The Canadian market has for a long time been dominated by two incumbent players, but significant industry developments are going to change the competitive state of play.
Ambitious ULCC start ups are beginning to make their mark, new partnership arrangements such as the Delta and WestJet JV are set to challenge Air Canada’s share of sixth freedom traffic, and WestJet’s entry into the low cost long haul market is injecting some much needed dynamism to the market.
The CAPA Canada Aviation Summit, the latest addition to the CAPA – Centre for Aviation calendar of global events, has this week attempted to tap into the latest industry issues and developments, challenging leaders of the Canadian aviation industry to reflect on what is needed to drive the industry forward.
The event, hosted at the Fairmont Winnipeg hotel in the vibrant heart of downtown Winnipeg, brought together hundreds of aviation and travel executives from airlines, airports and suppliers to explore relevant issues, as well as the commercial and operational pillars underpinning strategic decision making at local and international carriers.
Here’s some initial insights from the first day of the event:
Air Canada Express SVP: We face ‘tremendous headwinds’ with regulation
Air Canada SVP Air Canada Express and government relations Ferio Pugliese stated: “Open skies has allowed us to connect passengers beyond just the borders of Canada, to use Canada as a hub to connect globally”. He added: “We’ve seen tremendous headwinds with respect to regulatory policies and passenger rights, we are facing tremendous headwinds and I think that as an industry we need to pay close attention, we still remain one of the most expensive jurisdictions”.
Transit traffic for Canadian hubs ‘cornerstone’ of international strategy
Air Canada EVP and CCO Lucie Guillemette stated “Transit traffic for Canadian hubs continues to be a cornerstone of our international strategy”, adding “since 2013 we’ve grown our US transit business by 132%”. Ms Guillemette said: “We are still a small player even with our investments to achieve a fair market share” adding the delivery of the A220 in Dec-2019 will be “a game changer”, and will provide further network and route opportunities.
NACC outgoing president: ‘I would give Canada’s Govt a solid fail’
National Airlines Council of Canada outgoing president and CEO Massimo Bergamini stated: “If I were to grade Canada’s Government, I would give them a solid fail”. Mr Bergamini added: “Over the last 25 years we have not had as much focus on aviation related policy issues as we have had in the last three years, including negotiations for airport screening security services and air passenger rights, at the outset this was incredibly promising”. He said: “However, government have failed to bring the transportation lens into policy making, decisions have been driven primarily by fiscal measures”.
Economic Development Winnipeg discussing how tourism can ‘drive the economy’ with Government
Economic Development Winnipeg president and CEO Danya Spiring stated: “We’re trying to educate provincial and federal governments to discuss how tourism can drive the economy”, adding: “When you look at the vastness of our country, you cant eliminate air travel, it is particularly important in Canada because we’re spread out, especially in Manitoba, so flying is essential”.
Cyber threats – Air Canada continues to invest in detection and blocking technologies
Air Canada SVP and CIO Catherine Dyer stated: “The ever changing technological landscape requires businesses to respond to cyber security threats”. Ms Dyer added: “As part of our cyber security programme, we continue to invest in detection and blocking technologies with proactive threat hunting”. She said the carrier is working with government agencies to discuss risks to industry intelligence.
Airlines need to review which strategies to follow
CAPA – Centre for Aviation chairman emeritus Peter Harbison stated: “There are a number of conflicting signals internationally, including trade disruption, the China-US dispute and what is happening in the Middle East, these have created a good deal of uncertainty”. Mr Harbison added: “Airlines are cutting back on increases or projected stable levels, in this environment they need to review which strategies to follow, what passengers are willing to pay, and this doesn’t give a lot of flexibility in terms of strategy”.
Industry interconnectedness can’t be undone… the urge of people to travel and go and see things can’t be reversed
Greater Toronto Airports Authority president and CEO Howard Eng stated: “I’m very optimistic the interconnectedness between nations and trading partners can’t be undone, the urge of people to travel and go and see things can’t be reversed, so I’m optimistic that we will weather the crisis and we will all find a way and that is something very strong about our industry”.
Air Canada EVP and CCO: Women represent 30% of our senior management team
Air Canada EVP and CCO Lucie Guillemette stated: “Culture change is the most significant achievement for us, as we’ve grown up a rule bound, process driven industry and we recognise there is no room for that if we aim to be sustainable”. Ms Guillemette added: “We support our women in every area of the business, women represent 30% of our senior management team, global expansion has enabled us to build an inclusive team”.
United Airlines will take the 737 MAX aircraft as ‘quickly as Boeing can deliver them’
United Airlines director domestic planning and capacity forecasting Mark Weithofer stated: “We’re constantly working with Boeing on what the delivery rate of the MAX 737 aircraft will look like, we’re interested in how 2020 looks because we want to get back on track”. Mr Weithofer added: “We will take the aircraft as quickly as Boeing can deliver them to us”.
LOOK OUT… Exclusive executive interviews from Winnipeg will be published on CAPA TV in the coming weeks, as well as full coverage of the agenda sessions.
We’re a long way away from making decisions about electric aircraft
Air Canada director international affairs and facilitation David Waugh stated: “We’re making investments to reduce our carbon footprint, however we’re a long way away from making decisions about electric aircraft”
Brexit has had ‘limited impact’ as London remains a ‘very important’ market for Delta
Delta Air Lines director alliances Justin Bates stated Brexit has had a “limited impact” on the US-UK relationship, adding trade is still strong and London is a “very important market for us, and I don’t think that will change anytime soon”.
Consumers are demanding an elegant interaction while on the move
Air Canada SVP and CIO Catherine Dyer stated: “Digital technologies are redefining the way we do business and will have an impact all across our industry, Artificial Intelligence serves as the engine for travel personalisation and identifies operational improvements”. She said: “Consumers expect and demand the ability to be on the move and have an elegant interaction, which includes their travel journey”. Ms Dyer added: “The challenge to use data to improve the passenger experience is game changing and leveraging this data is essential to our customer centric strategy”.
TIACA: Canada has to establish different bilateral access policy for cargo
TIACA secretary general Vladimir Zubkov stated: “The most important advantage of Canada is its openness to world trade, which goes hand in hand with air cargo, which makes up 33% of global trade”. Mr Zubkov added: “It was announced two days ago Winnipeg Airport would receive a multi million cargo facility, but who will fill the facility? Not necessarily local airlines, a different bilateral access policy needs to be established”.
CAPA – Centre for Aviation members were able to see live updates from the CAPA Canada Aviation Summit and have access to over 100 briefs from the event. Find out more about how a CAPA membership provides a front row seat to global aviation news, analysis and data as it happens, with access to a comprehensive suite of tools that can be customised to your needs.