Neha Jain: http://canadaaviationnews.blogspot.com/ m 12

Commuters stranded by the earthquake in Japan watch TV news at a Tokyo railway station Friday.

1. Travel delays in Canada after Japan quake
Tsunami warnings following Japan's massive earthquake were causing flight delays and confusion at Canadian airports on Friday.

Airlines told passengers to expect delays and cancellations of some international destinations as a tsunami threat moved across the Pacific Ocean.

Air Canada cancelled its flights to Japan on Friday as a result of the closure of Narita International Airport in Tokyo. At about 7 p.m. ET the airline announced that Tokyo flights would resume Saturday.

Montrealer Chantal Ianniciello was booked on a US Airways flight to Hawaii via the U.S. mainland on Friday morning. She said everything has been put on hold.

"Right now, they're not sure they're going to fly the planes to Hawaii," Ianicello said in an interview from Montreal's Trudeau International Airport.

"That is not just for US Airways. That's for Air Canada and all the other companies."

Air Canada also posted a travel alert on its website warning of delays or cancellations in flights through Hawaii and Sydney, Australia.

2. A pilot’s quest to remain at the top

The trouble is that he will turn 60 in April, and under the collective agreement between the airline and the Air Canada Pilots Association, he will be forced out of his job on May 1.

In this latest chapter in the long-running battle over the airline’s controversial mandatory-retirement policy, Mr. Ennis filed a complaint Friday with the Canada Industrial Relations Board, arguing that the union is declining to represent him in his quest to stay No. 1 at Air Canada until he turns 65.

Seniority is crucial because it determines which pilots win better-paid assignments on larger planes, and sets priorities for vacation time.

Knowing that Air Canada’s mandatory-retirement rule won’t be changing any time soon, Mr. Ennis has landed a job with Istanbul-based Turkish Airlines. He will start May 2, one day after he is formally removed from Air Canada’s pilot seniority list.

For Mr. Ennis, the assignment with Turkish Airlines will be a step down in pay and prestige, but he is adamant about working beyond 60. “My first choice is to stay with Air Canada,” he said in an interview from his home in Oakville, Ont., before heading for a workout at a local gym. “I’m in good shape. Everybody says I don’t look like I’m turning 60, for sure.”

3. American Airlines again bumps up airfares

American made the price change Wednesday. It also raised round-trip fares to Canada and Hawaii by $20.
It's uncertain whether other major airlines will follow American's lead going into the weekend. Carriers have been boosting fares in lockstep this year to try to keep pace with the rising cost of jet fuel. Occasionally, a price increase has been abandoned when other carriers haven't matched.
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Most recent fare increases have stuck, however, and the rapidly rising cost of airline tickets mirrors 2008, the last time oil prices soared above $100 a barrel, says Rick Seaney of FareCompare.com, who closely monitors ticket prices.
"Airlines who finally started making a profit late last year have little choice but to pass on fuel costs to consumers in the short term," says Seaney, who expects airlines to try to boost fares weekly through April.
Demand for air travel is high, airline analysts say, as more corporate fliers return to the skies and leisure travelers plan trips for spring break, spring holidays and summer vacation.
"Consumers have a higher threshold of pain for pricier tickets today as the economy recuperates than they did in March of 2008 as a global economic meltdown was afoot," Seaney says.
But Matthew Jacob, senior airline analyst at ITG Investment Research, says that while the rising cost of fuel may be making airlines more aggressive in raising prices, their goal is always to charge as much as they can for seats on their planes.
"It's not just because oil prices are high that they're focusing on getting the highest airfares they can," he says. "This is a business that has always had very dynamic pricing. You can book a flight now and pay a different price than someone who booked it yesterday and more than someone who books it tomorrow."
The same rising oil costs that are denting the airline industry could also force some people to put off travel and stay put.
"One thing that could be a speed bump to raising airfares further is if consumer travelers start to see their income pinched by ... higher gasoline prices," Jacob says. "Higher oil prices may make the airlines more aggressive, but fliers are not necessarily going to be willing to pay a higher airfare."

4. Porter 'pleased' with competition on island airport

Porter Airlines is brushing off concerns the impending return of Air Canada flights out of Toronto's island airport will force it out of business.

In fact the upstart airline, represented by a roguish raccoon, says it welcomes the competition. Porter will gain from the fees other airlines will be obliged to pay its parent company, Porter Aviation Holdings Inc., which owns the terminal building at Billy Bishop Toronto City Airport.

“We're actually pleased that other carriers are coming aboard now that Porter's made the airport viable for them to serve,” Porter president and CEO Robert Deluce said. “We're used to competing directly with Air Canada whether it's from Pearson, where they also serve the same market, or from other airports, Ottawa, Montreal and elsewhere, where our check-in counters are right next to theirs.”

Deluce said Porter also hopes to gain customers. Many Air Canada passengers have never flown out of Billy Bishop, he explained. Once those people are drawn into the executive-style lounge, with its comfortable leather chairs and cappuccino machines, they'll be persuaded to use Porter for flights to other destinations — such as Boston and Chicago — that Air Canada currently only services through Pearson.

“Chances are pretty good we'll converge some of those passengers over to loyal Porter fans along the way,” Deluce said.

Airline analyst Fred Lazar said Air Canada's arrival could be positive for Porter: “Air Canada will do well there and for Porter it's another source of revenues and increased exposure.”

But other industry experts aren't so confident Porter can compete.

“There is no question that Air Canada will try to eat Porter's lunch,” said Ramy Elitzur, an airline industry expert with the University of Toronto's Rotman School of Management. “Part of this is predatory with respect to competition, which is a legitimate reason.”

Air Canada has a history of loading up on certain routes and dropping prices to compete with smaller upstarts. It has been accused of driving several airlines out of business.

“It put CanJet out of business with that strategy, lowering prices below the level where CanJet could retaliate,” agreed analyst Joe D'Cruz. (CanJet stopped its scheduled service in 2006 but continues to fly as a charter airline.)

D'Cruz, a professor with University of Toronto, said discount carrier Jetsgo was facing similar price competition from Air Canada when it went out of business on March 11, 2005.

“There's a whole string of airlines which have failed because Air Canada retaliated with price,” said.

Regional carrier City Express operated flights to Ottawa, Montreal, and Newark, N.J., from Toronto's island airport in the '80s. From 1984 to 1990 it flew about 1.5 million passengers to and from the downtown core. At its peak it had 13 aircraft and a staff of 350.

But City Express eventually went under, filing for bankruptcy in 1991 — only a year after Air Canada's regional carrier, Air Ontario, began flying out of the island airport — due to heavy debt, unpaid federal taxes, rising fuel costs, a recession, and the success of its competitor.

The difference this time around is that Porter is a strong company, explained Lazar, an airline expert at York University. He added Air Canada has never been found to have violated competition laws.

“I don't think it's going to be negative,” he said. “(Air Canada) is not going to be able to undercut Porter's prices. They'll be able to match them but they won't be able to undercut them.”

He said four-year-old Porter is now a respected airline with a fleet of 20 aircraft, a solid business model and strong management. Free beer and wine on board doesn't hurt, although it's a service Air Canada plans to copy on its flights out of Billy Bishop.

By
Neha Jain

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