Flair in YYZ/YVR

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vrefplus5
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Flair in YYZ/YVR

#1 Post by vrefplus5 » Mon Sep 11, 2017 7:51 am

Can someone explain to me the business strategy of competing in Canada's two most heavily guarded markets? Honest question.

http://www.newswire.ca/news-releases/fl ... portal_CAP
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Re: Flair in YYZ/YVR

#2 Post by infiniteregulus » Mon Sep 11, 2017 9:33 am

Why not. If they offer a product that people want to buy, then do it where there's LOTS of people, not that I condone such a product. In competition, the heavy players may have to temporarily take losses, then it's a game of endurance. Let the battle begin!
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Re: Flair in YYZ/YVR

#3 Post by Panama Jack » Mon Sep 11, 2017 11:46 am

Heavily guarded, yes, but also high demand. If they are able to maintain lower operating costs and the Government does their part to ensure that the incumbents don't engage in predatory pricing, the strategy I would think is to stimulate traffic from getting people who would otherwise be unable to fly into airplane seats.
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Re: Flair in YYZ/YVR

#4 Post by rookiepilot » Mon Sep 11, 2017 12:19 pm

Panama Jack wrote:. ----- and the Government does their part to ensure that the incumbents don't engage in predatory pricing, the strategy I would think is to stimulate traffic from getting people who would otherwise be unable to fly into airplane seats.
And that is key. Canada, do you want a healthy, competitive environment, or not?
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Re: Flair in YYZ/YVR

#5 Post by Old fella » Mon Sep 11, 2017 12:36 pm

The big boys(AC,WJ and their underlings) are gonna pounce. Why, because this new entrant is playing in their back yard(YVR and YYZ), honestly did y'all expect anything different. Just saying.
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Re: Flair in YYZ/YVR

#6 Post by Diadem » Mon Sep 11, 2017 2:05 pm

rookiepilot wrote:
Panama Jack wrote:. ----- and the Government does their part to ensure that the incumbents don't engage in predatory pricing, the strategy I would think is to stimulate traffic from getting people who would otherwise be unable to fly into airplane seats.
And that is key. Canada, do you want a healthy, competitive environment, or not?
Wait a minute...If the airlines choose their own prices, that's "predatory pricing", and you'd rather have the government tell them how much they can charge for seats? Isn't that a lot like, I don't know, socialism?
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Re: Flair in YYZ/YVR

#7 Post by Donald » Mon Sep 11, 2017 2:33 pm

What is "healthy" and who gets to decide that?

I know given the choice of your current job, or the conditions that exist at Flair, what most scheduled jet airline pilots will choose.
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Re: Flair in YYZ/YVR

#8 Post by TheStig » Mon Sep 11, 2017 2:52 pm

vrefplus5 wrote:Can someone explain to me the business strategy of competing in Canada's two most heavily guarded markets? Honest question.

http://www.newswire.ca/news-releases/fl ... portal_CAP
How do you figure? YVR and YYZ have the largest number of operators flying to them in the country. Flying between the largest markets in the country is probably the surest way to skim the passengers looking for ultra-low cost travel. Everyone likes to think of the low cost market as targeting secondary markets, but aside from the fact outside of YXX and YHM they don't exist in Canada, the model has changed. Look at JetBlue and Virgin America, I certainly wouldn't describe JFK, BOS, SFO and LAX as secondary markets and yet they successfully hosted LCC's despite being hubs to legacy carriers.
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Re: Flair in YYZ/YVR

#9 Post by rookiepilot » Mon Sep 11, 2017 3:30 pm

Donald wrote:What is "healthy" and who gets to decide that?

I know given the choice of your current job, or the conditions that exist at Flair, what most scheduled jet airline pilots will choose.
OK, as a past case study, do you think AC should have been allowed supersede Porter in YTZ as the dominant carrier (they certainly tried hard enough, or at least to weaken their position)?

Isn't it better, overall for everyone, that Porter exists? Point being in that case, (I recognize it's not the same), AC had no interest in YTZ until Porter showed it viable. Then AC tried very hard to kill them off, basically, through legal avenues regarding YTZ slots. Key here to examine, is the motive.

If AC / WJ want to set pricing that benefits all, great. If its purpose is to BK Flair, with $99 flights say YYZ - YVR, thats clearly predatory and certainly the government should step in, in my view.

Competition is a good thing. Pay for pilots will take care of itself, and is adjusting upwards now.

Edit.

Seems AC wants it both ways, just saying. They fought tooth and nail for Toronto to intervene in their dispute over rights at YTZ, then went to court, then tried to tell everyone YTZ should be under YYZ airport authority's control. (Where presumably they are well connected). Went on and on. Porter is lucky that no one caved to the pressure. It's certainly an interesting story.
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Re: Flair in YYZ/YVR

#10 Post by infiniteregulus » Mon Sep 11, 2017 4:17 pm

I don't know, I'd rather predatory behaviour than have the government step in, once again, and dictate to the airlines how to run their business, which in turn will come back at us...and our paychecks...
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Re: Flair in YYZ/YVR

#11 Post by Old fella » Mon Sep 11, 2017 5:17 pm

Appears Canada Jetlines is back in the picture with a startup date being June 1st 2018...... the saga continues. Gotta ask where are the pilots gonna come from to support these LCCs aka WJ since the intent is low wages.....

https://beta.theglobeandmail.com/report ... e36227392/
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Re: Flair in YYZ/YVR

#12 Post by TheStig » Mon Sep 11, 2017 5:23 pm

rookiepilot wrote:OK, as a past case study, do you think AC should have been allowed supersede Porter in YTZ as the dominant carrier (they certainly tried hard enough, or at least to weaken their position)?
So you're okay with a privately held company holding a near monopoly over an infrastructure that belongs to Canadians?
rookiepilot wrote: If AC / WJ want to set pricing that benefits all, great. If its purpose is to BK Flair, with $99 flights say YYZ - YVR, thats clearly predatory and certainly the government should step in, in my view.
Rookiepilot, you've discussed your business credentials here, so let's look at things from that angle.

AC offers 15 flights a day from YYZ-YVR, and WJ 8-10, that roughly 26,000 seats/ week for AC and 10,000 for WJ. Now Flair is offering 4 flights a week!? If you we running either airline, how much would you be willing to hurt your own bottom line on this market? Should they slash all their prices 30%? 50%? To try and snare the maximum 600 passengers a week Flare is trying to attract? It isn't worth it for WJ and AC to chase to lowest fare hunting passengers all the way down, not to mention drive down their premium paying revenue passenger fares for less than 2% of low end of the market.

Flair will drive itself out of business, because there are too many fees and taxes in this country for an ULCC to generate new market share. Neither WJ or AC are vulnerable right now like AC was when WJ started or the American legacies were as Frontier, Virgin, JetBlue, and Spirit found their niche. Believe it or not both carriers have reduced their costs dramatically. I can't imagine any way that Flare could operate a B737-500 YVR-YLW cheaper than a WJ encore Q400. Neither airline is going to be in a position where they'll have to decide to give up massive amounts market share or take a major loss (such as Easyjet and Ryanair have inflicted on KLM, AF, BA et al in Europe).

Even at $99 fares (which would include the $25 AIF, $15 security fee, and $12 HST, or over half the ticket price) Flair wont be able to fill their aircraft during off peak times, it's just the nature of the business and their low revenues from peak periods wont carry them far. They're going to fly old aircraft too much with no spares to cover flights when mechanical issues arise, that's when things get really expensive and people get angry. I hope that passengers who do book with them have credit card coverage and they decide to close their doors during a slow period of the years so passengers can find seats to get to where they're going.
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Re: Flair in YYZ/YVR

#13 Post by Diadem » Mon Sep 11, 2017 5:47 pm

If this were any other industry, and one business had lower prices than another, no one would be talking about "predatory pricing"; Wal-Mart has lower prices because of supply chains and efficiencies, so should the government step in to protect small, family-owned stores? Or should the laws of the free market be allowed to act?
I just find it rather hypocritical of one of the most fervent opponents of government intervention in the economy on this board wanting that same government to intervene to protect something in which he has an interest. It's amazing how quickly those free market advocates want subsidies and protectionism when it's to their benefit.
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Re: Flair in YYZ/YVR

#14 Post by rookiepilot » Mon Sep 11, 2017 5:57 pm

Stig,

Looking at the history, you're probably correct on Flair.

My point is, and applying to all types of Canadian industry, that conditions be facilitated, so that small niche competitors are able to fairly attempt a start up. Let's see what happens.

On Porter, it's simple.

AC had zero interest in YTZ for many years. Porter invested the dough, took the risk, and built a thriving base there for their business, with no guarantee anyone was even interested in flying from there. Why should any of that be given away, meaning the slots to AC, after Porter did the hard work building the traffic base from YTZ?

The TPA rightly has told AC to get stuffed with its demands to do so. No brainer to me. They had some slots given to them anyway, when the total number expanded, so AC does have a presence there.
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Re: Flair in YYZ/YVR

#15 Post by rookiepilot » Mon Sep 11, 2017 6:04 pm

Diadem wrote:If this were any other industry, and one business had lower prices than another, no one would be talking about "predatory pricing"; Wal-Mart has lower prices because of supply chains and efficiencies, so should the government step in to protect small, family-owned stores? Or should the laws of the free market be allowed to act?
I just find it rather hypocritical of one of the most fervent opponents of government intervention in the economy on this board wanting that same government to intervene to protect something in which he has an interest. It's amazing how quickly those free market advocates want subsidies and protectionism when it's to their benefit.
Hello? I'm not in the aviation industry in any way, shape or form. I have zero interest in Flair or any other airline. As far as I'm concerned, they are a horrible business to invest in. Why would you assume that? :roll:

I don't have a bias, except towards common sense and free enterprise, and seeing small business thrive. That doesn't happen when governments allow monopolies or near monopolies.

BTW on Walmart, there are many, many examples of towns where Walmart wasn't allowed to build, for the good of the community. And I think often that's a positive, too.
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Re: Flair in YYZ/YVR

#16 Post by Diadem » Tue Sep 12, 2017 8:08 am

rookiepilot wrote:Hello? I'm not in the aviation industry in any way, shape or form. I have zero interest in Flair or any other airline. As far as I'm concerned, they are a horrible business to invest in. Why would you assume that? :roll:

I don't have a bias, except towards common sense and free enterprise, and seeing small business thrive. That doesn't happen when governments allow monopolies or near monopolies.

BTW on Walmart, there are many, many examples of towns where Walmart wasn't allowed to build, for the good of the community. And I think often that's a positive, too.
But there isn't a monopoly, and having the government intervene on behalf of one airline would be the exact opposite of "free enterprise". WestJet and Air Canada aren't preventing Flair from operating into those cities, and what you're asking of the government is that they set price controls for those companies to protect Flair from competition. That's not a far step from the old days of regulation of the airline industry, where the government chose what routes companies could fly and how much they could charge for tickets. I doubt that would stand up in court either, as it would obviously be singling out one company for preferential treatment. As far as I can tell, you're some kind of business owner, so would you be happy about the government stepping in to tell you how much you can charge your customers in order to protect your competitors?
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Re: Flair in YYZ/YVR

#17 Post by loopa » Tue Sep 12, 2017 9:06 am

TheStig wrote:
rookiepilot wrote:OK, as a past case study, do you think AC should have been allowed supersede Porter in YTZ as the dominant carrier (they certainly tried hard enough, or at least to weaken their position)?
So you're okay with a privately held company holding a near monopoly over an infrastructure that belongs to Canadians?
rookiepilot wrote: If AC / WJ want to set pricing that benefits all, great. If its purpose is to BK Flair, with $99 flights say YYZ - YVR, thats clearly predatory and certainly the government should step in, in my view.
Rookiepilot, you've discussed your business credentials here, so let's look at things from that angle.

AC offers 15 flights a day from YYZ-YVR, and WJ 8-10, that roughly 26,000 seats/ week for AC and 10,000 for WJ. Now Flair is offering 4 flights a week!? If you we running either airline, how much would you be willing to hurt your own bottom line on this market? Should they slash all their prices 30%? 50%? To try and snare the maximum 600 passengers a week Flare is trying to attract? It isn't worth it for WJ and AC to chase to lowest fare hunting passengers all the way down, not to mention drive down their premium paying revenue passenger fares for less than 2% of low end of the market.

Flair will drive itself out of business, because there are too many fees and taxes in this country for an ULCC to generate new market share. Neither WJ or AC are vulnerable right now like AC was when WJ started or the American legacies were as Frontier, Virgin, JetBlue, and Spirit found their niche. Believe it or not both carriers have reduced their costs dramatically. I can't imagine any way that Flare could operate a B737-500 YVR-YLW cheaper than a WJ encore Q400. Neither airline is going to be in a position where they'll have to decide to give up massive amounts market share or take a major loss (such as Easyjet and Ryanair have inflicted on KLM, AF, BA et al in Europe).

Even at $99 fares (which would include the $25 AIF, $15 security fee, and $12 HST, or over half the ticket price) Flair wont be able to fill their aircraft during off peak times, it's just the nature of the business and their low revenues from peak periods wont carry them far. They're going to fly old aircraft too much with no spares to cover flights when mechanical issues arise, that's when things get really expensive and people get angry. I hope that passengers who do book with them have credit card coverage and they decide to close their doors during a slow period of the years so passengers can find seats to get to where they're going.
I certainly think you're onto something here Stig. But have you considered that Flair is in an advantageous spot given their ACMI, Adhoc Charter, and Oilsands business to offset low times of the scheduled air service?

I don't see flair expanding quickly. I see a very methodical process. They will likely keep their head in the international charter game as they have for the last 12 years as a method to streamline the financial hurt that is associated with the ups and downs of being a brand new airline in a cut throat industry. And the money made from one charter goes over and beyond anything made by the big boys on any run.

I have a hard time seeing Flair fail out as clearly as you see it Stig. But I could be wrong.
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Re: Flair in YYZ/YVR

#18 Post by yycinformer » Tue Sep 12, 2017 2:16 pm

TheStig wrote:Everyone likes to think of the low cost market as targeting secondary markets, but aside from the fact outside of YXX and YHM they don't exist in Canada, the model has changed.
Very true, however, it seems the folks at YQF might have found a way to interject themselves as a secondary market. They're equidistant from YEG and YYC which gives them a health catchment area across central Alberta for potential airlines to work with. And they've already extended their runway with further airport expansion in the works.
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Re: Flair in YYZ/YVR

#19 Post by rookiepilot » Tue Sep 12, 2017 2:46 pm

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Re: Flair in YYZ/YVR

#20 Post by Old fella » Tue Sep 12, 2017 4:23 pm

loopa wrote:
TheStig wrote:
rookiepilot wrote:OK, as a past case study, do you think AC should have been allowed supersede Porter in YTZ as the dominant carrier (they certainly tried hard enough, or at least to weaken their position)?
So you're okay with a privately held company holding a near monopoly over an infrastructure that belongs to Canadians?
rookiepilot wrote: If AC / WJ want to set pricing that benefits all, great. If its purpose is to BK Flair, with $99 flights say YYZ - YVR, thats clearly predatory and certainly the government should step in, in my view.
Rookiepilot, you've discussed your business credentials here, so let's look at things from that angle.

AC offers 15 flights a day from YYZ-YVR, and WJ 8-10, that roughly 26,000 seats/ week for AC and 10,000 for WJ. Now Flair is offering 4 flights a week!? If you we running either airline, how much would you be willing to hurt your own bottom line on this market? Should they slash all their prices 30%? 50%? To try and snare the maximum 600 passengers a week Flare is trying to attract? It isn't worth it for WJ and AC to chase to lowest fare hunting passengers all the way down, not to mention drive down their premium paying revenue passenger fares for less than 2% of low end of the market.

Flair will drive itself out of business, because there are too many fees and taxes in this country for an ULCC to generate new market share. Neither WJ or AC are vulnerable right now like AC was when WJ started or the American legacies were as Frontier, Virgin, JetBlue, and Spirit found their niche. Believe it or not both carriers have reduced their costs dramatically. I can't imagine any way that Flare could operate a B737-500 YVR-YLW cheaper than a WJ encore Q400. Neither airline is going to be in a position where they'll have to decide to give up massive amounts market share or take a major loss (such as Easyjet and Ryanair have inflicted on KLM, AF, BA et al in Europe).

Even at $99 fares (which would include the $25 AIF, $15 security fee, and $12 HST, or over half the ticket price) Flair wont be able to fill their aircraft during off peak times, it's just the nature of the business and their low revenues from peak periods wont carry them far. They're going to fly old aircraft too much with no spares to cover flights when mechanical issues arise, that's when things get really expensive and people get angry. I hope that passengers who do book with them have credit card coverage and they decide to close their doors during a slow period of the years so passengers can find seats to get to where they're going.
I certainly think you're onto something here Stig. But have you considered that Flair is in an advantageous spot given their ACMI, Adhoc Charter, and Oilsands business to offset low times of the scheduled air service?

I don't see flair expanding quickly. I see a very methodical process. They will likely keep their head in the international charter game as they have for the last 12 years as a method to streamline the financial hurt that is associated with the ups and downs of being a brand new airline in a cut throat industry. And the money made from one charter goes over and beyond anything made by the big boys on any run.

I have a hard time seeing Flair fail out as clearly as you see it Stig. But I could be wrong.
Well there is precedent for failure........ look no further than CanJet and their many versions
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