Two start-ups and two incumbents are moving to fill the vacuum expected to result from Air Canada's takeover and makeover of Canadian Airlines.
While none aspire to become a new Air Canada or Canadian, they foresee profitable low-cost, low-fares niches.
Regional Airlines Holdings, led by Toronto businessman Robert Deluce, hopes to buy Canadian Regional Airlines, which the government is forcing Air Canada to sell, plus three of its other subsidiaries: Air Nova, Air Ontario and Air BC. If he can secure all four, Deluce plans to create eastern and western divisions for a regional network employing 5,000 people and operating more than 125 aircraft. He hopes to codeshare with Air Canada and Canadian.
His biggest obstacle may be Air Canada's unwillingness to sell anything other than Canadian Regional.
The other start-up is Hamilton-based CanJet.com. Its principal Kenneth Rowe says the airline adopted the ".com" suffix because over half the bookings are expected to come via the Internet. Rowe is chairman of IMP Group International, a Halifax-based conglomerate with aviation experience. Rowe, who plans to buy up to 20 Boeing 717s, sees CanJet.com as "a Wal-Mart with wings", referring to the aggressively low-cost US grocery chain.
In November, Rowe complained that Air Canada bought all of Hamilton airport's slots and announced plans for its own Hamilton-based spin-off after it learned of his plans.
As a result, Ottawa told Air Canada that as a condition of its takeover, it must delay launching any low-cost Canadian service until September. In the event of a start-up by then, Air Canada must wait another year.
Canada 3000 is one of two incumbents looking for opportunities. It mostly operates charters, but is considering more scheduled flights. President Angus Kinnear says slot availability is the key, especially at Toronto, where Air Canada and Canadian control over 80% of peak hour slots. Kinnear says if the majors are allowed to keep more than 65%, "then none of us can compete".
The most formidable newcomer may be WestJet, which plans to spread east after achieving success in western Canada.
Source: Airline Business
