air merger 

By Loreth Beswetherick One of the fundamental keys to Whistler’s success is excellent air access to markets that feed the resort, and it is for that reason staff at Tourism Whistler have been paying keen attention to the prospective Air Canada takeover of Canadian Airlines. The merger, said Barrett Fisher, vice president of sales and marketing for Tourism Whistler, could mean a whole new set of rules in how Whistler is able to access consumers in the future. The deal still needs federal approval but government sanction could be given as early as Dec. 23. Both Canadian and it’s parent, American Airlines, have been important allies for Tourism Whistler. They have traditionally been code-share partners and they target most of Whistler’s key destination markets in the U.S. with non-stop, direct flights to Vancouver. The resort’s partnerships with airlines include co-operative marketing programs and joint sales missions. "They support our marketing needs by bringing consumers from the markets," said Fisher. Canadian has also controlled the Australia to Whistler route through direct flights between Sydney and Vancouver. They also owned the Vancouver to Mexico route. Both access important markets, said Fisher. "There are others as well but these two routes in particular are very important to Whistler’s business," she said. "Canadian and American have been very important partners in the past. Both are exceptionally important to us because they both cover different markets." Canadian also has non-stop, direct flights to Vancouver from Texas and New York plus it runs flights out of the U.K. and owns the route between Tokyo and Vancouver. Fisher said in analysing the potential effects of a prospective merger Tourism Whistler looked at four key categories — route access, code-share, competition and pricing. "She said Tourism Whistler is encouraged by the preliminary information on the prospective merger. At the moment it all looks positive." Early indications are that Air Canada will likely pick up the non-stop, direct routes owned by Canadian. The code-sharing relationship with American will also likely continue. "The good news is that, as part of the agreement, it has been made clear Air Canada will now not only continue to run Canadian as a subsidiary but it will become a code-share partner with American and that is essential at the moment," said Fisher. "It’s exceptionally good news because it solidifies the relationship Canadian had with American. It is very good news for the resort." Under the agreement announced by Air Canada, code-sharing and frequent flyer rights will continue over a 10-year period. A Commons committee has also recommended a two-year freeze on fares as a condition of federal approval. "I guess the biggest issue that comes out of a merger is concern one national carrier might lead to price increases due to a lack of competition and ultimately it would be the consumer who pays." Fisher said, however, the Commons committee has recommended charter companies and regional airlines be allowed to expand their operations to ensure some competition is maintained, especially within the Canadian market. Another recommendation is that Air Canada will be able to boost rates based on increases in fuel costs or other external factors, but any substantial increase must be justified. Fisher said at least rates will be monitored this way. There has been some talk that having one national carrier could open Canadian doors to new airlines coming in, like Virgin which recently launched a low-cost airline service between Australia’s major cities. Reports out of Australia this month indicate Virgin Australia is promising 50 per cent of seats on its domestic flights will cost less that $100 Australian one-way. The airline, owned by English entrepreneur Richard Branson is trying to break the ‘duopoly’ of Australia’s Qantas and Ansett airlines which control the domestic market. A Virgin spokesman contacted on the Air Canada merger also went on record saying the company is typically interested in capitalizing on markets where there is one national carrier. Fisher said any new airline moving in will depend on Air Canada’s ability to maintain scheduling and pricing attractive to the consumer. She said market forces will likely prevail, as was demonstrated with the 1995 Open Skies Agreement which saw some routes to U.S. cities cancelled due to limited demand. "If Air Canada offers excellent frequency and competitive pricing then there may not be need or room for more carriers to come in, regionally or nationally." Fisher said, so far, most of Tourism Whistler’s concerns appear to have been addressed. "Overall we feel very positive despite the potential loss of Canadian Airlines, which is very sad for us. We have had an excellent relationship with Canadian. We hope, even if it is in a revised format, we see continuity through this merger. We have developed relationships over years and years and years with key players that we hope will be able to continue. We believe, however, most of the issues have been addressed through the negotiations, which is important for the future of Canada and specifically, the future of Whistler."


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