MONTREAL — Air Canada executives say the country’s biggest airline is better positioned than it has been in more than a decade to respond to WestJet’s plan for a new ultra-low-cost carrier (ULCC).
“We actually have many more tools at our disposal, which gives us a much better feeling and confidence that we are well-positioned to respond to whatever gets put in front of us,”says Ben Smith, Air Canada’s president of passenger airlines.
The Montreal-based company has tested the use of its Rouge subsidiary on some domestic routes and could deploy its planes, as appropriate, to compete with a new WestJet basic service that is set to launch next year.
In addition, premium seats could be removed from its Rouge and Air Canada planes to match the number of economy seats that WestJet’s venture will have.
Air Canada also has more flexibility because of the industry’s move to charge lower fares but higher fees for checked bags, reserved seats and other things.
WestJet has estimated ultra-low-cost airlines could grow to account for five per cent of the Canadian market. However, Air Canada says the country faces impediments such as higher costs, including taxes, airport fees and security charges that are different from the United States and Europe.
CEO Calin Rovinescu says Air Canada will have no problem with WestJet’s plans to expand its main service on international routes by adding at least 10 Boeing 787 Dreamliners beginning in 2019.
“The addition of incremental competition is something that at this stage is not troubling to us,” Rovinescu told analysts Friday on the company’s first-quarter conference call.
Meanwhile, Air Canada expects the federal government’s planned passenger bill of rights will address the issue of people being forcibly removed from aircraft because of overbooking, a problem that has given U.S. carriers a black eye in recent weeks.
“All in all, we expect to have a reasonable and measured dynamic which should not materially impact our operations,” he added.