to drive the international growth.

While connecting traffic is important for a hub, O&D plays a huge role as well. Which is why I think we’ll see YYZ, YVR and YYC have the bulk of the 787 flying (in that order).