Air Canada has laid out a bold growth plan for the next few years, a plan that includes new planes, new lounges, more premium and business class seats, and potential new routes to Africa.
During an Investor Day presentation in Montreal on 17DEC, the carrier outlined a plan to grow its revenue by more than 35% over the next four years with a target of $30 billion for 2028; up from $21.8 billion last year, with a 5-6% increase in available seat miles.
It’s an ambitious goal and Air Canada executives offered up plenty of “right to win” exclamations. Unfortunately the business community didn’t see it as a winning formula as Air Canada’s stock dropped eight per cent on the day.
“We’re continuing our evolution from flag carrier to global airline,” said Mark Galardo, EVP, Revenue and Network Planning and President, Cargo. “We now can rival some of the greatest international carriers.”
It is worth noting, Air Canada President and CEO Michael Rousseau also touched on Air Canada’s work with travel advisors.
“We’ve also deepened our relationships with the travel agent community, which are important partners to us and essential for many of our customers,” he said.
“In 2023 we launched the New Distribution Capability, which further modernized our product distribution; offering new benefits and providing more content and comprehensive partner support.”
Here’s a look at some of Air Canada’s plans for the next few years.
PREMIUM TRAFFIC
Galardo said Air Canada “plans to capture the consumer shift towards premium products with our position as Canada’s leading premium carrier.”
As business travel recovers and high-end customers remain willing to spend on travel, Air Canada will significantly boost its premium and business class offerings. Measured in ASM, there will be a 24% growth in business class by 2028, and a 20% boost for premium economy. They’re also aiming for a whopping 131% increase in preferred seats.
Air Canada’s new Boeing 787-10 planes (14 in all) will have:
- 40% more business seats
- 33% more premium economy
- 117% more preferred seats than the 787-9
- They also have 30% more business class seats and 25% more cargo space than the A330.
In analyzing the seat configuration, OneMileatATime speculates the extra space at the very front of the business cabin could reflect a plan for “business class plus” seating.
“If you zoom in, there’s a noteworthy detail. You’ll see that the front row of business class on the 787-10 shows a huge amount of extra space, which isn’t depicted with the 787-9. I would guess that’s not an error, and that this is quite deliberate,” wrote Ben Schlappig.
Mark Nasr, EVP Marketing and Digital, and President of Aeroplan, said AC’s 777-300’s will be reconfigured to add 98 extra leg room preferred seats.
NEW LOUNGES, SERVICE OFFERINGS
Nasr said Air Canada is adding nine new lounges, renovating eight existing ones and boosting lounge capacity by 43%.
They also will unveil a new design standard called “Glowing Hearts,” with textures, colours and materials you’d find in Canadian nature. Nasr said the program “will elevate the customer experience throughout the entire journey.”
He also mentioned Air Canada’s recent announcement that free Wi-Fi will be introduced for Aeroplan members next May on flights in North America and to sun destinations, with a later expansion to all flights.
Nasr said Air Canada has improved its F&B offerings and will continue to do so.
He also said the airline will continue to expand Aeroplan partnerships and bring in new, easier to understand elite status rules.
Officials said customer satisfaction ratings are steadily improving. A recent pilot program called “With Care and Class” will soon be expanded.
DESTINATIONS
Galardo said Air Canada believes there are tremendous growth opportunities in several parts of the world, including India and other parts of Asia. The A321XLR (Air Canada is expecting 25 of them) will allow Air Canada to fly to cities where a wide-body plane wouldn’t be economical. That includes smaller European destinations and other cites.
He also noted that Africa is a growing and under-served market.
Air Canada officials didn’t specifically mention any new destinations in their live chat, but the map they showed indicates such potential new spots as Nigeria, Ghana, Istanbul, Riyadh, Cartagena, The Azores, and Bengaluru in southern India.
Air Canada is expecting 70 new A220 aircraft, which it says will be key to its regional service.
Beyond 2030, Air Canada is “exploring options for new, ultra-long haul aircraft.”
Officials also noted Canada’s immigration policies have brought in more people from around the world and that diversity fuels demand to meet global VFR traffic needs. Air Canada recently began flying to Singapore, and will soon add flights to Manila.
ROUGE
Airline officials said many Rouge planes are approaching their end of life or have limited range. AC will migrate its entire 737 MAX fleet to the Rouge line and will build a Rouge base at YVR by 2026.
According to gatechecked.com, all 41 737 MAX planes operating under the mainline Air Canada name will be transferred over the next three years, and the remaining 12 deliveries will go straight to Rouge.
THE LAST WORD
Robert Kokonis, president of AirTrav Inc., told Open Jaw that Air Canada has been averaging an annual growth rate of around 9.7% (notwithstanding certain factors, including COVID).
“In this respect, Air Canada's announced 36% growth in operating revenues in the next four years is not out of synch with their past. The planned increase in fleet and global destinations will contribute significantly to this growth, along with continued strong demand.”
