CANADA: WestJet Airlines And Scoop Accused Of Predatory Pricing

The Federal Court of Canada has ordered a second senior employee at WestJet Airlines Ltd. to testify under oath in a predatory pricing investigation into WestJet and its budget subsidiary, Swoop, by Canada's competition watchdog.

The inquiry, launched by the Competition Bureau in the fall, concerns allegations the two airlines used anti-competitive practices to crowd out B.C.-based upstart Flair Airlines from at least three routes last year.

Federal Court Chief Justice Paul Crampton has ordered WestJet corporate planning manager Michael Claeren to be examined by Canada's commissioner of competition, citing Claeren's former role as a senior leader of revenue and pricing at Swoop.

He is set to appear next month alongside WestJet vice-president John Weatherill, who the Federal Court previously ordered to come before a presiding officer to explain the airline's tactics.

The commissioner launched the inquiry to investigate allegations the parties have abused their dominant position in the provision of air transportation services by engaging in predatory pricing practices on certain routes in Canada, according to a March 27 affidavit from Xavier Mercier, a senior officer at the Competition Bureau.

Flair alleges predatory pricing cost airline $10 million.

Predatory pricing is when a company offers services below break even costs to hobble a competitor, along with an expectation to recoup losses through future price hikes, according to Competition Bureau guidelines.

In this case the accusation applies to routes between Edmonton and the cities of Abbotsford, B.C., Hamilton, Ont., and Winnipeg. On the Hamilton route, Swoop advertised all-inclusive fares for as low as $69 starting last June, court filings state.

Flair Airlines chief executive Jim Scott has said the strategy cost his ultra-low-cost carrier about $10 million between mid-June and mid-October, placing it in jeopardy.

WestJet has said it is compiling information in response to the probe, which has seen piles of court ordered documents and data from the two Calgary based airlines handed over to the Competition Bureau.

Air Canada and WestJet control about 90 per cent of the domestic market and 70 per cent of the transborder market, says David Tyerman, an industry consultant who works with Enerjet, a charter airline aiming to launch as a budget carrier this year.

WestJet's attempts to retain control over ultra low cost flights amount to a pretty aggressive attempt to protect market share and keep new entrants out of the market, Tyerman said in an interview.

The accusation applies to routes between Edmonton and the cities of Abbotsford, B.C., Hamilton, Ont., and Winnipeg. On the Hamilton route, Swoop advertised all-inclusive fares for as low as $69 starting last June, court filings state.

The business models of Canada's two largest airlines make ultra-low pricing on certain routes without incurring a loss tough to fathom, he said, pointing to the cost of premium seating and lounges.

Both Air Canada and WestJet have limited their budget products to certain markets to avoid cannibalizing most of their full-price markets.

It seems unlikely that Swoop and Rouge can achieve truly lowest costs, given labour costs at the incumbents and other potential cost differentials, Tyerman said in an email.

He also noted the Competition Bureau does not have a mandated time frame for the WestJet investigation and called for prompt enforcement of anti-competitive rules.


Tourism Observer

CANADA: 90,000 Visitors From China Expected In Alberta

Businesses in Banff are busy preparing for a new generation of tourists from China.

More Chinese millennials than ever are travelling — and Travel Alberta is organizing workshops for hundreds of hotel and restaurant staff across the province to be ready for them.

"We know millennials will outpace any other group," said an American hospitality trainer Daniel Crain, speaking ahead of a workshop in Banff on Thursday, following sessions in Edmonton and Calgary.

"The group travel will never go away, but the millennials are really taking over," Crain said.

Travel Alberta says the province can expect around 90,000 visitors from China this year. That's about 50 per cent more than a few years ago.

Unlike their parents, Crain says the millennials want rental cars rather than tour buses, and constant Wi-Fi access with clear instructions.

And social media is how to connect with Chinese tourists these days, he added.

"That is how everything is happening, and that is the way that this group is definitely going to travel. It's usually couples — more married than not married. These are not the party people that are coming for a good time. They're coming here to have an experience."

They're also more likely to want to do outdoor sports and share their experiences with friends back home through social media.

"We're seeing skiing — a lot of skiing — because of the 2022 Olympics.

Canada has a great opportunity because lots of Chinese students are coming here to learn how to be ski instructors and going back to China," said Crain.

The average stay is six to nine nights.

SOUTH AFRICA: Air Canada Flies 300 South African Firefighters To Assist With Alberta Wild Fire

Air Canada flight AC7007 departed O.R. Tambo International Airport in Johannesburg, South Africa early today en route to Edmonton, Alberta with 300 South African firefighters on board.　 It is carrying the largest number of wildland firefighters ever brought into Canada.

The Air Canada Boeing 777-200LR is carrying firefighters from South Africa's Working on Fire Program (www.workingonfire.org) who will assist in firefighting efforts underway in Northern Alberta. It is also that organization's largest-ever deployment.

"Air Canada's employees have once again risen to the challenge to make this mission possible," said Marcel Forget, Senior Vice President, Commercial Strategy, whose responsibilities include the airline's network planning and scheduling. "This is the first time Air Canada has operated into South Africa, which also required rescheduling flights to make one of our largest aircraft available in order to accommodate this request.　

We are extremely honoured to be able to support the firefighting underway in Northern Alberta, and on behalf of all Air Canada employees, I sincerely thank the men and women of the Working on Fire program for the invaluable contribution they will make on the ground."

"We are proud of our South African fire fighters from our Working on Fire programme and we no doubt believe that they will do us proud to provide these essential services to Canada," said Llewellyn Pillay, Managing Director, Working on Fire. "We are immensely proud of the fact that the international firefighting community has recognised the skills and expertise within Working on Fire to provide essential integrated fire management services at an international level.

We are grateful also for this partnership between CIFFC and for the contribution of Air Canada in bringing our fire fighters safely to Canada."

"On behalf of the Canadian Wildland Fire Community we offer our gratitude and thanks to Air Canada for helping transport the South African Firefighters to Alberta," said Kim Connors, Executive Director, Canadian Interagency Forest Fire Centre. "This mobilization represents the largest group of wildland firefighters ever brought into Canada. Air Canada's willingness to make such a large aircraft available is greatly appreciated."

Air Canada is operating this flight on behalf of the Canadian Interagency Forest Fire Centre (www.ciffc.ca) in cooperation with the Alberta Government with 17 Air Canada crew members on board. Flight 7007 will make a brief stop in Barbados for refueling and change of crew before arriving in Edmonton Sunday evening, 22 hours after departing South Africa.

Delta To Add Seattle/Tacoma – Edmonton Flight

Delta Air Lines (Atlanta) continues to build up its Seattle-Tacoma International Airport (SEA) hub. The carrier will add daily Delta Connection Bombardier CRJ700 jet service from SEA to Edmonton, Alberta per Airline Route.