Jazz chops flights out of YHM

[Changes in Latitudes]

Meh...I still see no reason for panic or hysteria. Everyone's got to tighen the belts a little bit.

Regional airline Air Canada Jazz has begun to scale back its operations to tackle higher fuel costs, announcing plans to close its Hamilton operations at the end of July.

The move will affect 14 customer service agents.

"No other decisions involving Jazz services have been made or announced at this time," airline spokeswoman Manon Stuart said Wednesday, adding that employees can seek to bump into other locations as permitted in their collective agreement.

The move eliminates 10 daily flights between the Hamilton airport, which is west of Toronto, and airports in Ottawa and Montreal.

The cuts are expected to have a minimal impact on the airport, whose largest airline is WestJet, said Hamilton airport spokesman Steve Howse. And he said with 50 per cent lower costs than rival Pearson International Airport in Toronto, Hamilton is bound to be attractive to other carriers, Howse said.

"We've already had inquiries into picking up those routes," Howse said.

Air Canada CEO Montie Brewer said Wednesday that Jazz and the regular Air Canada carrier are both making reductions to deal with fuel prices, but they won't necessarily use the same strategy.

"It's a reduction for both companies," Brewer said at a Merrill Lynch transportation conference in New York. "It's not distributed exactly the same way."

News follows Air Canada decision to cut 2,000 jobs
Air Canada plans to cut 2,000 positions as it trims its overall capacity by seven per cent, with domestic capacity falling by two per cent and capacity to the United States by 13 per cent.

Jazz, which was spun off from the main airline as part of Jazz Air Income Fund, operates scheduled passenger service on behalf of Air Canada. About 73 per cent of Jazz's capacity is flown domestically, with the balance on routes to the United States.

"We have every expectation that Jazz will be negatively impacted by Air Canada's capacity cuts, but based on the guidance Air Canada has provided, the cuts to Jazz will not be that severe," Cameron Doerksen of the investment bank Versant Partners wrote in a report.

Doerksen said it's possible that not all of Jazz's fleet types will be impacted equally. The Bombardier turboprop Dash-8s and 75-seat CRJ fleet are more cost effective and may not suffer the same reduction in use.

'They're just doing the easy stuff now': analyst
But analyst Jacques Kavafian of Research Capital Corp. said Jazz can't help but endure some impact as Air Canada looks to reduce costs.

"They're just doing the easy stuff now, but over time, the next few months, they will look at all their cost aspects and Jazz will not escape," he said.

Under a capacity purchase agreement in force until 2015, Air Canada can reduce the number of flying hours it purchases from Jazz by 15 per cent .

David Newman of National Bank Financial said the airline may seek to end leases of CRJ100-200 jets that burn more fuel. Newman said that Jazz could also mitigate the financial impact with a hiring freeze, aircraft returns, lower maintenance expenses and more charter flying.

"While Air Canada's cuts are expected to be across the board and more focused on a reduction in frequencies, as opposed to eliminating routes, we believe that the most impacted routes at Jazz will be leisure routes and some U.S. business routes," Newman said.

Jazz stocks, which have fallen by about 21 per cent in the last three months, were down five cents to $6.15 Wednesday on the Toronto Stock Exchange.

[...]

...when the flights are full everytime I fly out of YHM as a passenger...this is a curious move...even for a peasant like me. Maybe if I buy a suit and a pencil, would it make more clear as to why AC/Jazz would be making such cuts?

During peak times....the flights ARE full.

[Hot Fuel]

Full seats isn't always the measure of profit and viability of a route or even a base. Whats the average yield of those full seats? Then how does that figure stack up against the costs of operating the routes and or the base?

Some will say just dump the dog flights and run the prime slots only. Problem there is that it only removes operating costs of those flights, they still have the fixed cost burdens to handle. At the end of the day they might be in a position were a simple reduction of capacity negates their ability to generate the revenue needed to cover the fixed and variable costs.

[Northern Skies]

I would wager that hamilton is cheap relative to other bases, they shouldn't want to lose the past decade's growth.

[freakonature]

CYKA. Jazz cut's over thirty flight's starting Monday through the end of July. That's sixty hour's of flying.

[TheCheez]

CYKA. Jazz cut's over thirty flight's starting Monday through the end of July. That's sixty hour's of flying.

Crap really? I have a flight booked for Aug there.

[Four1oh]

WJ dropped those routes first(not profitable), then Canjet got their asses handed to them on those routes and dropped them too... why would Jazz be any different?

[...]

Full seats isn't always the measure of profit and viability of a route or even a base. Whats the average yield of those full seats? Then how does that figure stack up against the costs of operating the routes and or the base?

Some will say just dump the dog flights and run the prime slots only. Problem there is that it only removes operating costs of those flights, they still have the fixed cost burdens to handle. At the end of the day they might be in a position were a simple reduction of capacity negates their ability to generate the revenue needed to cover the fixed and variable costs.

Your points you made about the logitics of cut backs have always been very well understood for this side of the screen. Its unfortunate given todays fuel prices...Hamilton again has been unable to be given a fair chance of growth. Its getting better as an alternative to the circus show of a bigger airport. Stanstead and Gatwick are prime examples of alternate airports to LHR...the same can be made here YYZ vs YHM...

On a different note...when the author of this thread makes the heading of "Jazz CHOPS...." is he refering to Portuguese-Canadian pilots working for Jazz will also see a layoff?

[. .]

The difference between something like Gatwick and Hamilton is immense in services offered. Hamilton refuses to make the airport into something passengers could even consider using. Didn't they promise westjet a bunch of improvements which never happened?

[neophyte]

I use the YHM-YUL service and the loads always seem quite good. 70% min. I heard a CSA say that the "company" is concerned about YHM competing with the rapid air out of YYZ. The general feeling of those in the lounge was disappointment.

I guess only time will tell if those who use the YHM service will continue to fly AC out of YYZ or some of the other options available.

Thanks for the good rides boys, all the best to all the staff affected.

Neo

[...]

The difference between something like Gatwick and Hamilton is immense in services offered. Hamilton refuses to make the airport into something passengers could even consider using. Didn't they promise westjet a bunch of improvements which never happened?

With 5 terminals in LHR...I highly suspect they would have an immense service program. Before most on here decided to become pilots or Navcanada professionals...YHM got caught a few times by the "Build it...and they will come" mistake. Companies like Nationair made wild plans to make YHM their hub for the LONG term...something we have ALL heard before by companies like oh....I don't know...say WESTJET. I fully support the YHm authorities to adopt the "synergetic" approach of "hey...were here and we are able...now get over here we're fab!"

Until then...YHm won't be caught again with their pants down by the gliter and bright lights of YYZ most companies fall for when the market gets the shakes.

[hazatude]

The difference between something like Gatwick and Hamilton is immense in services offered. Hamilton refuses to make the airport into something passengers could even consider using. Didn't they promise westjet a bunch of improvements which never happened?

With 5 terminals in LHR...I highly suspect they would have an immense service program. Before most on here decided to become pilots or Navcanada professionals...YHM got caught a few times by the "Build it...and they will come" mistake. Companies like Nationair made wild plans to make YHM their hub for the LONG term...something we have ALL heard before by companies like oh....I don't know...say WESTJET. I fully support the YHm authorities to adopt the "synergetic" approach of "hey...were here and we are able...now get over here we're fab!"

Until then...YHm won't be caught again with their pants down by the gliter and bright lights of YYZ most companies fall for when the market gets the shakes.

Tradeport has increased land lease rates 1000% (actual number there), since they took over operations from the region. They are in the habit of screwing over the little guy in order to give golden handshakes to the new, "airline-de-jour".

[. .]

The difference between something like Gatwick and Hamilton is immense in services offered. Hamilton refuses to make the airport into something passengers could even consider using. Didn't they promise westjet a bunch of improvements which never happened?

With 5 terminals in LHR...I highly suspect they would have an immense service program. Before most on here decided to become pilots or Navcanada professionals...YHM got caught a few times by the "Build it...and they will come" mistake. Companies like Nationair made wild plans to make YHM their hub for the LONG term...something we have ALL heard before by companies like oh....I don't know...say WESTJET. I fully support the YHm authorities to adopt the "synergetic" approach of "hey...were here and we are able...now get over here we're fab!"

Until then...YHm won't be caught again with their pants down by the gliter and bright lights of YYZ most companies fall for when the market gets the shakes.

WestJet WAS there, and was using Hamilton Massively. They built a massive multi million dollar hangar there, if that isn't a sign of intent what is? Hamilton didn't want to reinvest in the airport. It's a steaming pile of garbage there, I can see why airlines wouldn't want to use it. Even more so, with their "synergistic" approach of doing nothing while airlines are using the airport, I can see why other companies wouldn't want to take a chance.

[...]

WestJet WAS there, and was using Hamilton Massively. They built a massive multi million dollar hangar there, if that isn't a sign of intent what is? Hamilton didn't want to reinvest in the airport. It's a steaming pile of garbage there, I can see why airlines wouldn't want to use it. Even more so, with their "synergistic" approach of doing nothing while airlines are using the airport, I can see why other companies wouldn't want to take a chance.

....my dearest Endless...a pile of garbage....yer mighty tough from 65 kms away

I`m kinda hoping yer kidding about Westjet`s excuse to set up base here in YHM as a long term hub for them. It was a clever move to test the waters without the high cost of YYZ. I`m a huge fan of YYZ and have many memories frlying out of there. With Peterbough in the wings to get an airport...one wonders if the YHM board and Hamilton-Wentworth residents would yet again be shafted by the Government should they pull funding to look east of YYZ for another airport.

I gotta run here but let me say this.....One Mirabel in this country is enough. Although if I know suits.....and I DO....by raising landing fees and building new shiny buildings will bring the crowds. It`s kinda waiting in line to get into a new hot and happening night club....only thing is....it`s the same dull boring Toronto pretentious clients!

Much Love

IABD

[KAG]

Westjet WAS there? We are there, at least thats what my July sched says, got alot of YHM turns. I think you will see us picking up the slack that AC leaves behind... if there is money to be made that is.

[. .]

You don't build a multi million dollar to test the waters. They were fully established there and realized they couldn't continue there without some improvements to the airport. Walking out to the plane in a February freezing rain storm isn't anyones idea of fun.

[Four1oh]

You don't build a multi million dollar to test the waters. They were fully established there and realized they couldn't continue there without some improvements to the airport. Walking out to the plane in a February freezing rain storm isn't anyones idea of fun.

The YHM airport kept feeding WJ BS about the impending terminal upgrade... and it never happened. WJ finally had enough and for all intensive purposes, left. WJ has a history of not putting up with bad business partners, and YHM is just another example.

[. .]

For1oh,

Exactly! I'm tired of this Hamilton airport sob story. They had an absolutely fantastic chance to drag themselves out of the gutter and totally messed it up.

[hazatude]

Terminal expansion at YHM is happening right now. Looks like jetways but I'm not sure what they're doing. It's all under a veil of secrecy...ooooohhhhhh.

[R1830]

Booked a ticket the other day departing YHM in mid aug on Jazz. Phoned A/C and asked if it was going to be a problem with Jazz saying they are pulling out. They said all is normal, very perplexing.

[joco]

About YHM... do you know who runs the show there? You may say Tradeport. Fine, but who runs Tradeport? Are you ready? YVR Airport Authority.

From http://www.flyhi.ca "Vancouver Airport Services (YVRAS) is the sole owner of Tradeport International Corporation, which holds a 40 year lease with the City of Hamilton to develop, manage and operate the John C. Munro Hamilton International Airport."

While Tradeport was still privately owned, they were close to have a big terminal built, and financing was pending based on a large airline setting shop in YHM.

And here comes WJ as the golden kid. All fine, plans go ahead, design starts, but wait !!! AC is restructuring. What does WJ do? Jumps in T3 at YYZ with the hope that AC will never recover.

I guess neither WJ or AC came on top, but YHM lost again.

Here you have it.
Cheers,
joco

[neophyte]

Hey KAG,

You got all the YHM turns? I hate you, I bid high for it and only got one, serves me right.

Happy landings,

Neo

[Four1oh]

yes Joco, poor YHM. They had YEARS to just START construction. What happened is WJ decided enough is enough, and in order to be taken seriously as a national airline, they started to operate out of YYZ. YYZ would have happened anyway, BUT, WJ probably wouldn't have reduced so much flying if YHM had played ball. YYZ just made he effect worse, plus a certain female politician based in YHM and her screaming made matters seem worse than it was. WJ didn't 'pull out' of YHM, WJ is still there and going strong. We're just not doing the money losing routes there anymore, IE yhm-yul, yhm-yow. I was told by a reliable source not long after we pulled out that the biggest problem with YHM is it's mostly a connection city; very few people originated or terminated there.

[bmc]

Full seats isn't always the measure of profit and viability of a route or even a base. Whats the average yield of those full seats? Then how does that figure stack up against the costs of operating the routes and or the base?

Some will say just dump the dog flights and run the prime slots only. Problem there is that it only removes operating costs of those flights, they still have the fixed cost burdens to handle. At the end of the day they might be in a position were a simple reduction of capacity negates their ability to generate the revenue needed to cover the fixed and variable costs.

Well said.

I would also add the opportunity cost to deploying the equipment elsewhere.

[...]

For1oh,

Exactly! I'm tired of this Hamilton airport sob story. They had an absolutely fantastic chance to drag themselves out of the gutter and totally messed it up.

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