Tag: Airbus A320

Air Canada prepares rouge subsidiary for ULCC competition

From Air Transport World – 9 August 2018 – 

Rouge-Boeing-767-300-Coastal-5As the Canadian ULCC market heats up, Air Canada said it is prepared to leverage the significant flexibility of its rouge subsidiary to ward off competition, from adding flights in major domestic markets to re-configuring aircraft to match rivals’ all-economy offerings.

“We have been preparing to ensure that we have all the tools necessary to offset [low-cost competition] and ensure that we are not negatively impacted,” Air Canada passenger airlines president Ben Smith said.

Set up five years ago as a leisure-destination operation, rouge’s network is heavily transborder and international, with only a handful of year-round and seasonal routes within Canada. None of them link any of the country’s six largest metropolitan areas—Toronto, Montreal, Vancouver, Calgary, Ottawa and Edmonton—part of the carrier’s strategy to preserve mainline margins.

Calgary-based WestJet and its ULCC subsidiary Swoop are following a similar network strategy, but unlike rouge’s two-class aircraft, Swoop operates 189-seat all-economy Boeing 737-800s.

Fast-growing ULCC Flair Airlines is taking the strategy a step further, operating single-class, 158-seat 737-400s on popular domestic routes such as Toronto-Calgary and Vancouver-Calgary. The Edmonton-based carrier’s recent announcement to move its Hamilton services to Toronto will make it even more prominent, and it plans to follow rouge and Swoop into transborder services.

While Montreal-based Air Canada set up rouge as a hybrid low-cost leisure carrier, the company has flexibility to transform its subsidiary to meet market needs, thanks in part to a 2017 amendment to its pilot agreement. The deal lifted Rouge’s fleet-size cap of 50—25 widebodies and 25 narrowbodies—by permitting more narrowbodies based on Air Canada’s mainline operation and permits rouge aircraft to replace regional feeder flying.

Air Canada is already taking advantage of the narrowbody cap’s removal. Its 53-aircraft fleet includes 22 Airbus A319s and six A321s, and it plans to add three A320s next year. It also is evaluating its rouge deployment strategy in light of shifting market dynamics.

“We have not deployed one of our options, which is rouge on any of the major markets. We can do that,” Smith said. “We can also modify the rouge model …. We can densify the rouge aircraft to bring down the CASM. So, a lot of flexibility.”

Usage of the A320s will be determined by the best opportunities. While the strategy could change, Smith said three options are being considered: adding domestic capacity, flying attractive “southern” routes to Florida, Mexico, and the Caribbean, or replacing regional-feeder flying.

“We’re quite pleased with the position we’re in,” he said.

, sean.broderick@aviationweek.com

Canada Jetlines Prepares for Takeoff with Definitive Lease Agreement for Two Airbus A320 Aircraft

Jetlines_aircraftVANCOUVER, BRITISH COLUMBIA, Canada Jetlines Ltd. is pleased to announce that it has partnered with AerCap, a global leader in aircraft leasing and aviation finance, and has signed a Definitive Lease Agreement for two Airbus A320 aircraft, effective June 12, 2018. Delivery of the two aircraft is expected by the first half of 2019.

AerCap is the world’s largest independent aircraft leasing company with a well-diversified portfolio of high-quality aircraft. They provide aircraft to a global network of approximately 200 airline customers in approximately 80 countries and is recognized as the most active aircraft trader globally. AerCap’s President & Chief Commercial Officer, Philip Scruggs commented, “We are very pleased to welcome our new customer airline, Jetlines, and particularly pleased to play a role in the start-up of their new operations. We wish the board and management team every success and we look forward to working with the Jetlines team as they begin operations.”

Incoming CEO Lukas Johnson stated, “AerCap has a proven reputation of leasing high-quality aircraft and we look forward to continuing to build a positive relationship with them. Through my experience with Airbus, I believe that these planes are the right aircraft to commence operations with. The majority of ultra-low cost carriers worldwide operate with the Airbus A320 fleet based on its fuel-efficient narrow-body framework that supports a high-density seat configuration.”

The two committed Airbus A320’s are sister aircraft, having virtually identical conformity in design, features, and equipment, allowing Jetlines to expedite the necessary training and maintenance processes to commence operations at an earlier date. The sister aircraft are 12 years old.

Executive Chairman Mark Morabito stated, “Our operations team has worked diligently on securing quality aircraft, carrying out a meticulous vetting process to ensure that the aircraft are fit for Jetlines and our future passengers.” Mr. Morabito continued, “I am pleased to report that we are now positioned to carry out the remainder of work to complete our licencing process and that we are continuing to advance our financing initiatives, personnel recruitment, and airport agreements.”

The pre-existing purchase agreement with Boeing for the 737-MAX’s for delivery in 2023 remains in place. Jetlines plans to use the Airbus planes to support its start-up operations and is not limited from securing a Boeing fleet in future, should the Company decide to do so.