What do Canadian budget airlines have to look forward to as winter closes in?
As winter closes in and most of us in the Northern Hemisphere wrap up warm, itís that time of year when the budget airlines have dumped their seasonal beach destinations in favour of winter playgrounds. Skiing is the new jet skiing, most people opt for a nice mulled glass of gluehwein in favour of their usual chilled vodka and martini and clothing-wise less is definitely not more as itís just too cold. We do like to continue travelling in winter; in Canada things get very busy over the winter period and the airlines are still fighting hard for your custom. To keep passengers happy, LiveTV is now available on three WestJet aircraft and will be available on another twenty by Christmas. Passengers in Europe can only dream of such boredom conquering measures but at least the winter here in Europe is much milder.
The Canadian winter on the other hand can be a handful at the best of times Ė it has been known at numerous airports for several feet of snow to be dumped overnight and the Canadian airports therefore have some of the most advanced snow clearing capabilities anywhere in the world. Mindful of the problems that these heavy snowfalls bring, I asked WestJet about their procedures and they commented that ďGuests will be re-accommodated on the next available flight. Although compensation is not given, we do what is necessary to ensure our guests reach their intended destination as soon as possible.Ē WestJetís policy is very similar to most other budget airlines across the world. At time of writing Mother Nature was reminding me what it could do - Halifax airport had just shut due to the first major snowstorm of the season impacting at least forty eight flights and it is certain that there will be more airport closures in Canada and the USA before winter is over. Whilst it isnít feasible to drag a sleeping bag every time you fly you should at least bring your ATM card to get a meal and if you are travelling with your children make sure you have what you require to cope with their needs. Flyers should not expect to be automatically given a free meal, nor free accommodation when things go wrong. You pay for what you get, and if you didnít pay very much, donít expect very much when the situation goes bad.
Talking of bad situations and WestJet, they seem to have landed themselves in rather hot water recently. They might be a runaway success with Canadians I talk to on and offline who frequently cite its customer service as being particularly impressive, but Jetsgo Ė a privately owned rival Ė has filed a CAD $50m lawsuit alleging corporate espionage. This would raise eyebrows at any time, but Air Canada (Canadaís national carrier) also recently launched a CAD$220m lawsuit against WestJet alleging that Westjet was engaged in corporate espionage on its bigger rival, specifically that they gained access to a sensitive Air Canada website. This website is said to contain information on passenger loads, and WestJet allegedly obtained access courtesy of their Vice President Mark Hill.
Mr Hill has had to resign over the Air Canada affair, whilst WestJet CEO Clive Beddoeís own offer of resignation last week was rejected by WestJetís board. As is often the case in airline lawsuits, the mud is starting to be thrown thick and fast. Mr Beddoe commented to reporters that the Air Canada information is readily available from other sources but that it was morally wrong to access their site. Under cross examination from an Air Canada lawyer Mr Hill said that he deleted some computer files at home after "illegal trespass on the property by some thugs" going through his garbage. If I had thugs on my property Iíd be chasing them off with a baseball bat or calling the police rather than using my computer but thatís just me. A bit more mud; those thugs were actually private investigators hired by a suspicious Air Canada.
Not willing to let this one go, last week Air Canada nudged the stakes ever higher by commenting that "recent documents received from WestJet reveal that Mr. Beddoe and other executives had full knowledge of the improper access and use of Air Canada's proprietary information." Mr Beddoe accused Air Canada of lowering the bar apparently insinuating that it was a personal attack on him. Pushed for a reply about all these allegations and mud slinging, WestJetís media administrator Gillian Bentley unsurprisingly replied to me:- ďWe are unable to comment on any aspect of the lawsuit which is currently before the courts.Ē The question is which lawsuit, Air Canadaís or JetsGoís? The whole saga sounds like a script for a low budget daytime TV soap and it isnít likely to finish anytime soon.
Fuel cost problems.
Whilst itís unknown how the Canadian consumer will be affected by the lawsuits (the fourth major player Canjet is sensibly staying on the sidelines and watching with interest), nobody can escape the continued high cost of fuel forever. The US budget airline giant Southwest is insulated from current market costs because they hedged almost all of their fuel requirements for 2005 at $30 a barrel and thatís gives them a considerably lower cost base than many other market players who didnít hedge that far ahead. One who didnít hedge that far ahead is (youíve guessed it) WestJet whose domestic market share has now reached 28% albeit with a few hiccups; they recently abandoned the Toronto to Los Angeles route. WestJet admits it has already included some fuel increases in base fares and is currently reviewing whether to follow Canjetís lead and impose a fuel surcharge Ė some analysts are suggesting it could be $5-15 per seat depending on route distances. Things arenít looking as rosy as they once were, but everyone will be looking to reverse the trend despite a major CAD $28m marketing revamp from Air Canada (including signing up Celine Dion to front the campaign).
But there's new planes due!
Fuel concerns and hazy memories of Canadian singers from a bygone era aside, proving that itís well and truly shaken off its bankruptcy restructuring after months under creditor protection Air Canada has ordered sixty small planes from Embraer; a move that is sure to keep Canadian plane spotters happy for some time to come. Canjet is also following suit and four of its 200 series planes will be replaced later this month with four 500 series planes. Their entire fleet of outdated and inefficient 737-200ís are scheduled to be replaced by this time next year which will sharply bring its average plane age down by 10-15 years. Not intending to be left behind, WestJet is also phasing out its thirsty and elderly 737-200ís in favour of new generation 737-700ís and by sticking with 737ís continues to hold true to the common budget airline practice of one type of plane only. One of their planes is due by the end of the year whilst seven will arrive next year and another three 737-600ís are due in 2005. Once complete, Westjet will have one of the youngest fleets in the world. The same canít be said for Air Canada, but it does currently have 210 aircraft.
Overall itís a mixed look for the immediate future for the Canadian traveller as winter closes in. None of the allegations against WestJet have been proved in court, its fleet is getting ever younger, it is expanding its in-flight TV services and itís rare that I hear anything bad at all about its customer service; indeed it seems to have its own groupies these days and is starting to become the customer service benchmark for the industry. Not to be put off by the stiff competition Canjet has launched weekend saver fares and is promoting its Toronto to New York route heavily. Jetsgo has launched Quebec to Fort Lauderdale whilst Air Canada closed their low cost subsidiary Zip. It remains to be seen who will be next to make a play but itís not a time to be too shy in the continuing fight for Canada.