Sunwing CEO Stephen Hunter’s prediction that delaying Air Canada’s takeover of Transat AT Inc. would open the door for foreign carriers to step in and fill the void seems to be coming true.
Last week, both Brussels Airlines and Austrian Airlines announced they were resuming service to YUL this summer. Brussels Airlines will resume flights to North American destinations in mid-JUN, including Montreal as of 15JUN. Austrian announced VIE-YUL service three times a week beginning in May.
For years, Transat’s massive summer air and land product blanketed Europe with point to point service to dozens of Europe’s capitals from gateways all across Canada. The pandemic has decimated that traditional infrastructure and the trade’s go-to summer selling options, especially in Transat’s loyal Quebec base.
It’s probably no accident that both airlines are targeting Transat’s home base.
“Unless we want Canada completely controlled by foreign carriers, we have to allow (Air Canada’s purchase of Transat),” Hunter told The Globe & Mail in January. “Our main fear is, and what we’ve got to watch out for, is all the European and other international carriers coming in and taking market share away from Canadian airlines. And this is one way to defend them.”
Open Jaw asked Sunwing’s Chief Operating Officer Andrew Dawson if these initial inroads by European carriers reflect Hunter’s analysis of the airline landscape.
“Although it doesn’t affect our business, yes, it absolutely relates to the vulnerability of Canadian airlines. Here you have two examples of European flag carriers expanding,” he said.
“What must be especially grueling to those running similar routes is that these carriers have been the recipient of state aid to the tune of hundreds of millions of Euro.”
Canada’s winter season was a bust, with both national carriers bleeding red ink to the tune of millions of dollars a quarter. While there has been lots of talk, no federal support money is on the table for Canada’s airlines.
Will the summer be a repeat performance? And will travel-starved Canadians take up the opportunity to fly on these carriers despite the risk of mandatory three-day hotel stays still being in place on return?
Should these restrictions persist, there’s also the question of whether inbound traffic will materialize to support Canada’s demolished tourism industry.
Meanwhile. Air Canada’s purchase of Transat has received approval by the federal government, but still must be approved by the European Commission before it becomes a reality and that isn’t expected to happen until the summer.