WestJet announces largest-ever expansion

If there's a Canadian airline on the rise, it's definitely WestJet. Originally started in Calgary in 1996, it was originally only going to fly to destinations in western Canada (hence the name). But the airline quickly grew in subsequent years, and is now the second largest airline in Canada (behind Air Canada) and the largest Canadian low-cost carrier. WestJet has, more recently, announced plans to introduce a frequent flier program and has announced a codeshare agreement with Southwest Airlines (another one is in the works with Air France/KLM).

And earlier today, the airline announced what it billed as its "largest-ever seasonal non-stop flight schedule" in the company's history, adding 11 destinations for the winter schedule. Pretty much all of them are warm-weather getaways (Miami, Mexico, Cuba, St. Maarten, etc.) although I was rather surprised to see Atlantic City on the list. Year-round service to Yellowknife from Edmonton and San Diego from Calgary was also added. The airline's transborder and international capacity will increase 45% year over year, compared with just 5% domestically.

"This schedule represents significant expansion on both the transborder (U.S.) and international fronts," said Chris Avery, WestJet's VP, Revenue and Planning. "Both are strategic decisions as we continue to aggressively pursue and earn profitable market share in these critical areas. WestJet is well on its way to becoming the market leader in many of the most popular sun destinations in the U.S., Mexico and the Caribbean."

WestJet also has to be taking advantage of the rather precarious situation that its chief rival, Air Canada, finds itself in. Air Canada has been dealing with less-than-stellar relations with some of its unions, and is trying to avert a possible strike during the 2010 Vancouver Olympics. Any significant labor disruption at Air Canada could be enough to push the airline into bankruptcy for the second time in the past ten years - something that WestJet, which is not a unionized carrier, would be sure to exploit.

Read More

Problems ahead for global airline alliance immunity

The Department of Justice recently expressed objections to the antitrust immunity agreement that nine Star Alliance carriers (plus Continental, which will be a Star member later this year) are seeking. The airlines, which include United, Lufthansa, Air Canada, SAS and Swiss (but notably, not US Airways), have been looking to obtain global immunity from antitrust laws for some time now. In April, the Department of Transportation gave the carriers a tentative green light, but last Friday, the DOJ instead called on the DOT to "deny the broad requested immunity and instead grant a more limited immunity" - probably just a more limited transatlantic cooperation.

Right now, Continental technically competes with Star Alliance members on its routes, but under the proposed immunity agreement, that competition would be eliminated. The DOJ went further in its explanation, saying that Asian and Latin American routes flown by United and Continental would probably see price increases, as the airlines would no longer be competing. And the DOJ also took fault at some transatlantic routes; Continental has a pretty extensive list of European destinations, and the DOJ said that competition on some routes between the US and some of those cities would decrease substantially.

So, what implications does this have? First, it shows that the federal government is getting more serious about enforcing anti-trust policies, especially under the new presidential administration (as had been expected). Secondly, it could have serious effects for a similar agreement that rival alliance oneworld is trying to put together, and could be in the shape of things to come for such global agreements. And the DOJ statement also goes after cooperation between United and Continental on domestic US routes; "a sweeping grant of immunity raises significant concerns about harm to domestic competition," it said - something that might indicate obstacles to a potential United-Continental merger.

photo by caribb

Read More

Canadian airlines create passenger bill of rights

photo by caribb

Canadian carriers Air Canada, Air Canada Jazz, Air Transat, and WestJet have come up with new legally binding operating rules, or "airline tariffs," that give passengers more options if their flight is delayed or canceled. As part of the new set of rules, the four airlines must:

• Distribute meal vouchers for delays of four hours or longer
• Let passengers off the aircraft if the plane is delayed on the ground for more than 90 minutes
• Pay for hotel rooms for passengers affected by overnight delays or cancelations

Not bad - if I was a delayed or stranded passenger, I'd say that those rules are a pretty good improvement. But the four airlines, which have formed a lobby group known as the National Airlines Council of Canada, aren't exactly doing this unprovoked, however. A Canadian MP proposed a bill that would fine airlines $1200 per traveler who was bumped off of a flight longer than 3500km (about 2175 miles). Airlines would also have to start giving $500 an hour to passengers stuck on a plane on the ground for more than 60 minutes after the doors close.

Naturally, the airlines are keen to avoid having to pay such exorbitant fines, and are thus rolling out their own "bill of rights" in advance. And it's doubtful whether the proposed bill would actually pass; as the lobby group's president stated: "The compensation requirements are grossly punitive and do not recognize the cost/revenue environment that air carriers face today. In the current economic downturn, airlines are already struggling to provide service to their customers." The fines outlined in the proposed bill do seem rather "grossly punitive"; but at the same time, passengers who are stuck for hours on a plane on the tarmac should be compensated fairly. The National Airlines Council of Canada is proof that even if it takes the threat of a harsh bill to do it, airlines still have the capability to ensure that their customers are compensated in a fair manner.

Read More

Continental gets approval to join Star Alliance

photo by bribriTO

Continental Airlines yesterday received a tentative OK to join Star Alliance, although the US Department of Transportation will require Continental, United, Air Canada and Lufthansa to release an 'annual report' on the alliance. Star Alliance is already by far the largest airline alliance, and the addition of Continental just makes it even bigger. As such, the US government has expressed concern about the impact on competition - and so has Delta, Continental's current partner in the SkyTeam alliance, which has complained that the impact on US domestic routes would be too large, given that United and US Airways are already members.

Read More

American's new deal with BA, Iberia

American Airlines, Iberia, and British Airways announced earlier today that they were forming a three-way alliance that would allow them to cooperate on flights between Europe and North America. Although the three airlines are already part of the oneworld alliance, the deal allows them to work more closely together and to cut costs. Not surprising, Virgin Atlantic's Richard Branson took a dim view of the deal, which he said would create a "monster monopoly".

The announcement comes at a time when other airlines are also seeking to link up: United, Continental, Air Canada and Lufthansa are working on a transatlantic alliance, similar to the AA/Iberia/BA one announced today.

Read More