Pickering Airport (Transport Canada/GTAA, Proposed)

[kEiThZ]

I can buy the argument.... halfway. As someone noted, frequency matters. When I was commuting to Timmins for business, the availability of flights was an acute concern - both at the home end and at the outer end. Two or three hours of waiting for the next flight was precious time wasted, and sometimes led to more drinks in the airport lounge than I might care to admit ;-). Swapping five departure options for three would have sent shivers up my spine.

Agreed. I was giving an example. Personally, I think three is just fine if timed properly. But practically speaking I think most routes would not see upgauging until 4 rotations per day.

However, cutting 5 departures to 4 and having seat availability in those larger planes might have been OK - and might have led to some seat sales that attracted more customers. So the argument holds without having to go seat to seat.... I'm sure AC will do some flight reduction with its 737 Max's, but also will plan for growth in ridership. That translates to some slots saved at YYZ.

People fixate on places like Sudbury and Timmins. But have a look at Air Canada's services to Boston:

3x E190 with 97 seats
10x E175 with 76 seats

https://flightaware.com/live/findflight?origin=CYYZ&destination=KBOS

This route is exactly the type of route that Air Canada purchased the CSeries for. Replace those 13 flights with 10 rotations of 130-seat A220-300s and you will add nearly 24% more seat capacity while cutting 23% of the frequencies. In reality cutting those 3 flights adds about 21 mins on average to the wait time.

There's a lot of regional routes into the US like this for Air Canada and all the American carriers. Westjet less so, since Encore came much later and is smaller.

 

[kEiThZ]

In fact yes, natural seat growth is prevalent during peak periods,

We aren't talking peak here. AC and Westjet are literally upgauging their whole fleets with individual aircraft being replaced with types that have more seats. For example, AC won't have any aircraft with less than 125 seats at Mainline in 2021, with the retirement of the E190. This is what I was referring to. Not seasonal variation, which is largely just a reallocation of capacity from high demand to low demand destinations by season.

There would also be little challenge for people to drive all the way to that far fetched place called "Pickering" either right? If transborder is that appealing to GTA residents then driving to Pickering would actually save them time due to one less border/customs crossing.

And if they are willing to drive Buffalo, they are also willing to drive Hamilton, which is closer to the entire GTA than Buffalo and closer than Pickering for at least 40% of the GTA.

Again, cutting flight frequencies can mean a huge loss of customers

Who else you going to fly from Sudbury or Sault. Ste. Marie or Timmins or Thunder Bay or North Bay to Pearson? There's a lot of routes where AC has a monopoly or is so dominant that frequency cuts really won't hurt them. And anybody who is very time sensitive and bound for a downtown destination is probably already flying Porter.

Great example for you: Thunder Bay

Jazz: 6x Q400
Encore: 3x Q400
Porter to the Island: 7x Q400

Air Canada could swap six Q400s for four A220-300s and add 11% (52 seats) while cutting slots. They'd still have more slots there than Westjet to Pearson. And the added seats would let them compete with Porter on price. Or heck, do three A223 rotations and two Q400s. One slot saved and 78 seats (16%) capacity added.

You are also presuming that frequency cuts will only impact one airline. That's not how slot allocation works. Each airline figures out the value of the slots and bids and fills them based on their yield math. If an extra flight to Heathrow is worth more than an extra frequency to Soo, you can bet AC will make that trade if they can. If they can save by simply cutting rotations to a destination without significant loss of business, they'll do that.

Why not just send one huge A380 with 800 seats to replace the numerous 787/767/777 combos to LHR?

I am done addressing strawman arguments.

 

[jzair]

We aren't talking peak here. AC and Westjet and literally upgauging their whole fleets with individual aircraft being replaced with types that have more seats. This is what I was referring to. Not seasonal variation, which is largely just a reallocation of capacity.

Upgauging cannot happen fast enough and you simply can't expect to be constantly upgauging every single route. That's why even if AC is able change their aircraft, it can't guarantee future slot availability. Think of it as traffic down a highway: you expand new lanes but you are only inducing new traffic, hence we don't have 12 lane-mega-highways (oh wait).

Who else you going to fly from Sudbury or Sault. Ste. Marie or Timmins or Thunder Bay or North Bay to Pearson? There's a lot of routes where AC has a monopoly or is so dominant that frequency cuts really won't hurt them. And anybody who is very time sensitive and bound for a downtown destination is probably already flying Porter.

Great example for you: Thunder Bay

Jazz: 6x Q400
Encore: 3x Q400
Porter to the Island: 7x Q400

Air Canada could swap six Q400s for four A220-300s and add 11% (52 seats) while cutting slots. They'd still have more slots there than Westjet to Pearson. And they added seats would let them compete with Porter on price.

You have to remember simple things like holding slots at airports can block competitors directly, and that's a common strategy used nowadays. Another thing is as a consumer you really shouldn't be hoping for a monopoly market, and by how you've been describing all these flights it seems that you're okay with AC monopolizing every segment.

Also, using A220s to Thunder Bay to compete with Porter might not be the best for AC as each type of aircraft is essentially already optimized for a certain segment. Q400s are great for these short flights and fuel consumption per seat as well as take off and landing fees are significantly less than a full A220 jet. The point is, you will not see the extinction of props in the near future because some communities are simply not economically viable to be served with larger 100 - seat jets.

 

[kEiThZ]

Upgauging cannot happen fast enough

It can and it is. Just look at AC and Westjet's fleet plans. Every Max 8 replacing an A320 is a 15% increase. Every Max 8 replacing a 73G or an A319 is a 40% increase in seat capacity. Every A223 replacing an E190 is a 35% increase. And on the widebody side, AC replaced 211 seater 767-300s with 298 seater 787-9s, a 40% gain. Their fleets are being upgauged a hell of a lot faster than the population is growing. In part because, it's a generational change in tech. And in part because they are trying to capture new opportunities. But whatever the reason, they are adding a substantial amount of capacity.

You have to remember simple things like holding slots at airports can block competitors directly, and that's a common strategy used nowadays.

I don't get how you can say this and then this like right after:

Another thing is as a consumer you really shouldn't be hoping for a monopoly market, and by how you've been describing all these flights it seems that you're okay with AC monopolizing every segment.

It's not so much that I support their monopoly. I don't. It's that I recognize reality. Westjet is not much interested in competing in the regional market. And until Porter came along, AC had no real regional competition. The only reason Porter can do what they have, is because they are sheltered at YTZ. AC would crush them like a bug at Pearson.

If we're worried about AC monopolizing Pearson, we definitely have an interest in cutting the number of slot available to them, to hopefully make space for new entrants. And they in turn should be planning on operating with fewer slots.

Also, using A220s to Thunder Bay to compete with Porter might not be the best for AC as each type of aircraft is essentially already optimized for a certain segment. Q400s are great for these short flights and fuel consumption per seat as well as take off and landing fees are significantly less than a full A220 jet. The point is, you will not see the extinction of props in the near future because some communities are simply not economically viable to be served with larger 100 - seat jets.

The A220 is quite special in this regard. It's not just another turbofan. With that kind of BPR, it's CASM is competitive with turboprops. Two pilots and two flight attendants for 78 pax vs. two pilots and 3 flight attendants for 130 pax. Have a look at the empty weight per passenger between the two airplanes. The only restriction is the number of frequencies the carriers want to run.

 

[Woodbridge_Heights]

Great example for you: Thunder Bay

Jazz: 6x Q400
Encore: 3x Q400
Porter to the Island: 7x Q400

Air Canada could swap six Q400s for four A220-300s and add 11% (52 seats) while cutting slots. They'd still have more slots there than Westjet to Pearson. And the added seats would let them compete with Porter on price. Or heck, do three A223 rotations and two Q400s. One slot saved and 78 seats (16%) capacity added.

I'll have to say this. If your competition is using the same aircraft as you you probably have the right sized aircraft for the route. Airlines are strange in that they seem to want to run their flights at the same time as their competitors +/- 20 mins. It's so weird you would think they would want to be at different times, instead the competition dictates that you offer a flight at the same time.

But this is just an example and I get what you are trying to say in terms of upgauging.

 

[Woodbridge_Heights]

Upgauging cannot happen fast enough and you simply can't expect to be constantly upgauging every single route. That's why even if AC is able change their aircraft, it can't guarantee future slot availability. Think of it as traffic down a highway: you expand new lanes but you are only inducing new traffic, hence we don't have 12 lane-mega-highways (oh wait).



You have to remember simple things like holding slots at airports can block competitors directly, and that's a common strategy used nowadays. Another thing is as a consumer you really shouldn't be hoping for a monopoly market, and by how you've been describing all these flights it seems that you're okay with AC monopolizing every segment.

Also, using A220s to Thunder Bay to compete with Porter might not be the best for AC as each type of aircraft is essentially already optimized for a certain segment. Q400s are great for these short flights and fuel consumption per seat as well as take off and landing fees are significantly less than a full A220 jet. The point is, you will not see the extinction of props in the near future because some communities are simply not economically viable to be served with larger 100 - seat jets.

Props won't go away fully. They will be redeployed to other markets where the demand is only enough for one daily rotation, and the opportunity cost of taking one aircraft off of an existing (hopefully profitable) and onto this potential route would be too high. With new, larger aircraft deployed onto existing routes, the freed up props and gates will be used to develop other routes.*

See for example the B1900's that were taken out of YYZ but moved to YYC to develop the route network out there.

(*I know that someone will mention that this "won't free up gates" but honest that's how most growth happens in most airports. A slot/aircraft is freed up through xyz reason and redeployed on a new route.)

 

[kEiThZ]

I'll have to say this. If your competition is using the same aircraft as you you probably have the right sized aircraft for the route.

These smaller cities are somewhat unique in that there's a smaller selection of aircraft that would make them work. The CSeries though is going to be a game changer here. And AC will deploy it specifically on routes like these eventually to add seats and cut costs at the same time. The geared turbofan is effectively a turboprop with a fan casing. About as fuel efficient and designed for high utilization.

Airlines are strange in that they seem to want to run their flights at the same time as their competitors +/- 20 mins. It's so weird you would think they would want to be at different times, instead the competition dictates that you offer a flight at the same time.

Scheduling is a function of two things: passenger demand for a given time slot and feeding your waves. Since generally people work 9-5, regional flights have a morning peak and an evening peak. It's funny that people get worked up over these cities having less than four flights. In the US, a lot of cities, of ~ 150 000, see only 3-4 flights to any given hub. Look at cities like Greenville, North Carolina or Joplin, Missouri. Morning peak, midday (usually to feed a hub wave), Evening peak, and sometimes a late evening rotation (often remaining overnight (RON) to support an early departure). I see AC eventually moving to this model for a lot of regional destinations in Ontario and Quebec.

Props won't go away fully. They will be redeployed to other markets where the demand is only enough for one daily rotation, and the opportunity cost of taking one aircraft off of an existing (hopefully profitable) and onto this potential route would be too high. With new, larger aircraft deployed onto existing routes, the freed up props and gates will be used to develop other routes.*

I'd say props are going to be a smaller and smaller part of the market going forward. Mostly because 37 and 50 seat flights are becoming uneconomical. And props max out at ~80 seats. High manning ratios. Poor yield consuming slots at increasingly busier hubs. In a decade from now, it'll really only be the Q400 and ATR72 selling. Not too many aircraft smaller than that will sell. A lot of airlines are already finding it easier to simply dispatch a less filled Q400 or ATR72 than even bother acquiring something smaller.

 

[kEiThZ]

A bit dated by there's some figures in here that show you how close a Q400 and a Boeing 737-700 are in cost per airplane seat mile:

https://www.flightglobal.com/news/articles/pendulum-swings-to-turboprops-166047/

Now consider how much more massively fuel efficient the CSeries is than even current generation competitors (737-Max 7 and A319NEO) and you'll start to understand why it can replace turboprops in a lot:

https://leehamnews.com/2017/09/19/cseries-economy-3-better-advertised/

https://leehamnews.com/2010/12/10/737ng-vs-a320neo-an-interesting-chess-game/

The CS300/A220-300 is so efficient, it's nearly as efficient as flying aircraft that are 15-25% larger (737-800, A320). Embraer's E2 series is not far behind. With that in mind, it's easy to see why turboprop sales are tanking. And airlines are simply consolidating flights or larger turboprops and newer generation regional jets/small narrowbodies.

 

[jzair]

It can and it is. Just look at AC and Westjet's fleet plans. Every Max 8 replacing an A320 is a 15% increase. Every Max 8 replacing a 73G or an A319 is a 40% increase in seat capacity. Every A223 replacing an E190 is a 35% increase. And on the widebody side, AC replaced 211 seater 767-300s with 298 seater 787-9s, a 40% gain. Their fleets are being upgauged a hell of a lot faster than the population is growing. In part because, it's a generational change in tech. And in part because they are trying to capture new opportunities. But whatever the reason, they are adding a substantial amount of capacity.

There is no way an airline will cut capacity when they are ordering new aircraft to update their fleet unless they are in financial ruins. This type of increase in seat count is typical for airlines all around the world, but do you see them reducing any frequency as a result of this capacity increase? I don't think so. Many are increasing their orders for jets because going one daily to two daily on a route means an upper edge on competitors who have less flexibility on the same route.

I don't get how you can say this and then this like right after:

The fact that I've mentioned the word "competitor" implies no way am I conflicting myself with the idea of "monopolizing"" a market. These are two different concepts. What I've mentioned is about how airlines can strategically win customers over from another airline.

If we're worried about AC monopolizing Pearson, we definitely have an interest in cutting the number of slot available to them, to hopefully make space for new entrants. And they in turn should be planning on operating with fewer slots.

How can "we" cut the number of slots available to them? Do we just walk up to GTAA and say hey, lets put a limit on AC's daily slot? No, that's insane. The proper way to do it is to increase available slots and let its competitors fill those new slots. How do we achieve that? Well, like you've said, expand the gates, and maybe also build a new airport?! No matter how many more gates you build, runway and airspace will always be more restrictive at the end.

With that kind of BPR, it's CASM is competitive with turboprops. Two pilots and two flight attendants for 78 pax vs. two pilots and 3 flight attendants for 130 pax. Have a look at the empty weight per passenger between the two airplanes. The only restriction is the number of frequencies the carriers want to run.

CASM is only an accurate metric when you can fill an entire plane. It is highly unlikely that AC or WS will be able to guaranteed to fill 130 pax. It's too much of a risk over say, 78 pax. One single empty seat means zero revenue, and the profit margin can be life or death especially for LCC. And even if you claim that reducing frequency forces passengers to take that 130-seat CSeries, you can't guarantee that the pax will be happy about your reduced frequency in service, in which case they will take a flight offered by your competitor.

 

[kEiThZ]

There is no way an airline will cut capacity when they are ordering new aircraft to update their fleet unless they are in financial ruins. This type of increase in seat count is typical for airlines all around the world, but do you see them reducing any frequency as a result of this capacity increase?

Yes. Thunder Bay says hi:

"Capacity ends up being a bit of a mixed blessing," Schmidtke said. "[Currently] we have six flights a day at 78 seats a go, and we're going to be converting to three flights a day at 136 seats a go."

50% cut in frequencies. 13% cut in seats. AC does not give a damn about the competition because Westjet is going to be flying Q400s and Porter doesn't fly to Pearson. You are going to see plenty more of this as CSeries deliveries get going in earnest in 2021.

How can "we" cut the number of slots available to them? Do we just walk up to GTAA and say hey, lets put a limit on AC's daily slot? No, that's insane. The proper way to do it is to increase available slots and let its competitors fill those new slots. How do we achieve that? Well, like you've said, expand the gates, and maybe also build a new airport?! No matter how many more gates you build, runway and airspace will always be more restrictive at the end.

You seem to have very little imagination on policy. The GTAA and government can damn well say no more than x% of slots at major airports to be controlled by a single carrier in a boost to improve competitiveness. That'd be a little drastic for my taste, but it absolutely can be done. AC doesn't "own" the slots at the end of the day.

Realistically, what I am alluding to here is that AC will rationalize the slots as Pearson grows in capacity but remains slot restricted. They will adjust their fleet to upgauge where possible (see above) and will reassign slots to more profitable routes.

CASM is only an accurate metric when you can fill an entire plane. It is highly unlikely that AC or WS will be able to guaranteed to fill 130 pax. It's too much of a risk over say, 78 pax

Nonsense. Keep the same capacity and use larger airplanes and you are boosting load factors. Are you going to see 100% conversion? Maybe not. But when airlines do this they know exactly how many pax they are giving up and can weigh that against the boosted yield.

One single empty seat means zero revenue, and the profit margin can be life or death especially for LCC.

Air Canada is not an LCC. And LCCs and ULCCs don't care about frequencies by definition. Load factor maximization for them is a much higher priority than yield maximization.

nd even if you claim that reducing frequency forces passengers to take that 130-seat CSeries, you can't guarantee that the pax will be happy about your reduced frequency in service, in which case they will take a flight offered by your competitor.

All balanced against the fact that one of Air Canada's competitors doesn't fly to the major hub (Pearson) and the second competitor operates smaller airplanes with longer flight times, less overhead baggage space, narrower seats and the same or fewer frequencies.

And that's if AC faces competition. There's routes where they don't have any competition from Porter or Westjet and routes where the only competition is Porter and no competition to Pearson.

 

[jzair]

Yes. Thunder Bay says hi:

Thunder Bay does not represent the entire regional market, exceptions and outliers will always exist.

You seem to have very little imagination on policy. The GTAA and government can damn well say no more than x% of slots at major airports to be controlled by a single carrier in a boost to improve competitiveness. That'd be a little drastic for my taste, but it absolutely can be done. AC doesn't "own" the slots at the end of the day.

Nonsense. Keep the same capacity and use larger airplanes and you are boosting load factors. Are you going to see 100% conversion? Maybe not. But when airlines do this they know exactly how many pax they are giving up and can weigh that against the boosted yield.

Almost seems like you are trying to sharply falsify any suggestions/opinions. The idea here is not to draw the line between who is right and who is wrong. An intelligent conversation enables folks to look at a problem from different perspectives and clearly that hasn't progressed much.

Realistically, what I am alluding to here is that AC will rationalize the slots as Pearson grows in capacity but remains slot restricted. They will adjust their fleet to upgauge where possible (see above) and will reassign slots to more profitable routes.

Yes, rationalizing slots is totally agreeable. And the result of this has to do with new investment in airport infrastructure, which was the topic of this thread anyways. Let it be Pickering or Hamilton, there is no denying that both are important. It may seem that improving Hamilton can take some precedent over Pickering for now but you never know where the market is in the long run.

 

[kEiThZ]

Thunder Bay does not represent the entire regional market, exceptions and outliers will always exist.

What makes Thunder Bay all that different over Sudbury, or Timmins or Soo?

Regional markets tend to be less frequency sensitive because there's less competition. It's just that simple. If WestJet wants to ramp up Encore to make a play for marketshare, AC may change course. But these markets are usually too low yielding for WestJet to care.

Heck, this move in TB is even more drastic than I predicted. I was suggesting normalization around 4 flights per day with aircraft sized accordingly.

Almost seems like you are trying to sharply falsify any suggestions/opinions.

Projecting much? Shall we talk about your strawman about sending A380s to Heathrow and 777s to Sudbury?

Yes, rationalizing slots is totally agreeable. And the result of this has to do with new investment in airport infrastructure, which was the topic of this thread anyways.

The topic of this thread is the Pickering airport. We got to discussing Pearson and regional flights because various posters seem to think that:

• Pearson is "full" because it might be slot constrained.
• Regional flights can be split from mainline and located at a different airport.
• We're hard up for connectivity to smaller centres in Ontario.

I've discussed consolidation and upgauging to show that none of the above is really true. Especially not over the timeline it takes to build another airport.

I also want people to move away from the idea that a second airport is about "relieving" Pearson. It isn't. It's about accommodating futures growth. Especially from growing LCC and ULCC sectors.

 

[jzair]

What makes Thunder Bay all that different over Sudbury, or Timmins or Soo?

I don't think I was talking about regional destinations but the fact that airlines use regional jets to serve destinations, they are different in nature. I've flown to Houston in a half empty CRJ, let me know how AC will fill 130 seats overnight.

Shall we talk about your strawman about sending A380s to Heathrow and 777s to Sudbury?

Yes, the fact that interpreting sarcasm is a little difficult? It was used to raise the fact that no airline ever do what I've mentioned.

I've discussed consolidation and upgauging to show that none of the above is really true. Especially not over the timeline it takes to build another airport

So according to a report by GTAA, the limit of 90 aircraft movements per hour has already been reached in 2017. How is that going to be resolved?

Having the worse on time performance of any major North American carrier in a recent report, how is AC going to cope with congestion? Yes, part of the solution is to develop LCC/ULCC in other airports, but also have to take in consideration as other international carriers will launch new routes (i.e. ANA). Just keep in mind that airports don't have infinite slots.

 

[kEiThZ]

I don't think I was talking about regional destinations but the fact that airlines use regional jets to serve destinations, they are different in nature. I've flown to Houston in a half empty CRJ, let me know how AC will fill 130 seats overnight.

By getting rid of the flight and redistributing that demand over the other two AC and other three United flights per day.

Nobody says they have to do one for one swaps. This is a strawman you came up with. The Thunder Bay example shows exactly where regional jets and turboprops are going. Delta is leading the way on this:

The Atlanta-based carrier is using the 109-seat A220 to replace older, less-efficient aircraft like the the smaller Embraer SA E175 and Bombardier Inc. CRJ900 regional jets. Over time, Delta is likely to fly A220s into other important U.S. business hubs, spokesman Morgan Durrant said. Delta is betting that business travelers will prefer new airplanes over older models and may well swap carriers for a nicer ride.

Delta’s message to American and United is clear: This quieter, roomier jet—with transcontinental range—is designed to be a corporate-contract winner. “Not only does it have far superior economics, but the customer experience is going to be amongst the best,” Delta President Glen Hauenstein told investors in December.

So according to a report by GTAA, the limit of 90 aircraft movements per hour has already been reached in 2017. How is that going to be resolved?

By consolidating and upgauging.

What do you think has the better shot of achieving decent on-time performance? Six Q400s or three A319s to Thunder Bay?

Having the worse on time performance of any major North American carrier in a recent report, how is AC going to cope with congestion?

Hence why I said they need to start talking about cutting slots at Pearson. It'll force schedule consolidation and upgauging. But will also improve OTP. Pearson clearly can't handle 90 efficiently.

Yes, part of the solution is to develop LCC/ULCC in other airports, but also have to take in consideration as other international carriers will launch new routes (i.e. ANA).

If slots are being used on RJs and turboprops, you won't see many new routes coming. Also, no mainline carrier that is established at Pearson is going to go running to set up at an airport with substantially worse connectivity and a much lower catchment population.

ANA, a Star Alliance carrier, is most certainly not moving to an airport without its Canadian Star Alliance partner. At least not voluntarily.

As demand grows for the Pearson slots, we could see discount carriers like Sunwing and Air Transat head for Hamilton or Pickering.

 

[MarkBrooks]

What is often missed in the Pearson capacity debate is the increasing cost of utilizing its remaining capacity. The closer you get to max, the harder it is to handle weather disruptions, mechanical delays, pilot error etc.
The longer the taxi, the enroute flow speed reductions, the holds etc.

But most importantly, we lose out on opportunity.

See:

Should Pickering airport be built? Yes

The continued economic growth in the GTA depends on a secondary airport in the eastern GTA.

www.thestar.com