Air Canada is waking up, and it wants you onboard… if you’re an American. The airline had been making a concerted effort to ramp up traffic flying from the US through Canada to another country before the pandemic, then efforts obviously fell off. Now it’s back in the game, and it thinks it has a real winning strategy thanks to a higher level of density on its airplanes.
Brian Sumers of The Airline Observer (subscription required) spoke with Mark Galardo, EVP of Network and Revenue Planning for Air Canada. Mark noted that premium demand in Canada is lower than in the US. That might sound like a handicap, but it actually creates opportunity. As he explained it to Brian:
Our seat density is pretty dense, and our total reliance on premium sometimes is single digits. We can make money on volume.
In other words, the cost per seat on the airplane is lower for Air Canada when it has a lot more seats to absorb the operating cost of the airplane. That means it can charge lower fares than those airlines with less density, fill its planes, and still win the day. At least, that’s how it should work, if the math is right.
Just how dense is Air Canada? I decided to dig in and do a comparison.
Let’s start by looking at the 777-300ER for Air Canada vs American and United. (Sadly, Delta doesn’t operate the airplane, so it can’t be included in a true apples to apples look here.) Air Canada has two different versions of the 777-300ER, but even the less dense version blows away the others in terms of seating capacity.
That is not a typo on American. The most dense Air Canada 777 has nearly 50 percent more seats than American’s does. It’s insane. But as you can see, those 8 First Class seats take up a lot of real estate on American. And further, it looks like the various galley configurations aren’t doing the airline any favors either.
But we’re talking about Air Canada, not American. Air Canada has nearly perfected the ability to shoehorn seats into this airplane. Of course, it’s a very big airplane, and there aren’t a lot of markets that can support that many seats. But there are markets out there.
In the winter, Air Canada sends these 450-seaters on trunk routes like Montréal to Paris or Vancouver to Hong Kong where the visiting friends and relatives (VFR) traffic is strong. The best VFR markets rarely lack for volume, but they tend to be pretty price-sensitive. These markets are tailor-made for a big airplane with cheaper fares.
Air Canada also does Montréal and Toronto to Cancún. That may seem like a terrible use of a widebody, but if you can really pack in that many seats and fill them, it starts to actually make some sense as a winter option for aircraft utilization. US carriers have done everything to pull their widebodies off those short leisure routes, but that’s the right move when you have such a premium-heavy configuration. Air Canada does not have that problem.
In the summer, it’s a different story. You can probably guess the big, low-yielding tourist routes that might be able to support these airplanes. Montréal and Toronto to Rome get the big boy in late spring but then later in summer it goes to Athens. Montréal to Paris gets it year-round, unsurprisingly, but Toronto to Paris also sees it in summer. And Montréal to Brussels also has some summer flights.
Compare this to the places where American sends its 777-300ERs. It gets the big, premium-heavy markets like London and LA – Sydney along with Miami – São Paulo. Those may be larger markets, but without that big premium traffic demand, they don’t work on that airplane.
But let’s forget about the big guy and move to the 787-9 which is the perfect airplane for longer, thinner routes in general.
The tables are turned here with American being more dense than United, but both pale in comparison to Air Canada. With 298 seats, Air Canada has 4.5 percent more seats than American and 16 percent more than United.
Some of this advantage comes from not having much of an extra legroom section — Air Canada just sells the exit rows/bulkheads — and really that explains the difference between it and American. But United really packs in the premium cabin and that puts it at a real disadvantage if it’s flying those airplanes in markets with limited premium demand.
This is the kind of airplane that doesn’t require enormous levels of demand to work, unlike the 777-300ER. It’s the airplane that Air Canada uses, for example, on its seasonal, sub-daily Vancouver – Bangkok flight which is definitely not a premium-heavy market.
I know Delta hasn’t been included here, but Air Canada and Delta do both fly the A330-300. Delta has 282 onboard with 34 up front. Air Canada’s three-cabin A330s have 10 to 15 more seats, so the trend holds.
This is Air Canada’s secret weapon. It probably still has more premium cabin seats than it needs, so it can sell those at a discount to Americans. (Its fares aren’t lower since it’s in joint ventures with United — at least across the Atlantic — but it tends to have better availability in cheaper fare classes.) And then in coach, it can fill up on cheaper fares for Americans looking for an easy connection.
That’s another key point of this strategy. Air Canada’s penetration into the US is unrivaled by a foreign carrier. In 2023, Air Canada has service to 51 different US airports. It just filed service to a 52nd this past weekend with Toronto – Charleston (SC) coming online. These aren’t all served year-round, but when they are operating, they can provide connections just as good or better than anything US carriers can offer. And with US customs and immigration pre-clearance, that makes a connection in Canada about the same experience as connecting through a US airport.