Syphax Airlines, a new carrier founded by a businessman from Sfax (Tunisia), is expected to launch in May-2012 (air-journal.fr, 17-Aug-2011). The carrier is currently waiting on government authorisation to commence official activities, and plans to operate out of Sfax Thyna Airport. It will initially operate two A319 aircraft, which have already been ordered. Its network will reportedly include a daily service to Paris, Rome and Tripoli, as well as twice weekly services to Marseille, Lyon, Nice, Casablanca, Istanbul and Benghazi. It will compete with national carrier, Tunisiar.
Syphax Airlines to launch in May-2012
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Air Canada bulks up capacity for the high season as long term labour stability improves
Air Canada continues to hold a positive outlook for the North American summer high season since the bulk of its capacity is pegged to international markets, including long haul trans-Atlantic and trans-Pacific routes. International expansion remains the airline’s most important priority as it is attempting to build a long haul network that rivals its large global airline counterparts in the US.
The airline also continues to drive sixth freedom traffic flows from the US, with the goal of doubling its market share among those passengers over the next couple of years. Air Canada has also subtly capitalised on the anti-Trump sentiment in the US by creating a smart campaign urging US citizens to “test drive” Canada before picking up and moving to the country.
Counter to some large US airlines that are facing tough labour negotiations, Air Canada is enjoying a period of employee stability as all of its major labour groups are now under long-term contracts. The longevity of those agreements allows Air Canada a degree of certainty in labour expense that some of its US peers do not enjoy.
Air Canada Part 1: low cost rouge is a pillar of growth; but further expansion might be constrained
During the past year Air Canada has found itself defending its double-digit capacity growth, stressing that 90% of its capacity in 2015, 2016 and 2017 is being deployed to its international network – an entity the company believes is far from reaching maturity. Recently the airline has outlined plans to introduce a raft of new long haul flights to Europe and Asia operated by Air Canada mainline and its low cost arm – Air Canada rouge.
Air Canada stresses the pillars of its international expansion – Boeing 787 widebodies and the establishment of its low cost subsidiary rouge – enable the company to enter international markets it once considered unviable due to higher costs. During the summer of 2018 rouge will nearly reach its 50 aircraft cap, and Air Canada needs to start determining if there are further opportunities to grow its low cost unit. Those evaluations will partially dictate Air Canada’s overall growth levels beyond 2018.
In the short term Air Canada is not seeing any broad changes in consumer behaviour, reflected in its solid booking curves. Weaker markets in Western Canada, hit by the downturn in the oil sector, are stabilising as capacity cuts have resulted in a rational supply-demand scenario.
This is Part 1 in a two part series on Air Canada. The second instalment will focus on the airline’s costs and balance sheet management.