More than a feeling? Hitch a ride on Air Canada’s new service to Boston!

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With 120 seats in a 14J/106Y configuration, the Airbus A-319 allows Air Canada to offer a premium product without excess capacity. (Photo: John Jamieson, KSFO, OCT 19/2016)

Over the past 16 months, YVR has been one of the fastest growing airports in Canada. Recently, the airport has become known for its rapidly growing Asian network, widely regarded as one of the strongest in North America. Unbeknownst to many, Air Canada and its subsidiaries have made significant additions to YVR’s transborder network. By carefully analyzing the US Market, Air Canada has taken a strategic approach to their networking. For example, they have started limiting their mainline operations to high yield markets with a steady business flow.

NOTE: when I mention mainline operations, I will be including Air Canada’s CRJ-705 routes operated by their Express brand. These flights fall under a grey area. Despite technically being “regional” operations, the CRJ 705 provides a multi-class product. As such, I’ve chosen to include them under the “mainline” classification.

In Vancouver, many of the new routes added to the US are being operated by AC’s low-cost subsidiary Rouge. Launched in 2012, Rouge caters to vacation travelers who tend to exhibit high price elasticity for low fares. It’s understandable, given Vancouver’s wealthy demographic, that Rouge should grow in a region where significant disposable income exists to support vacation markets.

While many of Rouge‘s destinations generate excitement among the public due to their “touristy” nature (Honolulu, Las Vegas, etc), the mainline additions of Dallas-Fort Worth and San Jose are far more interesting to discuss from a business point of view. When Air Canada announced that they were adding mainline service to Boston, a business-oriented market with limited “interline” connections, it fueled discussions about other potential mainline connections to the United States. If Air Canada believe they have found a way of making a profit on direct flights, could this lead to further connections to the United States?

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It’s worth noting that Air Canada has chosen to serve both Boston and Dallas with “mainline” service as opposed to Rouge; the higher volume of business traffic (relative to leisure travelers) is likely the reason behind the carrier’s decision. (Photo: Aug 13/2016, YVR, John Jamieson)

All of Air Canada’s new mainline routes (Boston, Dallas, San Jose) serve destinations which would have previously required a one-stop connection.  In the past when Air Canada chose to serve a US Origin and Destination (O&D) Market it relied on its Star Alliance partner United Airlines.  Why are we suddenly seeing a surge in direct flights to secondary markets?

In Vancouver, Air Canada, its codeshare and joint venture partners, and a handful of Asian carriers offer connecting passengers a variety of options when traveling to Asia. As mentioned above, the airport is becoming increasingly known for its strong Asian network. It boasts the most direct flights to China in North America while also serving Korea, Japan, the Philippines and Hong Kong on a daily basis. Through the airports Connect YVR program, Vancouver has positioned itself as a convenient transit-hub compared to Los Angeles or San Francisco; the airport still competes with Seattle, however, YVR offers more flights to China than SEA. Having thus explained why passengers would choose Vancouver flight, why did AC choose Boston?

From a geographic point of view, Boston is a major urban area with a rapidly growing economy. The area is home to a number of prestigious academic institutions, technology start-ups, and financial companies, and has recently become an appealing tourist destination. As evident by the recent growth at Boston Logan International Airport, the region is growing in international importance. Currently the airport offers strong connections to Europe and a handful of flights to the Middle East and Central America, on top of Jet Blue’s strong domestic network; however, the airport is lacking in convenient connections to Asia. By connecting into Vancouver’s strong Pan-Asian hub, Boston based passengers can now save time connecting through to Asia. Can this strategy be used to bring other Eastern Seaboard markets on board?

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A typical mid-day scene at YVR’s international terminal; the Boston-YVR flight is expected to allow arriving passengers the chance to connect onto one of the airport’s Asian bound flights. (Photo: John Jamieson, May 01,/017, YVR)

This question intrigued me. I spent some time brainstorming other east coast cities which could benefit from a connection to Vancouver. To do this properly I’d need to have access to YVR’s MIDT data. MITD data is extremely valuable for route planners as it shows the number of passengers connecting through the YVR relative to those terminating in Vancouver. However, since I lacked access to such data, I considered destinations based on potential ties to YVR and an analysis of the airport and the surrounding region.

Philadelphia: Alpha City, located between NY and Washington DC with a strong cultural heritage. Philadelphia is home to a number of Fortune 500 companies and recognized Universities. The Airport, a former US Airways stronghold, has seen a gradual decline in importance since the US Airways/American merger. While continuing to serve a number of destinations in Europe and the Middle East, the airport is a connection away from Asia.

Charlotte: 175 miles Inland from the Southern Atlantic Coast, Charlotte is a gamma-plus city with a strong history in banking, motorsports, and energy. Charlotte-Douglas International acted as a regional hub for US Airways before becoming American’s East Coast Hub. While the Airport still offers a number of international connections to Europe, like Philadelphia, Charlotte passengers lack a direct link to Asia and require a connection in Los Angeles or Dallas.

Atlanta: The 9th largest metropolitan area in the United States boasts the busiest airport in the world. Hartsfield-Jackson International has held the title since 1998 and in 2016 saw 104 Million Passengers transit through the airport. A mega-hub for Delta Airlines, Vancouver has only ever experienced seasonal service to Atlanta. In terms of onward connections, the airport is largely a domestic hub; however, there are a number of Skyteam connections available to international destinations. From a geographical point of view, Vancouver could market itself as an option for Asia-bound passengers; however, Delta’s recent efforts to grow its hub in Seattle and boost Asian partnerships through joint ventures, reduce the likelihood of launching year-round service to YVR.

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Mainline Delta aircraft are becoming an increasingly rare sight at YVR as regional jets operate on the carrier’s medium length sectors; in the summer Delta operates its 757-200’s on bi-weekly seasonal flights between Atlanta and Vancouver. (Photo: John Jamieson, June 9th/2012, YVR)

Miami: Situated on the Atlantic Ocean an hour east of the famous Florida Everglades, Miami was classified as an Alpha-World City in 2012. The “Cruise Capital of the World” is also home to a number of international banks, multinational companies, and a large concentration of biotech industries. Miami International, Dade County’s largest international airport, is a former Eastern Airlines hub and now serves as American Airlines primary gateway to Latin America. According to anna.aero the YVR-MIA traffic market has grown to nearly 100,000 passengers annually. Can the volume justify a direct flight on a mainline carrier? To me, this is where I’m skeptical. There are already sufficient frequencies to Houston and Dallas daily from YVR and convenient connections onward to Miami. If an airline is going to serve MIA from YVR it likely won’t be American as they would preferably route passengers through one of their hubs. While I don’t think Air Canada will serve Miami on mainline aircraft, this could be a prime destination for Air Canada Rouge to serve with its configured 767’s.

I’d love to hear your opinion on Air Canada’s new route to Boston and, if you feel I’ve missed a potential US Market, feel free to ask why I didn’t include it. Vancouver Airport is in the middle of a major expansion period and it seems like new routes are being launched on a monthly basis. I’m already scanning the forums and aviation websites for any news on new flights to Vancouver; I look forward to covering them in greater depth. Look out for my next Hot Air post which will focus on WestJet’s recent announcements on flights to China and its new low-cost subsidiary.

 

 

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