| |
Posted Aug 15, 2009, 7:25 PM
|
 |
Registered User
|
|
Join Date: Aug 2008
Location: Vancouver
Posts: 1,977
|
|
Quote:
Discount airline Virgin America eyes Vancouver
Such a move could prompt other cheap-fare carriers to follow
By Brian Morton, Vancouver Sun - August 14, 2009
Photograph by: Vancouver Sun graphics, .
VANCOUVER — At first blush, low-cost air carriers sound great. Who could argue with a flight to England for less than $300? Or for that matter, $49 to San Francisco (from Seattle)?
But such flights have been described as “no-frills” flying buses with customer service that’s, well, limited.
While none of the major U.S.-based discount air carriers currently flies through Vancouver, that may be about to change with one of the largest now eyeing Canada’s West Coast.
Virgin America Inc., a low-fare California-based discount carrier partly owned by U.K. billionaire Richard Branson, has announced it’s studying whether to fly to Toronto and Vancouver, as well as several new U.S. destinations.
As well, Vancouver International Airport (YVR) has been trying to lure Southwest Airlines, a Denver-based discount air carrier — so far, without success.
If Virgin proceeds with the plan, analysts say it could not only be flying into Vancouver within three to six months of an announcement, but the move could prompt other discount carriers to follow suit.
Others say it would put strong downward pressure on all air fares, making cheaper flights the norm for British Columbians.
For its part, YVR would welcome two-year-old Virgin America.
“We’ve talked with them and we would look at it as an opportunity on the West Coast,” the airport’s director of aviation marketing John Korenic said in an interview. “And it would very likely have an impact on [all flight fares].”
Korenic said Virgin — which now offers one-way flights for just $49 US from Seattle to San Francisco and $69 to Las Vegas — would probably focus on moving travellers between its West Coast destinations, likely California initially.
“They are in an expansionary mode. And these carriers take three to six months to get established.”
Korenic also said that WestJet — Canada’s version of a discount airline — is the only low-cost flyer currently crossing the border. He said YVR is still talking with Southwest, but that airline continues to operate strictly within the U.S.
“Any time you cross the border, there’s some incremental cost. All carriers are having a difficult time with the economic situation.”
But would the U.S. discount flight brand be welcome on the West Coast, where flyers expect a bit of a premium on service, if not a free in-flight meal?
Don’t count on it, at least not in the immediate future, says one airline analyst.
“It’s challenging for low-cost operators to come [to Canada] and be successful,” Calgary-based aviation analyst Rick Erickson, of R.P. Erickson and Associates, said in an interview. “[Virgin] might look at introducing service at the start of the winter season, because you’d have people looking for sunspot destinations. But I’d be surprised if they’re coming.
“And if they are, I’d be surprised if it would be before May 2010.”
Erickson said one big reason the major U.S. discount airlines don’t operate in Canada is because airline costs — including fuel taxes, landing fees and airport rents — are higher here. “That $99 ticket suddenly becomes $149.”
As well, Vancouver is a very “mature” market, meaning that travellers have strong preferences as to who they like to fly with.
Another factor is that Air Canada’s economy fares and WestJet fares are becoming more competitive.
“There used to be a [big] difference, but it’s a lot closer now,” Erickson said. “As well, [Canadians] want some level of service. I think they’d find a real challenge in Canada.”
However, Tae Oum, a professor at the University of B.C’s Sauder School of Business and president of the Air Transport Research Society (a worldwide organization of air transport researchers), says that Virgin is a very aggressive carrier that has shown interest in Vancouver before.
“It would be great if they came in,” Oum said in an interview. “And if they decide, it would be quick — three to six months from the time they decide to come. There would be more competition and lower prices. And it would be an economic benefit to tourism and the business sectors.”
Oum said Virgin could be followed by others. “If they succeed and make money, then other low-cost carriers would consider.”
Marc-David Seidel, another aviation analyst at UBC, said Virgin’s expansion is part of the evolution of the airline industry, with the large carriers losing out to newer start-ups designed for a more competitive landscape.
He said the Vancouver service would likely link up with Virgin’s flights at its San Francisco hub.
“With the upcoming Olympics, Vancouver also is a logical extension for their network,” Seidel said.
However, a Virgin America spokesman told The Vancouver Sun that nothing has been decided, although Vancouver would be considered “under the right circumstances” by Virgin and other airlines.
“We’re a still growing airline that is seeing opportunity in many cities . Our original growth forecast projected growth to up to 30 cities within the first three to five years,” said Patricia Condon, public relations and events manager. “Vancouver is certainly on that list, but we don’t have any immediate plans.”
She also suggested that Virgin flights in Canada would have a relative degree of comfort: “Our flights offer touchscreen seatback entertainment, power outlets at every seat and WiFi fleetwide — so we also think our upscale, low-fare service would be a good fit with Vancouver travelers.”
Scott Clute, managing partner of Vancouver-based Global Travel, said Virgin’s entry into the Vancouver market would mean lower prices all around.
“I’m looking forward to the day they start service. When [Virgin] introduced service to San Francisco, it created tremendous pressures for [other] airlines to match their pricing. The price of travel dropped 30 per cent virtually overnight. It will be a win-win for the consumer.”
However, Clute said that if Virgin comes to Canada it would probably start service in Toronto. “[Toronto is] more likely than Vancouver because [Virgin] operates from Seattle as well.”
Meanwhile, an example of the possible future of discount air travel could be seen in Dublin-based Ryanair, which is turning a profit despite charging the equivalent of $60 Cdn for a one-way trip within Europe.
However, you won’t get airport check-in (there’s a $7 fee for online check-in) and, from some accounts, little if any customer service and no refunds under any circumstances. Others have complained that the planes are dirty.
Despite that, this year Ryanair’s passenger traffic rose to 16.6 million, up 11 per cent from 15 million in 2008.
Erickson hasn’t flown on Ryanair, but did fly EasyJet, another European low-cost carrier, a few summers ago. It also has a first-come, first-served seating arrangement, and that turned him off.
“It was a cattle-car experience,” he recalled. “The Canadian consumer wouldn’t go for it.”
With a file from Canwest News Service
[email protected]
PRICE COMPARISON
Following are one-way fares listed on airline websites for Sept. 1. Air Canada prices are in Canadian dollars from Vancouver, while Virgin America prices are in U.S. dollars from Seattle. Prices don’t include taxes or other charges.
Air Canada
Vancouver to San Francisco: $169
Vancouver to Los Angeles: $175
Vancouver to Las Vegas: $155
Vancouver to New York: $294
Virgin America
Seattle to San Francisco: $49
Seattle to Los Angeles: $69
Seattle to Las Vegas: $69
Seattle to New York: $289
© Copyright (c) The Vancouver Sun
|
Source: Vancouver Sun
|
|
|
Prev
we're getting there, but Toronto still rules ....
Linear Mode
