Guest manwest Posted July 16, 2003 Share Posted July 16, 2003 What are yopur thoughts on what the *New AC* should be. I think AC should stay out the the crowded locost carrier maarket and specialize in what it *did* best. Provide friendly efficient service between major cities in Canada eg. yvr-yyz yyc-yyz yeg yyz ywg yyz, also to yow yul yyt etc. Drop all the other domestic routes that they don't make money on, drop the put the other guy out of business by undercutting them and losing money while doing that mentality. Provide trans border and international service. In doing this AC could rationalize its fleet, use two or three (max) aircraft types, eg A320 for domestic long haul and trans border and A340 for international. Offer the business class product, there is a large segment of the market they wish to have that service. Treat your customers as friends, smile, empower all staff to make decisions affecting the customer, if there is a problem let them solve it the best way possible at the time, avoid having to write a letter etc etc, the customer will appreciate it and you willl continue to have them as a customer. Rationalize your fare structure, there are too many. It seems the published fares are the same as the AC web fares, wheres the savings. Offer fares that are reasonable, fair, and competitive, have your *product and service* up to par that these fares are good value for your passengers dollar. When you advertise your fares, list the total fare then list the taxes as another total, the public will appreciate seeing what the actual fare is and will not get shell-shocked when they go to purchase and discover the taxes are more than the fare is. Treat your customers as you wish to be treated yourself when your buying a product or service. Treat your staff with respect, you will be amazed how they will enjoy their job when they know they are respected and appeciated. Treat your travel *partners* with repect, the travel agents,tour operators and fellow airline staff. You may just see your sales increase. A lot of what I have said in this long winded post is common business sense, but maybe it needs to be repeated as some may have lost sight of what good business sense is. Link to comment Share on other sites More sharing options...
John S. Posted July 16, 2003 Share Posted July 16, 2003 Have you been sneeking a peek at some proposals being delivered to the various creditors? Link to comment Share on other sites More sharing options...
ai Posted July 16, 2003 Share Posted July 16, 2003 "I think AC should stay out the the crowded locost carrier maarket and specialize in what it *did* best. Provide friendly efficient service between major cities in Canada eg. yvr-yyz yyc-yyz yeg yyz ywg yyz, also to yow yul yyt etc. Drop all the other domestic routes that they don't make money on, drop the put the other guy out of business by undercutting them and losing money while doing that mentality." The problem is that the LowCost guys have grown significantly (and they continue to grow). Are you really aware of the current domestic market environment. For instance did you know that we are facing fierce coempetion on the market you named. We have to contend with heavy LCC competition on YYZ-YVR, YYZ-YYC, YYZ-YEG and YYZ-YWG. Did you know that WS is currently offering a $99 OW fare on the YYZ-YVR route which we have had to match in order to remain competitive. So much for your assessment of our behavior "drop the put the other guy out of business by undercutting them and losing money while doing that mentality." You then go on saying that "A lot of what I have said in this long winded post is common business sense, but maybe it needs to be repeated as some may have lost sight of what good business sense is." With all due respect manwest, I am not entirely convinced what this "business' is currently going through and how it is shaped. This being said, you clearly cannot claim that you are expressing "common sense". You are also seemingly not aware of the fact that AC has introduced (on the domestic front) precisely what you are advocating for "rationalized fare structure" Please do not take this personally; however, it is far too simple to claim that common sense is lost and that this is where we need to start to better AC. Link to comment Share on other sites More sharing options...
Guest manwest Posted July 16, 2003 Share Posted July 16, 2003 No not peeking at any proposals. just my thoughts. Link to comment Share on other sites More sharing options...
Guest manwest Posted July 16, 2003 Share Posted July 16, 2003 Isn't the lo-cost market just a litle crowded? Why get into that area when you can have a whole other market to yourself?? Would it not be better to concentrate on the trans border and international routes, two areas you can compete efficiently on, and hopfully make a profit, instead of having to undercut or match low domestic fares and end up posting yet another loss, and end up another year or so in the same position you were on April 1 2003? Or do you think having to be just like everyone else, doing what they do, the way they are doing it is going to be profitable?? Yes I think it is common sense. Yes these are my thoughts and opinions. Link to comment Share on other sites More sharing options...
John S. Posted July 16, 2003 Share Posted July 16, 2003 Some would say "Great minds think alike." Of course others would say "Fools seldom differ". (We fools have been called worse by some of the best and brightest, so it takes on a new perspective.) Link to comment Share on other sites More sharing options...
ai Posted July 16, 2003 Share Posted July 16, 2003 Fair enough - they are your thoughts and oinions - no problem there. You hvae to admit that the Transborder and International markets depend heavily on feed traffic from domestic. We are the only domestic carrier with an extensive T/B and Intl' market. We need to maintain our presence on such key routes (as the one you have mentioned) in order to support T/B and Intl' flights/markets. Furthermore, AC's plan is to lower costs in order to better compete in today's airline/aviation environment. Who is to say that we will remain unprofitable. A given markets profitability is a function of both the profitability of a route on a "stand alone" basis as well as the "network" traffic it generates. Your arguments indicate that our feed traffic is profitable, so who is to say that we will not be improving our "stand alone" profitability given all our cost reductions??? Finally, once you pull out of a market...it is far too difficult to get back into it. You would better think twice about your alternatives prior to abandoning a route/market. Link to comment Share on other sites More sharing options...
Guest manwest Posted July 16, 2003 Share Posted July 16, 2003 Feed into the main routes with the tier 3 carriers, or strike up a code share with one of the present lo-costs. I don't have a crystal ball to say who will be profitable or who will lose money, I don;t know what the BOD will decide with the creditors to which direction they will go with the company, but they will have to have a sound plan, and have all the employees on board and *happy* for it to work. I started this thread to give an opinion and to hear what ideas others may have in regards to the direction the new AC should be. Link to comment Share on other sites More sharing options...
Guest Qtip Posted July 16, 2003 Share Posted July 16, 2003 Gas the Tier 3 and keep all the money in our airline. Lou # 20 addresses tier 3 wages at Jazz and this way all the revenue stays in AC. We really don't need Tier 3 anymore with Jazz's proposed wage structure. Link to comment Share on other sites More sharing options...
UpperDeck Posted July 16, 2003 Share Posted July 16, 2003 I believe that the "match fare to maintain share" paradigm is wrong. If the cost of delivering a product is $x and your opposition offers the product for $x -$y then they either have a lower cost or are losing money, which they cannot do indefinitely. If your market is fickle, the customer will return to you when the competition realizes it cannot sustain its low fare provided you are selling a desireable product. If your cost is too high ---lower it or stay out of that market. You simply cannot continue to sell a product for below cost and hope to make money. It's a mugs game. Link to comment Share on other sites More sharing options...
Guest V1V2Vgo Posted July 16, 2003 Share Posted July 16, 2003 Utilize Jazz as the new Lo Cost carrier, as planned. Tier three may be gone, as Jazz has offered to match their wage structure. Mainline is long haul only. Link to comment Share on other sites More sharing options...
Guest Qtip Posted July 16, 2003 Share Posted July 16, 2003 BINGO!! The new plan. Looks good and I bet it's not far off the mark either. Link to comment Share on other sites More sharing options...
Powermatic Posted July 16, 2003 Share Posted July 16, 2003 Good luck Jay. Maybe we don't need Jazz with AC's new wage structure. Link to comment Share on other sites More sharing options...
proview Posted July 16, 2003 Share Posted July 16, 2003 There has been much talk about what sort of business model the 'new' Air Canada should adopt, but it is not easy. Every suggestion has problems. As an example, let us eximine the suggestion to 'drop money losing routes'. This sounds good in principle, but it causes problems elsewhere. The airline can only be successful if it has a competitive advantage over its competition. On the Vancouver-Edmonton route (yvr-yeg if you must), Air Canada is at a disadvantage compared with Westjet; hence Air Canada loses money where Westjet turns a profit. However, on Vancouver-Hong Kong (after this medical thing works out) Air Canada has an advantage over Cathay, in large part because it has access to domestic 'feed' whereas Cathay does not. Now if Air Canada dropped its money losing Vancouver-Edmonton service, it would also lose the Edmonton 'feed' to the Hong Kong route, and thus would lose most of its advantage over Cathay. Does this make sense? Link to comment Share on other sites More sharing options...
Guest manwest Posted July 16, 2003 Share Posted July 16, 2003 Yes it makes sense to a point, you could still drop most of the flights from yeg to yvr and operate a Jazz aircraft to feed the bank of transpacific flights ex. yvr. It would mean having to plan the trans pacific flights in a block ex. yvr, and use for example a Jazz flight for that timing only, thus not operate yeg yvr several times a day, losing money on each of those flights. The same banking of flights would work for trans atlantic out of the major cities, eg yxu-yyz-lhr etc etc. Link to comment Share on other sites More sharing options...
Guest GDR Posted July 16, 2003 Share Posted July 16, 2003 Hi manwest This is what I believe will happen if AC management were to take your suggestion. 1/ We keep scaling back on the domestic routes as WestJet and Jetsgo etc expand. 2/ As Jet Blue and WestJet etc move into the transborder we keep reducing that as well. 3/ As new entrants start doing more and more international we start scaling that back. 4/ We look back at 2003 and say, I guess we should have gotten our cost structure down and competed aggressively for domestic market share. Greg Link to comment Share on other sites More sharing options...
Guest azztech Posted July 16, 2003 Share Posted July 16, 2003 Manwest, "Provide friendly efficient service between major cities in Canada .." I think that is part of the problem.The flying public doesn't percieve Air Canada as friendly.More like hostile.You have no doubt heard Air Canada unofficial mantra.."Were not happy into you're not happy". Public perception might be biggest hurdle. Azztech Link to comment Share on other sites More sharing options...
Guest Qtip Posted July 16, 2003 Share Posted July 16, 2003 Actually if you look at the ACPA proposed wages on the new RJ's they are considerably higher than ALPA's so maybe we do need Jazz. Link to comment Share on other sites More sharing options...
Guest V1V2Vgo Posted July 16, 2003 Share Posted July 16, 2003 Beautiful, you are onto something with that one. Better lay it on the creditors, they must have overlooked your brainchild in the recent proceedings. Cheers, Link to comment Share on other sites More sharing options...
Guest manwest Posted July 16, 2003 Share Posted July 16, 2003 Greg: In answer to your points: 1) How much lo cost traffic is out there to support WestJet, JetsGo, CanJet, Zip, Tango and the new locost Jazz?? Do we have more below cost sales to drive someone out of business, no one makes money doing that just to get market share. This was part of Air Canada's problem to start with. 2)Yes Jet Blue will be up here sometime, yes Westjet has plans for trans border, once again how much trans border locost traffic is there? Are there passengers out there who would pay a bit more for more service?? Does Air Canada play Air Copycat to be just the same as the others?? Wouldn't it be nice if Air Canada could be different from the others, stand out in the crowd? 3) Qantas has a lo cost international airline division called *Australian* it flys from Australia to points in the Orient, I do not know if they are successful, but if they are maybe AC could plan now to have a lo cost International division thus beating the others of the line. 4) To repeat going after market share and undercutting oneself, helped put Air Canada where it is today. Thanks for your input. Link to comment Share on other sites More sharing options...
Guest GDR Posted July 16, 2003 Share Posted July 16, 2003 Hi manwest I guess my point is that pulling out of large chunks of the market place is a very slippery slope. You're point is that we shouldn't be in markets where we are losing money. Basically I agree, but the goal of this restructuring is to come out of it with a cost structure that makes us competitive on the routes that you are talking about. It's not a matter of trying to drive anyone out of business. Everytime we are driven out of a market by WestJet we are that much closer to be driven out of another market and it just keeps on going, until we are out of business. This business of Air Canada having a goal to drive others out of business is nonsense. The goal isn't to drive anyone out of business. The goal is to compete effectively which is exactly the same goal as all of our competitors. Greg Link to comment Share on other sites More sharing options...
Guest manwest Posted July 16, 2003 Share Posted July 16, 2003 Greg; I guess we will have to wait and see what AC's new cost structure will be. manwest Link to comment Share on other sites More sharing options...
dagger Posted July 16, 2003 Share Posted July 16, 2003 It remains to be seen whether routes that have been losing money will lose money once all concessions take effect. The current restructuring creates a new cost template. As for low-cost, they intend to be on every route, on many transborder routes. The charters also offer a low-cost service internationally. It's not clear to me that you apply a rule - get out of the way of discounters - because there aren't many markets that are free of discount competition. Rather, you remake your airline to be profitable on all routes, even in competition with LCCs. Simple as that Link to comment Share on other sites More sharing options...
dagger Posted July 16, 2003 Share Posted July 16, 2003 It's interesting you say that. It doesn't explain why with so much more discount competition than a year ago that AC's market share is still over 70%. It may be that AC has been deep discounting to compensate for SARS and CCAA, but if that's true, and it's working, then that begs the question of whether anything other than PRICE really matters. I'm not saying AC couldn't do a better job of smiling but it may be that it doesn't do such a bad job as some like to claim. My experiences with AC - as recently as May/June - were good right down the line. No rudeness, no scowling, helpful FAs. Paris airport was a little screwup because of a slowdown by all airport employees, but hey, what would life be without a general strike in Paris? Link to comment Share on other sites More sharing options...
Guest Qtip Posted July 16, 2003 Share Posted July 16, 2003 " Maybe we won't need Jazz with AC's new wage structure" If you have a chance to see the proposed wages from ACPA & ALPA for the new jets you'll see as will the creditors that Jazz will be around for awhile yet. Creditors are only interested in FACTS as you should be!! Cheers Link to comment Share on other sites More sharing options...
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