Month: December 2018

Expansion at Air Canada & WestJet, and the LCC invasion: A look back at 2018

News provided by Travelweek Group

TORONTO — The airline news flew at top speed in 2018.

Canada’s airlines expanded their route networks in a major way, and in the case of both Air Canada and WestJet, sharpened their focus on the highly coveted corporate and premium traveller segments.

Meanwhile the low-cost carriers and ultra low-cost carriers staked their claim (or in one case, slunk out of the market). Mainline carriers introduced entry-level basic economy fares to stay competitive, adding yet more fare classes to an already cluttered lineup.

Here’s a look at some of the top airline stories in 2018…

AIR CANADA

Business travellers travel more and spend a whole lot more. No wonder they’re such a sought-after segment. Air Canada introduced its Air Canada Signature Service in April 2018 for international flights, and in June 2018 on select flights within North America.The airline says its Air Canada Signature Service and Air Canada Signature Class brands reflect ongoing refinements to its premium travel service.

Meanwhile the past couple of years have been a whirlwind of new routes (and new route launches) for Air Canada, in keeping with its global expansion plans. At the height of the spring and summer 2018 route inaugurals Air Canada had introduced an astounding 74 new routes since 2016. The carrier has also increased capacity by more than 40% over the past three years.

The airline credits travel agent support with helping push Air Canada into the rankings as one of the top 10 airlines in North America.

Now the carrier has its eye on becoming one of the top 10 international carriers in the world.

The dog days of summer got a lot more interesting in 2018 with all the Deal or No Deal talk between Air Canada and Aeroplan parent company Aimia. Less than a week after Aeroplan parent company Aimia said it was eyeing charter flights to its most popular destinations, came the announcement in July that a new corporation headed up by Air Canada wanted to acquire Aeroplan for $2.25 billion, including $250 million in cash and $2 billion worth of Aeroplan points liability.

Aimia held out for $450 million, and got it in a deal that was announced in August and finalized in November.

And with that Air Canada took back control of the valuable Aeroplan loyalty business that it created in 1984 and spun off in 2002.

WESTJET

At their recent trade partners event, WestJet’s VP Marketing Communications Richard Bartrem called it “the peanut butter approach” – serving up a product designed to please everyone. Trying to be all things to all people never works, and that’s why WestJet is aiming high for the premium market, and why it launched Swoop, for passengers who want to pay for a seat and seatbelt and not much else.

WestJet launched its new branding and ‘Love Where You’re Going’ tagline in October, along with new Dreamliner service out of Calgary to London-Gatwick, Paris and Dublin for 2019.

The first of 10 Boeing 787-9 Dreamliners ordered by WestJet will arrive in Calgary in early 2019, with two more arriving by April. The airline also has options for an additional 10 aircraft to arrive between 2020 and 2024.

The Dreamliners will carry 320 guests in a three-class cabin configuration, including WestJet’s new Business cabin featuring 16 private pods with lie-flat seats, an upscale Premium cabin and an updated Economy cabin.

WestJet is also focusing its attention on the revamping of its 737 fleet to 737 MAX, a rollout that will continue over the next 18 to 24 months.

WestJet had some challenging times in 2018, mostly notably with the threat of a pilot’s strike that grabbed headlines in April and May. The strike was thankfully averted but bookings took a hit. The carrier dusted itself off and kept right on going. WestJet recently announced deeper ties with codeshare partner Qantas, opening up Australia even more, and waits to hear if its joint venture with Delta will get the nod from regulators.

LCCs, ULCCs & BASIC ECONOMY

Norwegian came in. Primera went out and WOW is shrinking. Swoop launched its Canadian routes, and then (after an unexpected delay) its U.S. routes. And Air Canada Rouge marked its fifth anniversary.

It was a crowded market for low-cost carriers and ultra low-cost carriers in Canada in 2018, and that’s not even including Canada Jetlines, which after many years seems to be getting its ducks in a row but still has yet to announce an official launch date.

Not that many agents prioritize booking LCCs and ULCCs, and with good reason, since they’re generally marketed as a B2C product and in most cases the commissions are minimal to non-existent.

But the LCCs and ULCCs have been a major disruptor for mainline carriers, who have responded either with low-cost carriers of their own, like Rouge and Swoop, and/or introduced basic economy fares to cover their bases. Air Canada, WestJet and Transat all brought in basic economy fares in 2018.

One of the stronger LCCs, Norwegian, started seasonal flights from Montreal to the French Caribbean islands of Guadeloupe and Martinique on Oct. 29 and Nov. 1, 2018.

Starting next spring, Norwegian will also launch the only transatlantic flight out of Hamilton International Airport (YHM) on March 31, 2019, with year-round, daily service to Dublin.

Swoop took flight with its domestic flights in June, and got permission to fly its U.S. routes in late October, not before garnering some headlines for missing its original target.

Meanwhile Air Canada Rouge marked its fifth anniversary with 53 aircraft, with 22 Airbus A319s, six Airbus A321s and 25 Boeing 767s. The LCC has flown more than 25 million passengers on 100 routes (up from an initial 14) on five continents.

There were some chuckles and raised eyebrows when the news hit in November that low-cost carrier Flair called in the RCMP to deal with a disturbance at the gate after a planeload of passengers, some of whom had been waiting for 14 hours, had their flight cancelled.

That said, Flair has expanded its network beyond Canada and into the U.S., although it announced in August that it would stop serving Hamilton International Airport and for now focus its attention in Ontario on Toronto Pearson. The LCC also serves Edmonton, Winnipeg, Calgary, Abbotsford, Victoria and Halifax.

Jetlines Announces Closing of SmartLynx Financing

Provided by Canada Jetlines

December 27, 2018, Canada Jetlines Ltd. (JET: TSX-V) (the “Company” or “Jetlines”) is pleased to announce that further to its press release of November 27, 2018, it has closed a private placement with SmartLynx Airlines SIA (“SmartLynx”) pursuant to which it has sold an aggregate of 22,727,272 subscription receipts (each, a “Subscription Receipt”) at a price of $0.33 per Subscription Receipt (the “Offering Price”) for gross proceeds of $7.5 million (the “Offering”). Jetlines entered into a subscription agreement with SmartLynx for a financing of up to $15 million. With the closing of the initial $7.5 million, SmartLynx retains the option to acquire an additional $7.5 million of the Company’s shares at the maximum discounted market price permitted under TSX.V rules at the time the option is exercised.

In connection with the Offering, Jetlines Operations and SmartLynx also entered into an agreement whereby SmartLynx shall provide ACMI (Aircraft-Crew-Maintenance-Insurance) services to Jetlines Operations during the following eight winter seasons. This agreement will allow Jetlines to increase its fleet capacity in the market during the very busy Canadian winter season.  In addition, SmartLynx and the Company have entered into a two-year agreement that will provide Jetlines with services meant to support Jetlines during the early stage of their operations.

SmartLynx specializes in full-service ACMI (Aircraft-Crew-Maintenance-Insurance) aircraft lease services and is the leading ACMI provider in Europe for Airbus A320 aircraft. SmartLynx aircraft has been utilized by major airlines including Norwegian, EasyJet, Thomas Cook and TUI.

Executive Chairman, Mark Morabito stated, “I would like to thank the SmartLynx group and our entire operations, finance and legal team at Jetlines, led by CEO Javier Suarez, for their support and effort in achieving this significant corporate milestone. We look forward to working with SmartLynx and leveraging their knowledge and expertise as a seasoned European airline that flies aircraft for some of the most successful ultra-low-cost carrier airlines in the world.”

Details of the Offering

The Offering resulted in the issuance of 22,727,272 Subscription Receipts at the Offering Price, for gross proceeds of $7.5 million. The Subscription Receipts were issued pursuant to the terms of a Subscription Receipt Agreement (the “Subscription Receipt Agreement”) between the Company, SmartLynx and Computershare Trust Company of Canada (the “Escrow Agent”). SmartLynx also has the option exercisable for a period of twelve months following the closing of the Offering to complete a second financing for variable voting shares for additional gross proceeds of up to $7.5 million at the discounted market price at the time it exercises its option (the “Option”).

Each Subscription Receipt entitles SmartLynx to receive, without payment of additional consideration or further action on the part of the holder, one unit of the Company (each a “Unit” and collectively the “Units”), upon receipt by the Escrow Agent, prior to August 31, 2019 (the “Deadline”) of a release notice from the Company and SmartLynx (the “Release Notice”), confirming that: (a) the Company has raised additional gross proceeds of $40 million (the “Funding Milestone”) from a subsequent financing by May 31, 2019 (such completion date subject to waiver by SmartLynx); (b) the receipt by the Company’s subsidiary, Canada Jetlines Operations Ltd. (“Jetlines Operations”), of its air operator certificate from Transport Canada; and (c) no termination event has occurred.

Each Unit will consist of one variable voting share of the Company and one common share purchase warrant (each, a “Warrant”).  Each Warrant shall entitle the holder thereof to purchase one variable voting share of the Company at a price of $0.45 at any time up to 5:00 p.m. (Vancouver time) on the date which is 36 months from the closing date.

If: (i) the Release Notice is not delivered by the Deadline, or (ii) the Offering is terminated in accordance with the terms of the Subscription Receipt Agreement, then SmartLynx will be entitled to receive an amount per Subscription Receipt equal to the Offering Price and an entitlement to the interest earned thereon. Any shortfall will be funded by the Company. In addition, the Company is obligated to pay a termination fee of US$250,000 if the Company has not achieved the Funding Milestone by May 31, 2019 or commits certain other material breaches and SmartLynx terminates the Subscription Agreement.

The net proceeds of the Offering will be used to further the business objectives of Jetlines in launching an ultra-low cost airline carrier in Canada, including advancing the licensing process, augmenting the leadership team with operations and commercial personnel, branding and marketing activities, as well as advance internet, digital media, and IT systems initiatives.

It is expected that SmartLynx will become an insider of the Company on conversion of the Subscription Receipts. The Subscription Receipts, and any Units acquired on the conversion thereof, are subject to a statutory four month hold period expiring on April 22, 2019.

The Company, Jetlines Operations and SmartLynx also entered into a framework agreement (the “Framework Agreement”) that governs aspects of the relationship between the parties. The Framework Agreement covers matters including the right of SmartLynx to appoint a single Board member to the Company and Jetlines Operations, rights to participate on Board committees, arrangements regarding the review of aircraft leases, the grant of a pro-rata right to SmartLynx to participate in future financings and certain other rights detailing with operational and expenditure matters of the Company and Jetlines Operations.

Air Canada flight to Maui diverted back to YVR after ‘hydraulic indication

News provided by citynews1130.com

BY SASHA LAKIC Posted Dec 24, 2018 2:55 pm PST

(Source: Air Canada website)

VANCOUVER (NEWS 1130) — A Vancouver-Maui flight almost half-way to its destination has had to turn around and fly back to YVR after a mechanical issue.

Air Canada says flight AC535 is now on its way back to Vancouver with 167 passengers, for whom the airline is arranging another airplane to get them back to Hawaii “as soon as possible.”ADVERTISEMENTView image on Twitter

View image on Twitter
Peter Wagner@peterjontheair

It appears an @AirCanada flight from #VancouverBC to #Maui turned around en-route, is due back around 2:30, according to FlightAware.

(Note — the map can only approximate the position of the plane over the ocean) @NEWS1130 1:20 PM – Dec 24, 2018 See Peter Wagner’s other Tweets

Isabelle Arthur, Air Canada’s director of media relations, says the Boeing 737 MAX 8 had to return for “maintenance reasons due to hydraulic indication.”

No further details were given.


TSB investigating a runway incursion in Trail, BC

Provided by Transportation Safety Board of Canada/CNW

RICHMOND, BC, Dec. 24, 2018 /CNW/ – The Transportation Safety Board of Canada (TSB) is conducting an investigation into the 12 December 2018 runway incursion that took place at the Trail Regional Airport in Trail, British Columbia.

See the investigation page for more information.

Runway incursion – The occurrence

On 12 December 2018, a Beechcraft 1900C aircraft operated by Pacific Coastal Airlines departed Vancouver International Airport for Trail Regional Airport, British Columbia, with 2 crew members and 19 passengers on board. While the aircraft was conducting an approach to land on Runway 16 at the Trail airport, an airport vehicle was performing an inspection of the same runway. The vehicle was able to get to the main apron just before the aircraft reached the runway/taxiway intersection, thereby avoiding a collision. There was no damage to the aircraft. No injuries were reported. The TSB is investigating.

SOURCE Transportation Safety Board of Canada

Acquisition of Aeroplan Loyalty Business by Air Canada Clears Regulatory Requirements

Provided by Air Canada/CNW

MONTREAL, Dec. 24, 2018 /CNW Telbec/ – Air Canada today announced that the acquisition of Aimia Inc.’s (“Aimia”) Aeroplan loyalty business has cleared regulatory requirements, following the receipt of the required confirmation under the Canada Transportation Act and a “no action letter” issued by the Canadian Competition Bureau. This follows the conclusion of the definitive share purchase agreement with Aimia for the acquisition of Aimia Canada Inc. (“Aimia Canada”), owner and operator of the Aeroplan loyalty business. 

Concurrently with the signing of the share purchase agreement announced Nov. 26, 2018, Air Canada, The Toronto-Dominion Bank (“TD”), Canadian Imperial Bank of Commerce (“CIBC”), and Visa Canada Corporation (“Visa”) signed various commercial agreements relating to and in support of the acquisition, including credit card loyalty program and network agreements for future participation in Air Canada’s new loyalty program, all of which are conditional upon closing of the acquisition of Aimia Canada.  Additionally, Air Canada remains in negotiations with American Express, which also issues Aeroplan co-branded products, to secure its continued participation in the Aeroplan program after 2020.

The aggregate purchase price for the acquisition of Aimia Canada consists of $450 million in cash subject to post-closing adjustments and includes the assumption of approximately $1.9 billion of Aeroplan Miles liability. Air Canada will receive payments from TD and CIBC in the aggregate amount of $822 million. Visa will also be making a payment to Air Canada.  In addition, TD and CIBC will make payments to Air Canada, at closing, in the aggregate amount of $400 million as prepayments to be applied towards future monthly payments in respect of Aeroplan miles.

The closing of the acquisition, expected to occur in January 2019, remains subject to the satisfaction of customary conditions as well as Aimia shareholder approval which will be sought by Aimia at its special meeting of shareholders scheduled for January 8, 2019.

Caution Regarding Forward-Looking Information

This news release includes forward-looking statements within the meaning of applicable securities laws. Forward-looking statements, by their nature, are based on assumptions and are subject to important risks and uncertainties. Forward-looking statements cannot be relied upon due to, amongst other things, changing external events and general uncertainties of the business. Actual results may differ materially from results indicated in forward-looking statements due to a number of factors. The acquisition of the Aeroplan loyalty business is subject to Aimia shareholder approval and certain customary conditions and there are no assurances that the acquisition will be completed as described in this news release or at all. Any forward-looking statements contained in this news release represent Air Canada’s expectations as of the date of this news release and are subject to change after such date. Air Canada disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.

Sale by Aimia of Aimia Canada to Air Canada Clears Regulatory Requirements

Provided by AIMIA/CNW

MONTREAL, Dec. 24, 2018 /CNW Telbec/ – Aimia Inc. (TSX: AIM) (“Aimia”) today announced that the sale by Aimia to Air Canada of all of the shares of Aimia Canada Inc., owner and operator of the Aeroplan loyalty program, pursuant to the share purchase agreement entered into by the parties on November 26, 2018, has cleared the applicable regulatory requirements with the issuance of a no action letter under the Competition Act (Canada). In addition, Air Canada has informed Aimia that the required confirmation under the Canada Transportation Act has also been obtained. By way of reminder, Aimia has convened a special meeting of common and preferred shareholders to be held on January 8, 2019for the purpose, among other things, of considering and voting on the transaction. Closing of the transaction is expected to occur in January 2019 shortly following the special meeting of shareholders and remains subject to the satisfaction of customary conditions, including the required shareholder approval.

SOURCE AIMIA

YVR Traffic Advisory – Plan Ahead: Boxing Day Traffic Delays on Dec. 26

Provided by Vancouver Airport Authority/CNW

Richmond, BC, Dec. 21, 2018 /CNW/ – Vancouver International Airport (YVR) is expecting traffic delays to and from the airport on Wednesday, December 26. This is due to the annual Boxing Day sale at the nearby McArthurGlen Designer Outlet Vancouver Airport. While we are working closely with traffic management personnel and RCMP traffic enforcement, we anticipate heavy congestion on the day. Those travelling to and from the airport by road should expect delays.

Thank you for helping us spread the word about the recent Black Friday sale as that helped to alleviate traffic issues. We appreciate you sharing the below Boxing Day tips with your audiences. 

Unfortunately, we do not have a spokesperson available for clips. 

Here is important information:

  • YVR travellers are advised to take the Canada Line if possible. For those who must drive to the airport, leave extra time and have a parking plan. For those planning to use the Value Long Term lot, adjacent to Templeton Station, be aware that you may face lengthier delays due to the close proximity to the Designer Outlet Centre. Travellers are also advised to monitor traffic reports.
  • Employees on Sea Island are advised to take the Canada Line if possible. For those who must drive, leave extra time as heavy traffic is expected throughout the day and may impact your commute time.
  • Boxing Day shoppers are advised to take the Canada Line if possible. McArthurGlen is only steps away from Canada Line’s Templeton Station. For those who must drive, expect delays accessing the Designer Outlet Centre.

SOURCE Vancouver Airport Authority

Air Tanzania Becomes First Airbus A220-300 Operator In Africa

News provided by Airbus

Air Tanzania has become the first African carrier to take delivery of the Airbus A220 aircraft, the newest addition to the Airbus family of commercial aircraft. Air Tanzania (The Wings of the Kilimanjaro) also becomes the latest member of Airbus aircraft operators.

Representatives from the airline – as well as officials from the United Republic of Tanzania government, alongside executives from the A220 programme – celebrated the aircraft’s handover at the A220 Mirabel assembly line.

“The A220’s unrivalled passenger comfort, combined with its remarkable performance and economics, will be an excellent asset to further develop Air Tanzania’s network,” said Tito Kasambala, Acting CEO, Tanzanian Government Flight Agency (TGFA).

The A220 will allow Air Tanzania to further develop its domestic and regional market as well as open new routes to India and the Middle East from its home base at Dar es Salaam.

“With the addition of the A220 in our fleet, we are confident that we will expand our footprint in the growing African markets and beyond, as we unlock additional routes and regain our position as a key player in the African air transport market,” added Ladislaus Matindi, Managing Director & CEO, Air Tanzania Company Limited.

Air Tanzania becomes the fifth airline globally with an A220 family aircraft.

“After Europe, Asia and America, we are proud to see the A220 fly now also on the African continent and in Air Tanzania’s livery. With over 240 Airbus aircraft flying in Africa and a large network of flight service offices in the region, we are ready to contribute to the airline’s success,” said Philippe Balducchi, CEO of the A220 partnership.

The A220 is the only aircraft purpose-built for the 100-150 seat market; it delivers unbeatable fuel efficiency and true widebody comfort in a single-aisle aircraft. The A220 brings together state-of-the-art aerodynamics, advanced materials and Pratt & Whitney’s latest-generation PW1500G geared turbofan engines to offer at least 20 percent lower fuel burn per seat compared to previous generation aircraft. With a range of up to 3,200 nm (5020 km), the A220 offers the performance of larger single aisle aircraft.

With an order book of over 400 aircraft to date, the A220 has all the credentials to win the lion’s share of the 100- to 150-seat aircraft market, estimated to represent at least 7,000 aircraft over the next 20 years.

NAV CANADA reports November traffic figures

Provided by NAV CANADA/Globe Newswire

OTTAWA, Dec. 21, 2018 (GLOBE NEWSWIRE) — NAV CANADA announced today its traffic figures for the month of November 2018 as measured in weighted charging units for enroute, terminal and oceanic air navigation services, in comparison to the prior fiscal year.

Air traffic in November 2018 increased by an average of 2.5 per cent compared to the same month in 2017.

Fiscal 2019 year-to-date traffic has been 3.5 per cent higher than in the prior fiscal year. NAV CANADA’s fiscal year runs from September 1 to August 31.

Weighted charging units represent a traffic measure that reflects the number of flights, aircraft size and distance flown in Canadian airspace.

WestJet sets new record for guests flown

Provided by WESTJET, an Alberta Partnership/CNW

Over 82,000 guests choose Canada’s favourite airline for their holiday travel on Friday, Dec. 21

CALGARY, Dec. 21, 2018 /CNW/ – As the busy holiday travel season continues, WestJet today set a new record for guests flown in a single day for the fourth time this year. The group, including WestJet, WestJet Encore, Swoop and WestJet Link flew 82,618 guests, surpassing the previous record of 80,219 guests set on August 7, 2018. 

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“On behalf of the WestJet Group, thank you to our guests for choosing to fly us for their holiday travel,” said Ed Sims, WestJet President and CEO. “WestJet employees from across our network extend best wishes for a safe and happy holiday season.” 

For tips on how to best navigate the busy Christmas travel season, please visit the WestJet Blog.