I agree with Akash that there are barriers to entering the low cost airline market in Canada. With West Jet, whose business model is set up for a low cost operator, a large portion of market share have already been occupied. Air Canada already has several sub branches including Jazz and Star Alliance operating smaller aircrafts for routes within Canada.

I would vote no to the proposal because Air Canada’s business model is to operate on a large international based scale. Fundamentally, the demand for low cost airfares is there, but considering the existing competition specializing in operating a small scale airline, I think Air Canada should look beyond its borders and expand its routes internationally instead. Especially with the new Boeing 787 jetliners coming into service in two years, Air Canada will have a larger fleet of mid-large sized jetliners having the ability to fly greater distances to international hubs.

In addition to the new fleet, if the worker’s union is not in support with the proposal, a strike may be held and flight operations will be affected once again. Air Canada have had financial and employee problems in recent years.This will lead to poor customer service and possibly a decrease in air travelers selecting Air Canada. As a national airline, Air Canada must expand to compete internationally, not downsize.

Links: Air Canada union shuns discount carrier proposal, Akash Patel’s Blog

Photo: Google.ca