Air Canada in Asia: seeking JVs as up-gauging/density drives growth, with limited frequency increase
Developments in the Asia-North America market have been dominated in recent times by the growth of US airlines (American Airlines in Asia, Delta’s Seattle hub, United’s secondary China network), partnerships (Japan JVs, Delta’s flirtations with Korean Air and Skymark) and the greater presence of Asian carriers (ANA, Cathay, EVA and mainland Chinese carriers).
Air Canada is also making its move. Its growth may appear more subdued. This is because frequency growth has only been 15%; but RPKs have grown 46% (and ASKs 43%) due to up-gauging to larger aircraft, deploying more dense configurations (as on its 777-300ER fleet) and improving load factors. Air Canada would like frequency growth in Beijing and Shanghai, but has been unable to obtain commercially viable slots – even though American and Delta have in recent times.
Air Canada is still working through a JV with Star partner Air China and is looking for more partnership opportunities, including JVs. ANA is interested in bringing Air Canada into its trans-Pacific JV with United, but United is not so inclined. Air Canada would like to see partnerships develop better offline coverage, as it does not anticipate launching new Asian destinations. Another longer term objective is building up its sixth freedom strategy, which is so far concentrated on the US-European market.
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