Hicks on Biz: Air Canada is 'archaic' - originally published Edmonton Sun, Nov. 9, 2013
Air Canada, you have missed your cross-border Edmonton flight.
While Edmonton International Airport has grown and grown, while Edmonton/Northern Alberta is acknowledged as one of the world’s fastest growing regional economies, Air Canada is not capitalizing on the international and trans-border (i.e. USA) flight potential of our market.
Mr. Air Canada Chief Executive Officer Calin Rovinescu, I can tell you why.
Air Canada is basing its international service on an archaic marketing model – that the vast majority of its international and American flights should originate out of four “hub” airports – Montreal, Toronto, Calgary and Vancouver.
That was a progressive, forward-thinking corporate strategy, Mr. Rovinescu … 20 years ago.
But today, there are FIVE aviation hubs in this country, the fifth – and fastest-growing of the bunch – being Edmonton.
The evidence is as clear as the nose on your face, Mr. Air Canada Board Chair David Richardson.
Since 1995, non-stop, year-round daily or near-daily flights to American cities from Edmonton International Airport have grown from two to 13 destinations.
Not one of those routes belong to Air Canada!
As those routes became viable, Air Canada continued to insist Edmontonians should fly to Calgary to connect to trans-border Air Canada flights – cramped commuter jets, lugging luggage, hours of dreadful airport limbo.
The strategy was clearly wrong, Mr. Air Canada Corporate Strategy VP Derek Vanstone.
Wrong in the past, exceptionally wrong in the future.
In Air Canada’s absence, WestJet, United, Alaska, Delta and US Airways have happily filled the void. (United and Air Canada are Star Alliance partners, hence United flights out of Edmonton are also displayed as Air Canada flights. However they are still two separate, competing airlines.)
Here are the glaring results of a marketing strategy that is not working, Mr. Air Canada CEO Rovinescu.
In the early ‘90s, Air Canada had 60% of the Edmonton air travel market.
In 2013, that market share has shrunk to 35%.
In the same period, the number of passengers have tripled to over nine million in 2012.
Which brings us to scheduled international flights.
In 2007, Air Canada finally saw the light, and opened a non-stop flight from Edmonton to London, England – daily in the peak summer market, three to five flights a week in winter.
Air Canada has been ambivalent about this flight – it’d still rather fill up its European non-stops out of Calgary with Edmontonians. You know the routine – cramped connector flights, lugging luggage, hours of airport limbo.
And now, in what appears to be nothing more than a fit of pique, Air Canada has killed the London flight for this winter, claiming Edmonton Airports is unfairly subsidizing incoming competitor Icelandair, which, not until the spring of 2014, will offer one-stop service to European cities via Reykjavik. The “unfair subsidy” claim is specious, at best.
Messrs. Richardson, Rovinescu and Vanstone, give your heads a shake!
Edmonton Airport, as Canada’s fifth aviation hub in the fastest-growing part of the country, is just starting to grow its international non-stop flights! We need, and will soon be able to fill, non-stops to London, then to Frankfurt, then Amsterdam, eventually to China, Hong Kong and Manila.
And you’re abandoning the market? Great strategy!!!
I must hasten to add that Air Canada does “get it” domestically, with 55 Canada-bound flights a day out of our airport.
But, Air Canada brass, please understand.
Edmonton is no longer subservient to Calgary. Our regional economy is producing wealth comparable to Calgary’s. Our “elite” front-end flyers – skilled energy-services personnel working around the world – are numerous and growing.
Air Canada has to realize, if it’s to profit from the Northern Alberta market in the decades to come, that international service from Edmonton should be encouraged, not squashed.
Think of Edmonton and Calgary as you do Toronto and Montreal – two dynamic cities, not one feeding into the other.
Otherwise, you’ll lose all our upcoming non-stop international flights to airlines like Icelandair.
Just as you lost the trans-borders.
Air Canada/Edmonton factoids
Total flights a day out of Edmonton, 55.
Total non-stop flights a day to American destinations, none.
Total non-stop flights to International destinations (scheduled service), one - to Heathrow, London, daily in summertime, three to five times a week in winter: flight to be suspended January to April, 2014.
International flights a day out of Calgary, two – to Heathrow and Frankfurt
Total number of Air Canada American non-stop routes out of Calgary, seven.
Number of other airlines offering non-stop, year-round or seasonal service to seven European cities out of Calgary – four.
Total passengers in August 2013, flying on Air Canada’s Edmonton-Heathrow non-stop, 11,655.
Total for August, 2012, 10,908.
Year-over-year growth, 6.8%.
(Source: UK Civil Aviation Authority, UK Airport Statistics)
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