Business Thursday: Why every low-cost airline failed in Canada?

My first Rouge spotting. Ex AC, orig from HA.
From Air Canada Rouge Wiki page

It’s not secret that it is super expensive to fly within Canada. My Twitter feed has already been flooded with complaints from friends who say they may not be able to afford to go home for Christmas. And another friend is getting married in Mexico because it is cheaper than asking her guests fly to Newfoundland. These are CANADIAN PROBLEMS. Naturally, we get pretty jealous of our American neighbors, who have so many low-cost carriers.

In 2014, Planet Money recorded a podcast dedicated to Spirit Airlines, charmingly titled: “The fastest growing least popular airline in America.” The idea behind these low cost carriers is simple: you pack a plane full of people, break down the plane ticket price to just cover the cost of seat, and add a million fees for the extras (checked bag, seat selection, and WATER/COFFEE ON THE PLANE). There are some other things too….the seats are closer together, and get this? They don’t recline. It is by no means a luxurious experience, but hey, it works. These airlines address the core issue. Flying is expensive.

So, why have the low cost carriers taken over the Canadian market yet? The answer is GEOGRAPHY. An American flight from New York to Boston (39 minutes) could be packed full, yet a flight from Toronto to Vancouver (4 hours 40 minutes) could be half empty. Canada has a lot of land, and very few people living on it. This means flights have to go great distances with very few passengers, and you don’t have to have a business background to understand, that’s just not worth it.

There are still options for Canadian flyers though. Air Canada Rouge is a low-cost airline, focused on leisure, while Canada Jetlines aims to serve routes neglected by Canada’s major airlines, like Vancouver to Prince Rupert. Finally, travel agencies are a worth a try because they may have a contract with your preferred airline, which affords them a cheaper rate than the fare published on the websites. If you want me to price check a flight for you, you can email me at cate.ciu@flightcentre.ca. Happy flying!

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