Brian Dunn/MONTREAL
Air Canada is cancelling flights, reducing frequencies and taking three aircraft out of service in an effort to cut costs amid a softening economy. The airline has eliminated its 8% capacity growth plans for this year but is pushing to launch its own low cost carrier.
The network trimming will see Air Canada eliminate non-stop flights between Ottawa and Raleigh-Durham, North Carolina, Montreal and Denver and Montreal and Edmonton over the next month. Frequencies on several routes have been cut, including between Toronto and New York La Guardia , while the daily service between Vancouver and Dallas has been downgraded to three flights a week. The airline has also reduced its twice-daily service between Vancouver and Hong Kong to one flight a day.
The three aircraft being withdrawn will be leased on a pay-as-used basis, so they will still be available for emergencies.
Meanwhile, Air Canada has agreed to increase fares on three Eastern Canadian routes also flown by CanJet Airlines, following discussions with the federal Competition Bureau. The move follows a complaint by Halifax-based CanJet that Air Canada was undercutting it on its major routes.
Air Canada has warned that it must act against low-cost competitors, and president Robert Milton says in a letter to the airline's pilots that Air Canada must launch its own "no-frills" airline to compete against WestJet Airlines of Calgary and other discount carriers such as CanJet. Milton says WestJet is hurting it badly in Western Canada.
WestJet says plans to fly two daily non-stop flights between Toronto and Calgary starting in July are likely to be delayed because it has been unable to obtain the required slots at Toronto's Pearson Airport. It still intends to increase capacity this year by up to 45% as part of its plan to add at least 36 737-700s by 2006 to its current fleet of 23 737-200s.
Source: Flight International
