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Joined: Wed May 17, 2006 6:06 am
Posts: 3669
Location: Switzerland
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That's a lot to respond to because a lot of it is outside of AC's control. Higher taxes, long term airport leases charges are all passed on to the consumer. The same consumer who drives across the border to fly internationally.
As far as uncompetitive internationally, AC has an outstanding long haul business class product, easily on a par with British Airways. Coming from me, as a dedicated BA traveler that's saying a lot. AC, from a product and pricing perspective is every bit as good as many carriers.
In terms of uncompetitive international aviation system, many regions fall into that category. Europe with its arcane ATC fifedoms see controllers in Spain making hundreds of thousands, multiple layers of job protection in all ATC networks. The cost of which gets passed on. The Gulf makes all carriers uneasy. 20 years ago, aviation was in its infancy and they used it to their benefit. Their efficiency makes everyone look bad.
Canadian's have lots of option in Canada. But, it is cheaper south of the border. I have not done this, but it could be interesting to compare a net ticket price stripped of all charges and taxes, offered by carriers on both sides of the border.
In terms of Star and their ability to change with the times, they're actually ahead of all the alliances on many counts. I'll give you a good example of how good they are at keeping traffic in the family. A couple of years back, my Swiss flight from Bangkok to Zurich went mechanical. They immediately reprotected me on Austrian over Vienna. They could have also reprotected me on Singapore over Singapore, Thai direct to Zurich or over Frankfurt, Vienna, Singapore, Stockholm. They could have put me on SAS routing over Stockholm. Qatar or Emirates would have had to had me over to another carrier. The alliances have strong frequent flyer programs and cross marketing programs. AC benefits hugely from it, and Star alliance benefits hugely from have AC in the family.
Big full service airlines with a mix of short haul, long haul, regional, services have a hard time being all things to all markets. Low cost, full service, no service, business, etc is hard to pull off in one consistent package. And, being the biggest guy in Canada in a domestic market of really only two airlines, it becomes Canada's national punching bag.
I think the recent efforts to bring costs down are an attempt to address the very things you refer to. Lower costs enable them to offer lower prices, compete with the Qatar's and Emirates on price to international destinations. They have to change. They have to bring the costs down. That's not saying everyone is getting paid too much. I'm saying that as an international airline, they have to do everything they can to stop the transborder flying that consumers say is cheaper. How else could AC achieve that short of getting ongoing government subsidy? Yes, some of the top guys get paid way too much. But realistically, it's a handful. The popular notion that directors and below are making millions, is fantasy. IT's AN AIRLINE. Airlines are notorious underpaying businesses.
The world continues to not be a level playing field. There is way too much capacity and it far exceeds demand. With that much capacity, how do you fill airplanes? You drop your price. It's very easy to fill an airplane. It's very challenging to make money.
With all of that said, Canada needs to allow AC to grow internationally. To negotiate good air service agreements that have provisions for designating more than one Canadian carrier, even if there is no current carrier to operate. Having that in place enables carriers to grow. And it's always critical to negotiate for a balanced agreement that benefits all sides. The frustration voiced by Gulf carriers reflects this very point. There's not much in it for Canada. Allowing it, enables the Gulf carriers to turn on the vacuum cleaner and suck all the traffic away. Yes consumers will win. But I, as a Canadian, want to see our industry get stronger. Strong means more jobs |
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