The Magna Carta, frequently cited as “The Great Charter”, has long been regarded as one of the most significant historical documents in existence. It seems fitting that a document, which sought to reign-in the role of the monarchy, could describe the actions made by a modest Canadian air carrier. The operational successes achieved by Air Transat (IATA: TS) serve as a reminder to Air Canada that budget vacationers cannot be ignored. In response, Air Canada and WestJet have set up their own “Vacation” divisions to compete with Transat Vacations. Despite losing a portion of their business to the competition, Transat Vacations continues to appeal to those seeking “All Inclusive” packages and group vacations.
Taking to the skies in 1987, Air Transat has quietly grown its market share in Canada’s toxic aviation market. In line with its parent company Transat Vacations, Air Transat targeted vacation travelers and Canada’s famous “Snowbird” demographic. Under somewhat fortuitous circumstances, the carrier was able to grow without the threat of major competition. In the late 1980’s charter operations in Canada were on the decline. Nationair and Wardair, Canada’s 2 major charter operators, were rapidly downsizing their networks. Nationair ceased operations in 1993, paying the price for its high profile accident in Jeddah, while Wardair merged operations with Canadian Pacific and Pacific Western Airlines, eventually re-branding as Canadian Airlines. Air Transat was presented with a golden opportunity to grow its market share in Canada’s “Vacation” market.
As Air Canada, Canadian, and newcomer WestJet fought over domestic and business travel in the late 90’s, Air Transat was able to use scale and momentum to ward off halfhearted charter competition from Canada 3000 and Royal Aviation. In the past few years, the carrier has responded to lower fuel prices by launching domestic service between select Canadian markets in an effort to grow feeder traffic and develop greater market share. Air Transat has been able to capitalize on the cost savings associated with vertical integration to become Canada’s third largest air carrier.
As Air Transat celebrates 30 years of continuous operations, the carrier has already started planning for the next 30 years. As mentioned above, their decision to launch domestic flights between select markets appears to be successful. While I cannot speak to the airline’s financial returns, the concept of developing “feeder traffic” through domestic operations makes sense (from an outside perspective).
On a recent trip to Calgary, I noticed that in addition to the many daily flights offered by AC and WJA, Air Transat had an early morning service. Digging deeper, I discovered very reasonable return fares between YVR and YYC, marginally lower than AC and WJA. Unfortunately, the flights are only seasonal and for my upcoming trip, I was unable to book with Transat.
With minimal expectations for an economy class seat and a desire to find cheap flights without having to drive to Abbotsford (80Km from YVR), I’ll have to consider Air Transat as a viable option.
With the limited information available to me, I can only speculate that financial returns continue to justify the operations. Additionally, without proper MIDT Data, it is hard to comment on whether the additions have resulted in an increase in connecting traffic. However, should the price of fuel continue to remain low, AT’s efforts to grow a presence in Western Canada and build up market share should be applauded.
Concluding our look at Air Transat’s 30th Aniversary, the follow-up segment will focus on the carrier’s new livery (which launched on November 13th) and the airline’s plans to lease 10 Airbus A-321 LR (Long Range) aircraft starting in 2019.