canadian north announcement.

[jet a1]

CANADIAN NORTH ANNOUNCES CHANGES TO SERVICE.
Airline to focus on profitability, northern service mandate.
Yellowknife, NT
For release Thursday, September 24.09
In response to an ongoing struggling economy, an unprecedented surplus of
seats on southern routes and underperformance on others, Canadian North is
taking proactive steps to sharpen the Airline’s focus on its founding mandate of
serving northern transportation needs while ensuring a profit for its shareholders.
According to Canadian North’s President Tracy Medve, “These are demanding
times and we are taking the steps necessary to address these challenges in line
with our mandate to provide essential air services to the people and communities
of the North. That being said, we can no longer justify competing at current levels
on routes characterized by an oversupply of seats and a price structure that
compromises our commitment in other areas. Neither can we continue to provide
service to areas that have not met our market expectations.”
Changes to Canadian North’s service include the cancellation of scheduled
flights to Hay River, effective October 25, 2009 and to Calgary effective October
10, 2009. Some adjustments to Edmonton/Yellowknife scheduled passenger
service will also take effect October 25, 2009.
All customers impacted by the cancellation or change of service will be
reaccommodated or have their tickets refunded. Any customer queries
concerning changes can be directed to the Canadian North call centre at
1-800-661-1505 or their travel agent.
Operational and administrative staff reductions will be made in Yellowknife; Hay
River; Calgary and Edmonton.
The current schedule adjustments will ensure the Airline’s continued growth and
profitability with the least possible compromise to the services it provides. These
changes will allow for a strategic redeployment of aircraft assets to take
advantage of other market opportunities.

[Kosiw]

Just wait until Wetjet jumps into the YOW-YFB route....

Also CDN North expanded pretty fast over the past 2-3 years, adding to their $$ troubles is that expensive shiny new hangar in YFB...and what are they running on Baffin 2 Dash 8's vs First Air's 4-5 ATR's + the 748...

Anyways the in-flight service on both CDN North and First Air is excellent....support your local airlines....not those out to skim the traffic and are not part of the local economy or communities...

[C-FABH]

support your local airlines....not those out to skim the traffic and are not part of the local economy or communities...

You couldn't possibly be referring to those same "local" airlines that hose their passengers on ticket prices? Competition isn't always a bad thing.

[Changes in Latitudes]

support your local airlines....not those out to skim the traffic and are not part of the local economy or communities...

You couldn't possibly be referring to those same "local" airlines that hose their passengers on ticket prices? Competition isn't always a bad thing.

By "hose" you must mean "not take a gigantic loss in order to cut other companies completely out of the picture". Or by "hose" did you mean "provide a quality service to difficult destinations and charge a fair price"? But I'm listening, what's a fair price for such a service?

Since you seem to be such a tycoon, let's start what you would call a "competitive" airline and do just that. Let's charge minuscule rates, give the lowest possible level of service and cut all of our competitors out of the equation. We can pass our losses on to our employees and cut every corner imaginable just to provide a 50 dollar ticket to Baffin Island (which is such a high capacity run to begin with). What's wrong with a little healthy competition? Give your head a shake and try again. Why, we could park all of our planes next to those lovely ones with the green smiley faces in the desert.

[C-FABH]

Let's charge minuscule rates, give the lowest possible level of service and cut all of our competitors out of the equation. We can pass our losses on to our employees and cut every corner imaginable just to provide a 50 dollar ticket to Baffin Island (which is such a high capacity run to begin with). What's wrong with a little healthy competition? Give your head a shake and try again. Why, we could park all of our planes next to those lovely ones with the green smiley faces in the desert.

Do you believe that WestJet has accomplished any of the above since their inception of flights to YZF?

[bmc]

support your local airlines....not those out to skim the traffic and are not part of the local economy or communities...

You couldn't possibly be referring to those same "local" airlines that hose their passengers on ticket prices? Competition isn't always a bad thing.

By "hose" you must mean "not take a gigantic loss in order to cut other companies completely out of the picture". Or by "hose" did you mean "provide a quality service to difficult destinations and charge a fair price"? But I'm listening, what's a fair price for such a service?

.

I don't think WJ is taking a gigantic loss on their routes. They, like any other airline, will pull off routes if they don't make money. They will readily deploy their assets where they can make more money.

Don't believe advertised prices. It's the oldest trick in the book for getting attention. From what I've seen on all carrier websites, there is pricing parity. Most recently, this week, Canadian North and First Air were cheaper than Westjet. Were they acting irresponsibly? Maybe they had to charge less because their passengers chose to fly on Westjet? I honestly don't know.

Define "quality service" as seen from your paying customer? A fair price in airline terms is one that is bought by a paying passenger, not one that is offered and never sold. A fair price from an operators point of view is one where you can satisfy demand and offer a range of prices with your inventory, and the flight goes out with one empty seat. That one empty seat reflects proper yield management indicating that you are holding back inventory for the last minute passenger that's prepared to pay a very high price.

The perception of high airfares in the north goes back a long long long time. Back in the days of Transair, PWA and Nordair. The minute First Air started flying old 727-100's, passengers walked across the ramp. Nordair were the bad guys because they charges too much. Canadian pull of of YFB and all of a sudden 7F are the bad guys. And it will go round and round and round.

Northern flying is very profitable. I know that. I know it first hand and intimately. New entrants introduce a strange dynamic that has to do with how to deal with your customer base. The simple truth is that new entrants to northern markets do not necessarily grow the market. They add excess capacity that everyone takes a yield hit to try and fill. The lowest cost operator stands to gain the most. To the general public, however, he new entrant is perceived to be the hero by lowering airfares and making the dedicated northern carrier look like bandits raping them of $$$$.

Winning this is not going to be easy. History has shown that over time, a carrier is going to drop off a route. When that happens, the remaining carriers see load factors go up and airfares move in the same direction.

I wish I had the remedy to pass on. But don't for a minute start believing that WJ is filling airplanes at $55 a seat. They aren't. They just aren't. Revenue management is at play. Some will go for cheap and a lot will go for more. My daughter bought a round trip ticket on Ryanair between Oslo and Dublin for CAD30 return tax in. She flew on a new B737-800. Ryanair is THE most profitable airline in Europe. Do you really think the who two hour one journey was sold for $15 less taxes? Give it a shake.

I'd be more pissed off at my customers than at Westjet. They are not loyal. They are less impressed with filet mignon than you think they are.

[Changes in Latitudes]

Let's charge minuscule rates, give the lowest possible level of service and cut all of our competitors out of the equation. We can pass our losses on to our employees and cut every corner imaginable just to provide a 50 dollar ticket to Baffin Island (which is such a high capacity run to begin with). What's wrong with a little healthy competition? Give your head a shake and try again. Why, we could park all of our planes next to those lovely ones with the green smiley faces in the desert.

Do you believe that WestJet has accomplished any of the above since their inception of flights to YZF?

They sure haven't emptied the competition's airplanes (as far as 7f goes), either. You believe what you will, the airlines that serve the north are there for a reason and its not to skim a few plane loads here or there. Westjet is a different entity all together, I just threw out the hypothetical scenario to provide the budget tickets you so dearly desire.

Like BMC stated, Westjet is not offering a huge discount over any of the others, and yes, from my experience, there is near parity on the prices.

[Donald]

(be)low cost care for travel YZF-YEG......check

lowest possible level of service.....check

cut out competitors.....check (starting with 5T's reduction and most likely more announcements from others)

pass losses to employees......without seeing how much they are losing on this run combined with how much they profit on other runs, this one is difficult to say


Fact: WJ load is on average 80-90 pax in one direction twice a week, otherwise it is 40-50 pax each way. Over a 7-day period this is roughly a load factor of 41%.

[EastCoaster]

I do.

Northern Airlines are owned by the people of the North, from the James Bay Coast to the Beaufort Sea and were bought and built to serve the people of the North with a level of service not seen in Central Canada since the last Wardair flight passed through. The shareholders have mandated a safe service with modern aircraft into communities of the North with populations of sometimes as little as 500 people. Providing this service as a whole, costs significantly more than what any "southern" carrier spends. Another mandate of both Northern Airlines is to give back to the communities in which they do business. When asked about what Westjet does for the communities it serves, their media relations fellow commented that they provide thousands of free tickets to Westjet destinations to community groups. Am I the only one that's wondering where the thousands of dollars (the currency we deal in here in the North) are going to come from to support everything from Concerts and Festivals, to Community Groups, Homeless Shelters, Sports programs, and School Playground Equipment Purchase, just to name a few. I have always been a big fan of Westjet and their "little engine that could" way of doing business but the truth is beginning to show. They care little about the casualties in their war with Air Canada.
Canadian North has laid off staff in Hay River and expects to lay off people in Yellowknife. These are Northern jobs. They pay good wages, offer complete benefits packages, and the chance to work in the industry we all love in a beautiful place. It's a sad day in Northern Canada when good people that are paid good wages are out of work. At Avcanada, the revolving theme is all about getting fair pay and benefits packages, working for reputable operators where safety is paramount, we continue to harp about the second tier operators paying poor wages and offering little in stability. We have the opposite here in the North. Good companies, run by good people. Great benefits, there's always room for improvement, but you'd be hard pressed to find a Canadian North or First Air employee that isn't comfortably compensated for their efforts.
Either way, this is a sad day. Westjet's mandate when coming to Yellowknife was to "stimulate local tourism" and "provide airfare at rates the rest of Canada has long since enjoyed". Well done, we now have an extra thousand seats per week available on a run that already had a thirty percent over capacity. The hotels were already mostly full during the "tourist" season. The one benefit was the lowering of airfares, but a quick check online will show that in most cases, Westjet is now offering a base fare of approximately three hundred dollars one way, depending on if the sale says 70% off base fare or 50% off the base fare. So, in reality, can we expect the seat sales to gradually get farther and farther apart, and the prices to be right back where they were prior to Westjet's foray into the Edmonton to Yellowknife corridor?
I ask all the members of Avcanada and the general public to support the "Northern" Airlines in our battle to save our jobs by flying on our flights when you commute throughout the North. Put your money where your mouth is, support the airlines that provide safe, good paying jobs to aviation people. I'm not saying the other carriers don't do this, but just that as casualties in the ongoing market share war between Air Canada and Westjet, we ask for your continued support.

Thanks for your support.

EC

[CanadaEH]

Northern Airlines are owned by the people of the North

Call me uneducated, but who exactly "owns" the airlines? The bands? Investors? Joe and Marie at the Corner Store?

The shareholders have mandated a safe service with modern aircraft into communities of the North with populations of sometimes as little as 500 people.

Is a 737-200 combi a "modern" aircraft? I'm pretty sure Westjet didn't retire a 737-200 with the highest cycles of any 737 in the world because it was modern..

Another mandate of both Northern Airlines is to give back to the communities in which they do business.

Wow that's quite the mandate. I suppose the thousands of free flights AC & WS provide to hundreds of charities across the country pale in comparison, right?

I have always been a big fan of Westjet and their "little engine that could" way of doing business but the truth is beginning to show. They care little about the casualties in their war with Air Canada.

What truth? That's a pretty empty statement.

You're whining about airfares is also weak. Westjet has a monopoly in YXX, YQQ, and YHM. Is Westjet raping and pillagint those cities? Nope. In fact, the pricing practices of Westjet are pretty standard right across the board. There are routes which are more price sensitive than others but that's a reflection of competition.

Anyway, good luck with that "support your local airline" stuff. That sounds all warm and fuzzy but money talks.

[C-FABH]

You believe what you will, the airlines that serve the north are there for a reason and its not to skim a few plane loads here or there. Westjet is a different entity all together, I just threw out the hypothetical scenario to provide the budget tickets you so dearly desire.

I interlined with Canadian North from YEG to YVQ for about $35. Their service was also great, compared to what is expected on most airlines in North America. Don't take it personally, I'm not on a crusade for bargain basement pricing, and I'm not expecting another Jetsgo. But to say there isn't some room for price leverage is a bit OTT.

The shareholders have mandated a safe service with modern aircraft into communities of the North with populations of sometimes as little as 500 people. Providing this service as a whole, costs significantly more than what any "southern" carrier spends. Another mandate of both Northern Airlines is to give back to the communities in which they do business.

I'd like to see the shareholders at First Air that decided on management wages and bonuses. Cause it sure as hell wasn't them. Wouldn't mind earning myself a cool extra $600,000.

I suppose the thousands of free flights AC & WS provide to hundreds of charities across the country pale in comparison, right?

Great point. AC has quite a few community initiatives, Kids' Horizons, Dreams Take Flight...

[FICU]

Call me uneducated, but who exactly "owns" the airlines? The bands? Investors? Joe and Marie at the Corner Store?

Inuvialuit of the NWT and Inuit of Nunavut are the shareholders... your average local people of the north.

Is a 737-200 combi a "modern" aircraft? I'm pretty sure Westjet didn't retire a 737-200 with the highest cycles of any 737 in the world because it was modern.

You really have to state this? I'm sure even Westjet, who are the smartest airline people around right, can't figure out how to get a 737NG onto a gravel runway in Cambridge Bay.

Wow that's quite the mandate. I suppose the thousands of free flights AC & WS provide to hundreds of charities across the country pale in comparison, right?

How many free flights does WJ offer to folks in Clyde River or Pond Inlet or Tuk? How many concerts/festivals, sports teams and events, arts events, and general community programs does Westjet support in the NWT and Nunavut?

Westjet cares about one thing... beating Air Canada in all their domestic markets without regard for collateral damage or the impact on anyone else.

[double-j]

Well according to the comments from the cbc article, it seems that 'northerners' are sick and tired of paying those huge sums of money for a sixty-five minute flight.

I've lived in Kuujjuaq, Arviat, Iqaluit and Gjoa Haven for over 20 years. All these communities were "served" by Canadian North and/or First Air. In so many years with a large family, I could never afford to go anywhere on holidays to visit family, whether in the South or elsewhere in the Arctic, due to the prohibitive costs to fly there. Cargo was the same deal, we couldn't afford it, simply. These so-called Northern airlines have gouged Northerners, while pretending to be good corporate citizens and investing a few crumbs in sponsorship. That's plain and simple BS. I'm just so glad Jazz and WestJet are flying to Yellowknife.

lease send west jet and jass to the eastern arctic asap..it costs me 3000 dollars to get out of here..canaidian north has failed to monpolize the north and are silly for thinking they would never receive cmopetition from southern companie's..they knew it was coming but failed to prepare...

"It's about time other companies come to the North. Northerners are paying too much for flights to NWT and Yukon where it is cheaper to fly internationally than to fly to Northern Canada, so I say, BRING ON THE COMPETITION! WE NEED IT! Maybe more people would come if the prices were reasonable!"

"...competitors who don't share our commitment to the North."

That's right, If Canadian North had their way, we'd still be paying $1800 for the 65 min flight Yellowknife->Edmonton.

Well well well... The gouging is over. Canadian Airlines is taking the last gasp of the northerners hard earned dollar. It was always said that if the prices were lower more people would use the service and the planes would always be full. To bad Canadian couldn't or didn't want to listen. Don't start your belly achin' now. One didn't need a crystal ball to see this future.
Good bye Canadian.

IMO, if you have to charge an outrageous fee on one route to subsidize another, you have two choices..

A. cancel the unprofitable route.

B. approach the government to subsidize the 'essential' nothern route.

I too would be a little po'ed that I have to pay an insane amount to fly yzf-yeg to subsidize a northern route (which are equally priced insane)

BTW, I don't really buy that subsidy story anyway. I just think that they do not have their costs in control and have been getting away with it until now.

jj

[FICU]

Well according to the comments from the cbc article, it seems that 'northerners' are sick and tired of paying those huge sums of money for a sixty-five minute flight.

I don't think that particular "northerner" has flown from YEG to YZF because if they had they would know the flight is much longer than 1 hour and 5 minutes and I'm sure you could find as many quotes from people who support the northern airlines. If they are being gouged then all airlines who operate in the north must be in a joint gouging mission to screw these people because all airlines except WJ charge a lot of money to fly in northern Canada.

Gee... could there actually be a necessity for the higher prices?

[double-j]

You have operated in a duopoly for too long and the northerners are wise to it.

1800 for a flight yzf-yeg is robbery no matter how you slice it.

How about giving back to the northerners by offering more sensible pricing, rather than folk-music festivals?

You expanded too quickly, and the oil patch has slowed. Do not put it on the backs of the northerners.

jj

ps. To the dude who compared 5T to wardair...that didn't include the charter side I'm sure!

[young grasshopper]

CanadaEH wrote:

Is a 737-200 combi a "modern" aircraft? I'm pretty sure Westjet didn't retire a 737-200 with the highest cycles of any 737 in the world because it was modern..

I'm pretty sure they weren't trying to call the 'ole 737 "modern". Last time I checked the 737-200 doesn't fly to Uluhaktok (Holman), Gjoa Haven, Taloyoak (Spence), Igloolik, Pang, and Dorset. For places like this, 7F sends a more "Modern" aircraft, the ATR-42.

[FICU]

1800 for a flight yzf-yeg is robbery no matter how you slice it.

How about giving back to the northerners by offering more sensible pricing, rather than folk-music festivals?

You expanded too quickly, and the oil patch has slowed. Do not put it on the backs of the northerners.

ps. To the dude who compared 5T to wardair...that didn't include the charter side I'm sure!

Are you sure it was $1800?

I'm sure you are a bright guy/gal... as an airline, the fewer the people you fly the more you have to charge in order to make a profit. Northern airlines don't have the exposure to a high volume of customers so they have to charge more money... it's simple economics. This why you see all northern airlines, 5T, 7F, Air North, Calm Air, Keewatin Air, Air Inuit, Northwright, Aklak, Borek, Air Nunavut... need I go on? ... charge a lot of money to fly people to, from, and within northern Canada. By " a lot of money" I am talking way more than what a southern airline charges to fly people the same distance in southern Canada.

Why don't you go save the people of Churchill from the gouging they are taking by northern airlines since you think they are being ripped off.

Expanded too quickly? The only expansion of the sked service has been with the -8s and they are doing very well in the markets they serve.

Have you flown on a 5T charter with full service?

[FICU]

I'm pretty sure they weren't trying to call the 'ole 737 "modern". Last time I checked the 737-200 doesn't fly to Uluhaktok (Holman), Gjoa Haven, Taloyoak (Spence), Igloolik, Pang, and Dorset. For places like this, 7F sends a more "Modern" aircraft, the ATR-42.

Maybe you should do some reading before commenting here. 737-200s don't fly into the above mentioned airports because the runways are too short.

[young grasshopper]

FICU wrote:

Maybe you should do some reading before commenting here. 737-200s don't fly into the above mentioned airports because the runways are too short.

Wow - good one. I fly to these places every day. Its called sarcasm.
(the sort of sarcasm you used when you wrote):

How many free flights does WJ offer to folks in Clyde River or Pond Inlet or Tuk?

Next time I'm being sarcastic, I'll write it in brackets for you.

[synthpro]

The money gauging does not end with First Air...

Air Inuit charges $2400 for a round trip to Montreal from one of the Northern communities. The Inuit people are outraged there too. I would Love to see Jazz or Westjet come and takeover that Montreal-Kuujjuaq-Iqaluit sked that first Air has had for so long.

Also, I know for a fact that the board members of Makivik are completely corrupted and pocket so much of the profits made by Air Inuit or First Air. There are so many scandels within this group. The overal operation is handled very poorly and there is so much waist in money you have no idea.

[FICU]

Wow - good one. I fly to these places every day. Its called sarcasm.
(the sort of sarcasm you used when you wrote)

I wasn't being sarcastic... it seems many WJ folks who think we all should be running new NGs have no idea on why northern Boeing operators are running -200s.

Here's more food for thought to those who think northerners are being ripped off by having to pay higher airfare then those in the south...

I was reading an article that stated the average annual family income in YZF is around 120K. In Edmonton it is around 60K. How much of the YZFers income is from the northern living allowance and other nothern tax breaks? grasshopper, maybe you can answer that. I bet it is upwards of 10-15K. So, now YZF has a Walmart and air "Walmart", er Westjet, providing them service. So they not only want the cheaper cost of living in the south but they also want the government handouts.

The northern living allowance is there to subsidise living expenses like air travel so should they be complaining when they are receiving higher "northern" salaries and thousands of taxpayer dollars in subsidies?

[C-FABH]

So, now YZF has a Walmart and air "Walmart", er Westjet, providing them service

You realize that Air Canada and WestJet fares are virtually identical these days? WestJet isn't really an LCC anymore, it's just the public perception.

[FICU]

So, now YZF has a Walmart and air "Walmart", er Westjet, providing them service

You realize that Air Canada and WestJet fares are virtually identical these days? WestJet isn't really an LCC anymore, it's just the public perception.

AC fares are lower beause of WJ... and WJ still proudly calls themselves a LCC.

[young grasshopper]

FICU,

I think we're on the same page...folks up here want the best of both worlds. Its a shame that nobody is making any real money, but I suppose thats what competition is all about. Although 4 carriers provide service to a city of 20,000 brings great fares for the general population, nobody wins in the end. Hopefully in the end everyone will still end up with a job and make a decent living. Cheers.

PS - Northern living allowances vary greatly as you stated. I think on average people make around $6-8,000 in YZF...but the farther north you go, the more it can end up being. I doubt we'll still get a Northern Living Allowance once the Mackenzie Bridge is completed...

Jeff

[double-j]

my wife flew you guys twice a week from yyc-ymm for two years on the long lake project. I think she called your service "indifferent."

As a seasoned flier I respect her opinion.

Don't even get me started on the lap-joint inspections while the aircraft was boarded or the corn-broom deice in yyc!

You like to rag on westjet as being walmart but you guys are truly bush.

jj