AC New Makeover

[Kip Powick]

Air Canada embarks on Extreme Makeover

From Tuesday's Globe and Mail

Air Canada will unveil new plane interiors in 2007 as it seeks to gain a competitive edge by rolling out a revitalization program named Project XM: Extreme Makeover.

The stars of the $300-million project are touch-screen panels on seatbacks. Passengers will use their fingers to press options displayed on the screens, then sit back and enjoy beefed-up video and audio entertainment, said Montie Brewer, Air Canada's president and chief executive officer.

"Every seat on every aircraft will be replaced," Mr. Brewer said in a year-end interview.

Air Canada's offering includes on-demand movies and a selection of prerecorded news broadcasts and TV shows, but there isn't live programming -- a feature carried by rival WestJet Airlines Ltd.

Montreal-based Air Canada expects to have two-thirds of its fleet of 200 aircraft refurbished by summer, with the makeover project scheduled for completion by the end of 2007. The entire cabin will get a facelift, including the introduction of lie-flat seats in business class on overseas flights. So far, in a preliminary phase, 14 planes have had their interiors finished and are now in service.

Another feature on Air Canada's seatback screens will be interactive games such as puzzles and card games. There will also be three-prong plugs for laptops, and USB ports to recharge iPods and BlackBerry devices.

Air Canada, which emerged from bankruptcy protection in September, 2004, is revamping its interiors after rival WestJet retrofitted 50 planes in its fleet of 63 aircraft over the past two years. Calgary-based WestJet expects to complete the installation of live satellite television on seatbacks in 2007. WestJet's "LiveTV" service is free, but it also has pay-for-view movies.

After struggling for survival, Air Canada has bounced back financially and is now fit enough to upgrade from old interiors, where several rows of passengers have to look at one screen, analysts say.

Air Canada's new in-flight entertainment system will be free initially, but the carrier wants to eventually generate revenue, perhaps through some type of pay-for-view initiative or tailor-made offerings.

Under one scenario, consumers who pay a higher fare would enjoy first-run movies, while those who choose the lowest-fare Tango class would receive basic offerings such as prerecorded TV shows. On the audio side, there will be an array of music channels, with content provided by Canadian Satellite Radio Holdings Inc.'s XM Canada brand.

"Our mantra here is choice," Mr. Brewer said.

Other possibilities include putting duty-free catalogues on the touch-screen system and allowing pollsters to conduct voluntary onboard surveys electronically.

Rick Erickson, an aviation consultant who heads RP Erickson & Associates, said Air Canada needs to improve its dated interiors, especially to compete for business-class travellers on overseas flights.

British Airways PLC, Singapore Airlines and Cathay Pacific Airways Ltd. are among the major carriers that already boast modern interiors, so Air Canada couldn't afford to simply rely on building loyalty through the Aeroplan program to keep frequent fliers, he said.

"The new interiors will allow Air Canada to reclaim a position among the world's premier airlines," Mr. Erickson said.

While WestJet has leather seats, Mr. Brewer said Air Canada is sticking with cloth fabric seats because they "breathe better" and customers find them more comfortable than leather on long-haul flights.

"There's the old cloth and leather debate. Everyone has a favourite, but we find that cloth is preferred by most customers," he said.

The airline will also take delivery of new Boeing planes over the next year. Five Boeing 777-300ERs and three Boeing 777-200LRs are on the production line, with the new interiors included as part of the package. The Boeing 777s will gradually replace the carrier's Airbus A340s.

As well, 30 new aircraft from Brazil's Embraer SA, incorporating the new seatback screens, will join Air Canada's fleet over the next 15 months.

Mr. Brewer said he expects to deploy some of the Boeing 777s from Toronto to overseas destinations such as London, Frankfurt, Tokyo and Hong Kong. The Vancouver-Tokyo route is also slated to use the 777 series.

Another major project to be introduced in 2007 will be a new computer reservations system. Known as Polaris, the Web-based system will be a vast improvement over the existing network, he said.

It takes three weeks to train employees on Air Canada's antiquated, text-based "RES III" network, but only a day of training is required for the Web-based system.

The technological upgrades will speed up the check-in process for some travellers. For instance, a bar code can be sent to a BlackBerry, and that image would serve as the boarding pass. Passengers will still be able to print their own boarding passes from their computers in advance, if they choose.

Mr. Brewer said that besides new interiors and modern reservation technology, Air Canada will benefit from expansion at Toronto's Pearson International Airport. Pier F, an international departures area connected to Terminal 1, is set to make its debut Jan. 30.

The opening of Pier F will consolidate Air Canada's flights into one main terminal, clearing the way for the demolition of Terminal 2, where the carrier's U.S. service is currently based.

By having service under one roof in Toronto, Air Canada will be able to attract more connecting passengers from the United States.

COMMENTS FROM Globe and Mail readers...........

A C from Saint John, Canada writes: WestJet's 'live' entertainment if fine for WestJet because they only fly domestically in North America where there is lots programming choice. I can see why Air Canada chose preloaded programming because as an international carrier what live programming can you get flying over oceans and tundra and crossing many time zones?

Posted 26/12/06 at 9:02 AM EST |

john shantz from Canada writes: ......glad to see they're skipping the leather seats....... like them in my car where I have complete control over the a/c and heat...... but it just doesn't work in a long metal room with one thermostat......

Posted 26/12/06 at 9:06 AM EST |

Terry Quinn from Canada writes: Aeroplan has basically ceased to be a frequent flyer progam and has simply become a marketing Company almost independent of AC and possibly to be totally spun out within a few years. The FF program,now managed directly by AC the airline division, continues to be gutted, possibly for good economic reasons, and has become more of a marketing tool for the airline. The days of free goodies are over with an aeroplan seat to Europe now usually costing many more miles than previously and surcharges/taxes of over $200 per ticket. This has given the bank Credit cards an opening to provide 'free' travel as well. All that being said AC needs to make money to pay for upgrades and give their investors a decent return on their shares and they appear to be on the right track. Fares are going up and will continue to do so fo some time as the planes are all full. Canada still needs more competition in airlines as AC is still the only domestic based international carrier. Westjet will not be that competitor due to their one class and one plane type fits all strategy. Opens skies is the answer.

Posted 26/12/06 at 9:09 AM EST |

Mike Bellows from Canada writes: I don't understand why Air Canada would 'modernize' with pre-recorded shows while its rival already has live TV ?? It will also be interesting to see how they plan to recover costs when they start limiting access as the article states. I am an Elite member who would welcome a smile from the senior attendants on my 13-15 hour flights much more than a taped episode of Friends or yesterday's news

Posted 26/12/06 at 9:13 AM EST |

B Johnson from Hfx, Canada writes: and be prepared to pay a lot of extra dollars for each and every little ditty they offer from pillows to seat selection from your computer. Welcome to Air Canada's A LA CARTE service and say goodbye to affordable buffet service. So if you're willing to pay double the price to fly good for you and your wallet. The rest of us will fly bench-n-cord until it's completely eliminated. We do not have a choice to fly out of Halifax on other than A/C as Canjet went to chartered flights only, but rather than being held hostage to monopoly airline price structures, we'll drive to Moncton and fly out of there. I wonder if AC will stop losing luggage on a massive scale when the prices increase or will one be charged EXTRA for that too. Try $15.00 tax for a boarding pass printed from a home computer ...... and the list goes on.

Posted 26/12/06 at 9:46 AM EST |

Bob Currie from Halifax, Canada writes: It would be even nicer if AC would consider revamping its surly staff and impenetrable telephone/online customer 'service' options. By world standards, our national airline is an embarrassment.

Posted 26/12/06 at 10:08 AM EST |

Larry Robinson from white Rock, writes: Mike - please no more baggy AC staff comments. I just returned from flying Hong Kong, Beijing, Xian, Vancouver on three different airlines and it is amazing the difference in attitude that a new aircraft with contemporary interiors will do for service and enjoyment. The dowdiest aircraft was a B767, CP era, on AC from Beijing and the staff tried hard but the experience was blah. AC staff on a brand new Airbus was a different story to HongKong - wonderful experience. AC staff are very professional, and they have perservered in circumstances where most other airlines' staff and executives would have folded.

Posted 26/12/06 at 10:17 AM EST |

A C from Canada writes: I only fly AC when I have no alternative!!! Internationally I fly emirates after connecting from AC and one can really see the difference. It's just day and night. Good luck AC but count me out!!!

Posted 26/12/06 at 10:53 AM EST |

Alison Dennis from Edmonton, Canada writes: Bring back the meals! I hardly ever fly, but when I do I preferred to fly Air Canada, a) because they provided a meal (I liked those cute little trays!) and because they provide great connecting flights from Toronto to Kingston, where my elderly parents live. I want to be pampered on the rare occasion I can afford to fly. Even if you could get the meal by paying an extra few dollars - I would do that. I used to purposely choose Air Canada over West Jet because I found West Jet's service to be cheap (on pampering). Now, there is no difference between these two airlines for economy class. They are both cheap.

I don't want to subsidize the cost of electronic games in the cost of my flight because I don't like them - the customers who want to play them should pay for that service. Why doesn't Air Canada ask their customers what they would like, and what they would be willing to pay a little extra for??

Posted 26/12/06 at 10:55 AM EST |

Sherman Sterling from Canada writes: I've got news for AC. It isn't the lack of features that are causing people not to fly with your airline. It is the rude and unsurly flight attendants and staff. West Jet staff are nice. They smile. They are young. They are vibrant. They tell jokes and really like their jobs.

AC staff on the other hand are rude. And rude some more. Never smile. And are rude again.

Let's see. I can travel with friendly people or rude people. You do the math.

Posted 26/12/06 at 11:01 AM EST |

Jeff Edwards from Vancouver, Canada writes: Luv Air Canada. It is always exciting to run literally full clip to make up for Air Canada's lateness while connecting in YVR. I do not get a chance for such good exercise on Westjet in Calgary. Kudo's to Air Canada for taking into account the passengers' need for aerobic exercise! Really, who cares about Air canada's on-board entertainment, when connection stress overwhelmes you anyways?

Posted 26/12/06 at 11:06 AM EST |

Brian bowes from Canada writes: Sounds like Ford Motor company a couple of years back when they were having problems with their Explorer, Fix everything except the problem! Air Canada does not have a clue about what there customer wants. Placing a TV in every seat will not make up for the crap you have to endure to get there !

Brian

[HHI]

Mike Bellows from Canada writes:  .... I am an Elite member who would welcome a smile from the senior attendants on my 13-15 hour flights much more than a taped episode of Friends or yesterday's news.

Sherman Sterling from Canada writes: I've got news for AC. It isn't the lack of features that are causing people not to fly with your airline. It is the rude and unsurly flight attendants and staff. West Jet staff are nice. They smile. They are young. They are vibrant. They tell jokes and really like their jobs.

AC staff on the other hand are rude. And rude some more. Never smile. And are rude again.

I usually find that when I smile at people, they smile back.

Have to wonder if these two gents have ever tried that?

Henry

[ChicoChico]

HHI ...you first!

Chico