Air Canada expansion benefits Kelowna, though additional service is no guarantee
After Wednesday's announcement Air Canada Rouge, the airline's new low-cost, leisure carrier, will start flights out of Vancouver, the company had its executives in Kelowna Thursday, speaking to the Thompson Okanagan Tourism Association.
The airline flew 650,000 people out of the region last year from airports in Kamloops, Kelowna and Penticton, and has increased its capacity in the Okanagan by seven per cent over the course of the last two years, or 80,000 seats in the month of July.
But as Kevin Howlett, vice-president of regional markets, told those gathered at the Four Points Sheraton for the luncheon, consistent profitability has eluded the carrier over the last decade and recovery means it cannot dole out flights to cities that come calling.
"Like all communities we serve, the three airports in this region are keen on additional direct service to and from their airport, and they do so for many reasons, not the least of which is the proven linkage between air connectivity and economic development," said Howlett. "…As an airline, while we have an unlimited number of route opportunities before us, we have a practical limitation—and that is resources and equipment."
Noting that profit margins in the industry overall average a meagre 1.8 per cent, he touched on the cost troubles, largely personnel related, before explaining how the executive team has stopped the bleeding.
When CEO Calin Rovinescu took over four years ago, the carrier adopted an aggressive business strategy focused on financial restructuring and an employee culture shift. Its leadership has put personal responsibility at the top of the agenda.
"Last month, we released our best annual results in our history, which indicates our recover is working," Howlett said.
Delivering service on time is now a priority for every employee and the company is adding new planes to its fleet, including the world's largest twin jet, the Boeing 777, to increase efficiency.
An overhaul of its pension program and expansion targeted at making the airline one of the top 20 in the world have also boosted profits.
"We operate in one of the most labour intensive and expensive industries in the world," said Howlett.
- Air Canada employs 5500 people in B.C.
- the company has more flights than any other airline in Canada
- in 2014 the carrier will fly almost 35 million passengers, or 100,000 daily