Canada’s Airlines Part 2: Air Canada works to bolster its international network in 2014

Air Canada begins 2014 on relatively solid footing after taking painful steps during the past few years to thwart a second formal restructuring. It is paring down debt to improve its financial leverage, achieving its liquidity targets and setting ambitious cost reduction goals in order to narrow cost gaps with its domestic rival WestJet.

While Air Canada continues to watch developments in the Canadian domestic market - mainly the introduction of WestJet's new regional carrier Encore - and craft its competitive responses, international service is a major tenet of the carrier's strategy to sustain its positive momentum in 2014. The main pillars of Air Canada's international push are its new low cost carrier rouge, higher density 777-300ERs and the long-awaited arrival of the first of 37 Boeing 787s set to debut on service to Tel Aviv and Tokyo.

Air Canada appears poised to execute both offensive and defensive moves during 2014 as it works to fend off WestJet's encroachment on regional domestic routes and works to optimise and grow its long-haul international network as its rival examines the possibility of increasing competition with Air Canada on long-haul flights. Much like WestJet, Air Canada has a full agenda, but appears now to be in a reasonable position to execute its plans.