Canada's domestic market has been shaken up this week, with Air Canada expanding services in a deal with charter operator Voyageur Airways, and rival Canadian Airlines International selling its loss-making regional, Inter-Canadian, to a group of investors.
The Air Canada move strengthens its position to serve small communities in Ontario and north-eastern USA through a 10-year agreement with Voyageur. The airline will purchase 10 Beech 1900Ds to operate out of its North Bay, Ontario base and Toronto. Services are due to start in September to destinations including Rochester, Syracuse and Albany in New York.
The 19-seat aircraft will also be used as an alternative to Air Canada's Dash 8s at certain times and to test new markets.
The aircraft will be painted in Air Canada livery and tickets will be sold under Air Canada's name.
The Voyageur pilots are non-union, which could present a problem with Air Ontario, Air Canada's regional airline. The Airline Pilots Association (Canada) plans to discuss whether Air Canada is contravening its union agreement.
While Air Canada expands on the domestic front, its rival, Canadian Airlines International (CAI), of Calgary, is selling its money-losing regional airline Inter-Canadian to a group of investors led by Michel Page, a former Quebec cabinet minister. The terms of the agreement are not disclosed.
The Montreal-based regional carrier operates eight ATR 42s and had estimated revenues of C$72 million ($50 million) in 1997, but has not shown a profit for years. CAI has been trying to sell the regional carrier since 1996 to pay down debt.
The investors plan to build Inter-Canadian into a strong central Canadian-based airline - which CAI, with its weak balance sheet, could not do.
Source: Flight International
