Edmonton-based Canada West Airlines has decided to push back its long-awaited launch to next spring after being sidelined by several years of industry turmoil and investment challenges.
Company chairman and chief executive Gordon Andrews told Business Edge last week that the low-cost carrier – which is targeting international leisure travellers rather than the fiercely competitive domestic market – is still raising sufficient funds from investors.
Initially scheduled to launch last summer and delayed two times since, Canada West is refining its strategies to address the evolving nature of the travel sector since the September 2001 terrorist attacks in the eastern U.S., Andrews said.
“I like to call us a marketing organization that calls itself an airline. What we’ve done is look at the low-costing model and . . . are translating it into a long-haul and international model.
“We need to offer a low-cost service but with the comforts required for a nine or 10-hour flight.”
“We need to strike that balance. The low-cost model is the way of the future,” said Andrews.
He said his airline will rely on the model popularized in Canada by Calgary-based WestJet, but move beyond the Canadian borders to serve seasonal markets such as Europe and holiday sun spots. Canada West will compete with corporate giants including Air Canada, the nation’s largest carrier, by keeping costs down through reduced infrastructure and labour overhead, Andrews said.
Canada West has abandoned earlier plans to launch its own tour company division, deciding to instead promote corporate partnerships with tour operators and travel companies in the West and abroad. The carrier will use a state-of-the-art website to allow customers to book add-on services such as rental cars and ground tours through travel-industry partners, he added.
Andrews said a series of world events, including fallout from the 9/11 terrorist attacks, the U.S.-led invasion of Afghanistan and Iraq, and the SARS health crisis have created uncertainty in the travel industry. As a result, investors have not been as quick to come forward to support a new product.
“We need to have a target date and we need to move that target date along – we’re hoping for the spring of 2004.”
Domestically, several other Canadian airlines have taken to the skies in Alberta in the past year to serve the lucrative short-haul, no-frills market – moving in on the long-held turf of West Jet. In spring 2002, Air Canada launched Zip Air, a Calgary-based low-cost carrier.
Montreal-based Jetsgo took off in June last year and began offering flights between Alberta and Eastern Canada this spring.
Jetsgo spokesman Brad Cicero said the Alberta market has been “quite good,” particularly during the summer. Jetsgo began service between Toronto and Calgary in April and added Edmonton in June.
The carrier serves 17 destinations including Edmonton, Calgary, Winnipeg and Victoria, but in the West funnels passengers directly to its Toronto hub and beyond through other routes stretching to the East Coast.
Marg Archibald, spokeswoman for Zip Air, said the airline has been steadily expanding since firing up its jets 18 months ago. The no-frills carrier expanded its initial routes in February and again this spring with new service to London, Ont., and Saskatoon. A seasonal Edmonton-Victoria route was added in June and more flights have been added to existing destinations to cope with growing demand, she said. “It has been a very strong summer for Zip.”
Meanwhile, WestJet recently inked a two-year deal with Transat A.T. Inc. of Montreal that will allow Transat and its two main tour operators to charter WestJet’s Boeing 737 aircraft and crews. World of Vacations and Air Transat Holidays will fill the narrow-bodied 737 jets with passengers heading for several southern holiday hotspots such as the Dominican Republic, Cuba and Mexico.
The first season’s contract is worth an estimated $29 million to WestJet.
“The addition of WestJet’s narrow-bodied aircraft will complement Air Transat’s wide-bodied fleet. We will now be able to increase our service offering in certain markets and broaden our offering in areas which could not otherwise be served by our aircraft,” said Lina De Cesare, executive vice-president (tour operators) for Transat.
As airlines begin finalizing their fall and winter travel schedules, travel agents are also optimistic for the coming months after a summer hammered by SARS, mad-cow disease fallout and the massive forest fires in Alberta and B.C.
“Travel agents are expecting quite a good fall and winter,” said Louise Crandall, spokeswoman for the Association of Canadian Travel Agencies. “As you can imagine . . . it was a rough summer. Some feel they’re lucky to have survived. For some it was just slow, and for some it was a great summer.”
Penny Warris, owner of Pipestone Travel adventure travel company in Calgary, said bookings are up substantially this fall for Albertans seeking soft adventure trips around the world.
Warris says her company has not been hammered by the travel turmoil because adventure travellers tend to be well- educated, socially aware and “not as caught up in the media hype.”
“I still think there’s a huge growth to come in the travel market,” Warris said. “I would definitely say it’s picking up a lot.”
One Edmonton travel agent who specializes in Asian destinations said fallout from the SARS crisis almost rivaled the travel aftershocks from the U.S. terror attacks two years ago.
Several of her colleagues have voluntarily cut their hours to cope with the drop in demand.
“Entire tour groups were cancelling flights, cancelling bus trips, cancelling hotels because of the SARS scare,” said the woman, who did not want to be identified for fear her business would be further hurt.
“We’ve lost too much business already. Maybe next year will be better.”
