Air Canada CEO praises high-density 777s

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Air Canada is enjoying significant benefits from the deployment of five high-density, 458-seat Boeing 777-300ERs, says company CEO Calin Rovinescu.

The carrier offers three classes on the aircraft, including a premium economy product. Montreal-Paris was one of the first routes where Air Canada deployed the new high-density widebodies that are pegged for markets featuring a higher volume of leisure travelers.

Before the carrier deployed the new 777, the route was one of Air Canadaʼs worst performers, says Rovinescu. But now the new jets have allowed the airline to significantly improve its performance from Montreal to Paris. Rovinescu estimates the added seats on the new 777s offer a 21% reduction in unit costs compared to the airlineʼs existing 777s. The carrier also operates the new aircraft on service from Vancouver to Hong Kong and London.

Presently Air Canada also operates less-dense Boeing 777-300ERs and 777-200LR jets.

Deliveries of six 9-abreast 787s are slated to begin this spring. Those new widebody jets, the operation of higher-gauge 777s and the debut of the carrierʼs new lower-cost subsidiary Rouge in 2013 are pillars of Air Canadaʼs ambitious goal to lower its unit cost excluding fuel by 15% over the medium term.

For the moment Air Canadaʼs higher-density 777 jets seem to be meeting the carrierʼs stated goal for the aircraft, which, says Rovinescu, allows the airline to add capacity on routes with a higher leisure demand “and continue growing at significantly lower incremental costs”.

Passengers are clearly willing to buy tickets in the 10-abreast economy class section of these aircraft. But, on reading Rovinescu’s comments, one regular traveler notes on Twitter, “I do not think CEOs travel in high density economy cabins…do they?!”

Air Canada will also start bearing fruit from a new revenue management system in 2015. It expects to net about C$100 million of annual incremental revenue from a new approach to managing pricing and inventory. Recently Rovinescu declared that a new revenue management system employed by the airline is a “very important piece” of Air Canadaʼs international strategy.

“What it seeks to do is capture both the pricing and inventory for O&D [origin and destination] travel as opposed to only leg,” Rovinescu explains. While the technology exists “to get this thing running and make us more intelligent” Air Canada has to input a large volume of data from the last number of years “to see what kind of flows to expect”, Air Canadaʼs chief states.

Supplying an example of the kind of changes Air Canada is working towards as its manages an overall itinerary, Rovinescu says that if a passenger is traveling on a Boston-Toronto-Beijing routing, “we know to keep [all] that inventory available as opposed to selling Boston-Toronto at a higher price”.

2 Comments

  1. Roger Tilling

    Boeing 777-300 Vancouver-London Heathrow 2 Sep 2014

    The new business class studio pod is TERRIBLE – narrow, short and ridiculously sized and shaped. It’s okay as a seat, but I paid for a good night’s sleep. Forget it! I’m 6ft 4 and when the seat turns into a bed, it slides the lower half of your body into a tiny plastic coffin-like box (in the area under the armrests of the two passengers in front) with no room to move your legs at all, and it wasn’t long enough for me – so it wasn’t humanly possible to lie down!! Hell on earth. As a result, I arrived at LHR tired and irritable, lacking the sleep I had needed and deliberately paid for. The cabin crew was brilliant, but they told me that a lot of other business class passengers had complained about this new seat. It’s also difficult to get the seat back up again from a supposed “bed”. My seat 2A on C-FIVO was also missing a seat-based flexible reading light. It is a reasonably new aircraft so why on earth was that missing?

    Basically, Air Canada has decided to shove more seats in every class onto this aircraft at the expense of comfort and space, and every passenger is short-changed as a result. The 777-300ER that normally takes 359 passengers is being converted to 458 passengers – mine was one of them. The passenger loses. I have read that it is a plan to reduce cost per seat by 15%. It is a total disgrace – avoid this aircraft at all costs. Air Canada used to be a great airline but it is heading downhill. I have sent two emails, two letters to the LHR office and two letters to Calin Rovinescu: the CEO of Air Canada. No reply of any kind has been received to date. Air Canada really doesn’t care anymore. If this is the way Air Canada is going, then it’s time to change airlines folks.

  2. Eddie

    The ol’ Slave Ship Switcheroo! Thank goodness QANTAS has started flying SYD – YVR again. I disagree with the author’s opinion that passengers are clearly willing to fly ten-abreast in economy. I suspect they are surprised when their old experience has been replaced by the new config. I’ve been Rouged through LAX once…but never again!