The Next North American Battleground… Small Canadian Cities

North America is a big place. When you think about where the next big airline battle is likely to be, you probably aren’t going to guess it’s in small town Canada. You’d be wrong. The battle is brewing, and Air Canada is on the defensive. WestJet is getting ready to invade.

WestJet and Air Canada Face Off

In Canada, there are two big domestic players. We have the big ole’ legacy Air Canada and the young punk WestJet. (Yes, there are other players including the stylish and cool Porter and some of the guys doing rugged flying into the north, but those are niche players.) WestJet has often been called the Southwest of Canada, but it’s really more like JetBlue. There is live television onboard, and the airline wants to partner with many others in order to feed its flights. It also has put together an extra legroom product that it will sell for a fee.

Dynamics of Canada
One of the more interesting announcements to come from the WestJetters was the decision earlier this year to create a regional airline that would fly turboprops around smaller cities.

This sounds pretty goofy, but Canada is a different kind of place, eh? It is an enormous country from a geographic perspective but all but 2 or 3 people out of its 35 million residents (an eighth of the US population) live very close to the US border. So the country’s air travel needs tend to be very unique.

WestJet Choose Small Over Big
There aren’t a ton of cities that can support big airplane service, but WestJet has done a great job of making huge gains in those places. But the opportunity is somewhat limited, and that means WestJet had to start thinking about going elsewhere if it wanted to expand. It could have been like most airlines and tried to go bigger. After all, flying big airplanes over oceans is downright sexy, right? But that would have been pretty stupid.

Air Canada today already flies all over the world and fills many of those seats with cheap connectors from the US. There is limited service from non-Canadian carriers (thanks to some protectionist policies up north) but ultimately, there isn’t a lot of opportunity. At least, there isn’t nearly the opportunity that there could be in the opposite direction.

Feeding small cities in the global network is still largely the domain of Air Canada and its regional fleet. Sure, there are plenty of other operators who do a lot of the tiny town flying – places like mines and oil fields. But for getting people around Canada and into the rest of the world, Air Canada dominates. WestJet saw that and decided that there was opportunity. After all, two beavers are better than one, right?

An Encore
So WestJet has been rolling right along. It decided to buy a fleet of Q400 turboprops. (Buy Canadian!) And it decided to name the airline… WestJet Encore. At first that named seemed odd, but then I remembered the dual French/English thing up there. WestJet Encore works in both languages. Though I think that I speak for English-speakers everywhere in saying that we would have all been perfectly fine with WestJet Part Deux instead.

But let’s get back to the point. WestJet Encore is pretty much ready to go except for a few tiny things… like where it’s going to fly. Routes won’t be announced until early 2013, and it won’t start flying until later next year. So there is plenty of time, but Air Canada isn’t taking any chances.

Air Canada Flexes Its Muscles
Air Canada has already seen a lot of traffic disappear domestically thanks to WestJet’s growth, and it doesn’t want to lose anything on the smaller routes it still dominates. So even though we don’t know where WestJet Encore will go, Air Canada is ramping up.

Apparently Air Canada thinks that a big chunk of the ramp-up will be in the West and so it’s diving in head first. Starting December 1, there will be one more flight each day between Calgary and Fort McMurray, Grand Prairie, and Yellowknife. Edmonton to Ft McMurray, Regina, and Saskatoon will see an extra flight as well. And not to be left out, Vancouver will get an extra flight each day to both Ft St John and Nanaimo. As of today, most of these are flown with 50 seat CRJs. Beginning in February, however, the 74 seat Q400 will begin moving into these and other routes in the region. So we’re seeing more flights and more seats on each flight. Let the bloodbath begin!

By the time WestJet moves into these markets, it looks like Air Canada will be ready for a fight. I’d imagine we’re going to see some serious bleeding until things sort out.

In the end, I can’t imagine that these markets can support all the service they’re about to get, so there will have to be changes down the line. Will WestJet really be able to make money in an area where other low cost carriers have struggled? If this were in the US, I’d say no. But it’s Canada. And things work differently up there. At least, that’s what WestJet is banking on.

[Photo via Wikimedia Commons User Leech44/CC-SA 3.0]

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