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Canada aviation: Air Canada and WestJet blur the FSC and LCC lines

Premium Analysis

Canada’s two largest airlines – Air Canada and WestJet – have well documented strategies in combating the potential threat from aspiring ULCCs that have been attempting to break into the market for quite some time.

Air Canada is using its low cost unit Rouge on some domestic routes and bolstering its fare options, while WestJet has debuted its own low cost subsidiary Swoop. For now, the only other ULCC operating in the Canadian market is Flair Airlines, but Jetlines aims to launch in 2019.

Air Canada and WestJet are also adopting new tactics in the management of their respective regional networks. Air Canada is testing the new flexibility it has with Rouge to operate on routes presently operated by its regional partners. The airline has no drastic changes planned for its regional operations; however, as Air Canada continues its quest to lower costs, the ability to deploy Rouge in regional markets could become an attractive option and negotiating tool with its regional partners.

WestJet has opted to add a new regional partner operating Saab 340 turboprops and is signalling that additional contract flying could be on the horizon.

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