Rumours about AC Asian leisure market plans

Discussion in 'Air Canada | Aeroplan' started by guinnessxyz, Jun 1, 2013.  |  Print Topic

  1. We keep hearing rumours that AC has new plans for serving the Asian leisure that involve a new partner. This apparently will not be a ROUGE product and will obviously operate out of YVR initially.
     
  2. Canadi>n
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    Canadi>n Gold Member

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    The reality has emerged as using the new "high density" 777s to HKG instead of the Ws and Ls. These high density versions were ordered for a ROUGE variant operating routes high density routes like YVR-HKG, YUL-CDG and YYZ-LHR but it proved impractical to integrate a new brand with such key established routes. So the compromise was to put the 777HDs onto select AC runs on these routes and channel package and tour bookings onto these planes rather than the normal ones (where these are still operating).

    By having a premium cabin, and the new PE seating, AC would still keep its high yield revenue business customers who fly these planes, but add another 100 or so seats in the back. Best of both worlds!
     
  3. I believe they are still working on finding a new partner for leisure travel to Asia. The market size simply dictatesa need to harness bigger and better frequencies
     
  4. Canadi>n
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    Canadi>n Gold Member

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    For the moment the new 777s provide the best of both worlds for AC: enough business and PE seats to satisfy operating economics and market demand on key business/leisure routes like YVR-HKG and YUL-CDG, and more than enough economy seats to fill low-cost flyer demands...at least that's the strategy according to Calin in his talk yesterday with analysts:

    http://www.thestar.com/business/201..._contracts_to_aid_in_costcutting_efforts.html

    Also suspect to Asia AC doesn't want to confuse its branding with a new name like Rouge, so for the time being can have its cake and eat it too with these planes. As long as the people flying in the front have their creature comforts there will be no erosion of business there.

    Also confirms 787s will have a PE cabin.
     
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  5. That's why a specific partnership with an Asian carrier to sell to the leisure market from secondary cities in China makes sense.
     
  6. YULtide

    YULtide Gold Member

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    All I know is that Flex fares to HKG are increasing. I will be looking for alternatives to AC Flex fares which will not include flying Tango.
     
  7. tomh009
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    tomh009 Gold Member

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    Flex to NRT is more expensive, too, a premium of $1000+ over Tango. Even more surprising, the lowest Flex fares are at time 7-day and 14-day advance booking, while the bottom-feeder (I can say it since it's where I'm stuck) Tango fares have no advance booking requirements at all. AC is filling the planes (including AC 002 today) but how is the profitability?

    UA is not an appealing option, either, given the rock-hard seats and lack of in-seat power on the ex-CO aircraft. Maybe ANA, but that requires a connection in SFO or LAX. As someone said, this game is not as much fun as it used to be.
     
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  8. AC is making good money on their Asian routes which is why they are increasing frequencies. I have been to Asia four times this year and every flight was very full, above 90% BIS. They do sell some discounted seats in all cabins but in general their returns are solid.

    The game is not as much funas it used to be if all you are doing is playing the fare game. Airline fares have been too cheap for far too long and one has to realize that sooner or later the piper has to be paid his due. I think the game is better as there are more choices and more comforts offered these days. I realize I am an SE and can pay a little more than some but I rarely buy and J,Z,C or D class fares and only do so when my stay is going to be just a few days.
     
  9. YULtide

    YULtide Gold Member

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    I'm not exactly playing the fare game, but I do travel to Asia every year for personal reasons and I have limits on how much I can afford to pay. Two years ago I booked a ticket for two for about $2400 to HKG. Last year the same ticket (albeit for a shorter distance) was running $4200. This year the best on offer just now is $5700. I can wait in the hope of getting a better fare closer in, and run the risk that the plane will be full or the fare won't come down, or I can book an a Star Alliance partner. Last year it was United for $1900. I have to say that the experience was not enjoyable in the least, so I'm looking at other options this year. But we won't be paying $5700 to Air Canada.
     
  10. I'm not sure where you are getting fares like that. I just booked a trip to PVG next week returning from HKG and the flex fares were listed at about $3500 RT. There was tango fare in there at a much lower price.
     
  11. tomh009
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    tomh009 Gold Member

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    I know the flights are full. But my point was that they were still selling Tango fares six days before departure, which makes no sense to me. Normal airline business model would say that cheap fares disappear first.

    The game is not as much fun as it used to be when your employer expects you to fly YYZ-NRT on the cheapest fare available.

    I am fully in agreement that airlines need to be profitable. But the gap between Tango and Flex fares to Asia is just enormous, just to get full mileage credit and a chance at an upgrade.

    He was quoting a fare for two people. And I believe he's comparing fares that provide full mileage credit.
     
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  12. 1. Each fare bucket stands alone. if people are buying Flex and up then T fares will stay there until the higher fares are sold and then they move the T fares upward. Asian flights are well known for lots of last minute bookings.
    2. I think its the employer who needs a wake up call. T fares are designed for leisure travellers. If you are travelling on business your employer should allow you a chance at an upgrade. maybe you should refuse to travel that far unless they let you fly on decent (upgradable) fare buckets.
     
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  13. tomh009
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    tomh009 Gold Member

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    I was monitoring fare availability and AC actually released more seats into the Tango buckets. There must be some logic to it but I can't see it.

    I agree with "should". And many of our customers allow J fares on flights over 5h or so, so I know what I'm missing. But when an employer has 100K+ employees they sadly tend to have rather inflexible policies.
     
  14. YULtide

    YULtide Gold Member

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    Yup. Refuse to travel in a T fare, and then let the employer fire your ass and hire someone who won't be so uppity.
     
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  15. YULtide

    YULtide Gold Member

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    As tom009 noted that's for two people and in flex. I notice today I can manage that for $4600. Still not affordable, which will push me to another carrier. It's a game.
     
  16. AC is not losing at that game. Their flights are full with people who do pay those fares.

    A random sample:
    Review your itinerary
    AC103
    Toronto, Pearson Int'l (YYZ)
    Terminal 1
    Vancouver, Vancouver Int'l (YVR)
    Terminal M
    Sat 06-Jul
    07:00
    09:07
    0
    19hr25
    321
    Tango, N
    F
    AC025
    Vancouver, Vancouver Int'l (YVR)
    Terminal M
    Shanghai, Pu Dong (PVG)
    Terminal 2
    Sat 06-Jul
    11:15
    14:25
    +1 day
    0
    763
    Tango, L
    M,L
    AC026
    Shanghai, Pu Dong (PVG)
    Terminal 2
    Vancouver, Vancouver Int'l (YVR)
    Terminal M
    Sat 13-Jul
    15:55
    11:55
    0
    17hr03
    763
    Tango, T
    M,B
    AC1136
    Vancouver, Vancouver Int'l (YVR)
    Terminal M
    Toronto, Pearson Int'l (YYZ)
    Terminal 1
    Sat 13-Jul
    13:30
    20:58
    0
    763
    Tango, N
    F
    All Onboard Café purchases made on board Air Canada flights are payable only with Visa, MasterCard and American Express credit cards.

    Review final quote details
    Fare Summary

    Total charge for 1 adult
    Air Transportation Charges
    Base Fare (including surcharges)
    1829.00
    Taxes, Fees and Charges
    69.28
    Grand Total - Canadian dollars
    $1898.28
    Details
    for informational purpose only
     
  17. tomh009
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    tomh009 Gold Member

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    The flights are full with people who do pay some fares. Not necessarily the Flex that YULtide and I are talking about, and which costs $1000-2000 more than a Tango. My gut feel is that most people are buying the Tango fares, but of course I have no data to back that up.

    I'm not sure what your "random sample" was intended to illustrate, though.
     
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  18. I'm sure the Tango fares are there to keep AC competitive until such time as they can have purely leisure flights and use the 787's on higher revenue per seat flights. Just my thought at this point in time because the situation is very fluid with all airlines these days.

    They do sell a lot of full fare J,Z and C fare tickets as well as latitude on Asian flights. On some flights I'm told that over 60% of the J cabin is full fare paid. Any fare under latitude hasn't much chance of an upgrade most days.
     
  19. chaptwo
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    chaptwo Silver Member

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    One has to count on a tremendous number of Asian students like on the West Coast as well as leisure travelers who don't care about mileage. They're willing to buy T and they do. For them, it's about doing it on the cheap. For those who need Flex, we buy it.
     
  20. The Lev
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    The Lev Silver Member

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    You are right that they "stand alone" but not likely in the way you intend. I think the OP was pointing out that AC has put more restrictive rules on lower Flex fare buckets (i.e. they disappear at specific times prior to departure while low fare buckets remain in place for Tango.) This is almost certainly not because too many people have bought Flex. Case in point, I leave tomorrow for Japan and did a dummy booking on AC.com. Tango fare is available for ~$800 while Flex fare is within $200 of Latitude. A check of the seat map shows the back sections almost completely filled, while the first Y section has lots of space - a good proxy to indicate few Flex tickets were sold since they would generally be bought by status pax who would have access to that cabin. Of course J=0, so it's not because everyone got moved forward.

    The maximum number of J seats on an Air Canada aircraft is 42. Do you seriously believe that on a typical flight to NRT, PVG or HKG there are 42 or fewer people flying on business? Give the heads a shake. Reality is that the majority of companies out there today have a lowest Y policy. Might not be fun, but it is what it is. If your employer/client allows J or T+, count yourself fortunate.
     
  21. I certainly wasn't suggesting that a J fare policy is required but certainly a flex fare or now premium economy is justified if the employee is expected to work upon landing. BTW most Asian flights have about 50% upgrades in the J seats. Not all, especially HKG, are that open. I had no issue getting upgrades on two recent flights to china,flying B class.
     
  22. BlondeBomber
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    BlondeBomber Silver Member

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    In the early 2000s when I was working in China a lot, I regularly paid $1200-1800 for V and H fares (upgradeable then) and at least once 2800 so I don't think the current fares are at all out of line. We have gotten used to unbelievably cheap travel. Fuel has gone up considerably as have wages.
     
  23. I just returned from China last week on a Z fare of $4400 ex YYZ and I thought that was very reasonable considering the flex fare on offer was just over $2K. Trip was YYZ/HKG/PEK/YYZ. Domestic fares in china not included.
     
  24. The Lev
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    The Lev Silver Member

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    Not so sure about wages - AC has done a lot to bring its wage/benefit cost down over the last number of years.
     
  25. Wages have gone up with regards to their current pension payments which are direct costs and part of the overhead burdens they carry. They do have additional time to pay off their past deficit in the hope markets will recover sufficiently which is now a corporate debt. But the need to get older employees moved into their pension has accelerated with many offers of early retirement bonuses being floated for FA's and counter/gate agents/concierges,etc. who have over 30/35 years of service.
     

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