Quote:
Originally Posted by Truenorth00
Running point to point flights away from hubs is expensive and challenging for network carriers. Let's say they want to offer a YOW-SFO flight on an A321. They have to have the A321 fly YYZ-YOW and YOW-YYZ rotations to bookend the YOW-SFO roundtrip. This is regardless of whether they need the same capacity on that YYZ-YOW slot. And they have to do that for every non hub flight from Ottawa. It's complex and inefficient. Which is exactly why they flow pax through YYZ. A smaller airline with smaller airplanes hubbing here was the only way we were ever going to get more direct flights. I have doubts that AC will really fight back. They can still get a lot of long haul business through YYZ and YUL.
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One other thing to consider is one of the key metrics that investors look at with publicly traded companies is profit margin. As a result, companies are wanting to keep it as high as possible, so any route that's profit margin is below average is at risk of being canceled, as it is lowering to company's overall profit margin (even if the route is profitable).
For that reason, I think AC would be happy to let Porter take over many of the direct flights out of YOW, as cancelling those routes will help AC increase its overall profit margin, by focusing on higher yielding routes.