Many airlines want to be far more than that. Hopes of expanding to offer myriad travel (and, in some cases non-travel) services are broad, extending a brand throughout the “travel ribbon.” But one company with significant experience along that ribbon is shifting course in the other direction.
Canada’s Air Transat, fresh off its collapsed planned merger with Air Canada, will shed its hotel division and refocus efforts on running a profitable, standalone airline.
The carrier cites a “decline in liquidity as a result of the COVID-19 pandemic” as driving the decision to shutter the hotel division’s operations. During the six-month period ended April 30, 2021, the hotel division’s operations generated a net loss of C$2.1 million. That is only about 1% of the company’s adjusted net loss for the period, but, along with liquidity challenges and questions about the timing of a market return, were enough to drive the decision.
Shrinking, normalizing the fleet
The focus on airline operations includes reducing the fleet size and simplifying its makeup. The company peaked at 47 aircraft at the end of 2019 and early 2020, including five different sub-fleets. As it resumes operations this summer Transat intends to operate just 27 planes in three sub-fleets.
The A330 fleet reduced from 20 to 15. The company hopes to further cull the twin-aisle aircraft from operations.
The A310 fleet is permanently retired, though that was planned prior to COVID. The 737s are also on the way out, with just one remaining. Negotiations are on-going to remove that from service as well.
The carrier will keep its four A321neo/ceo in service as well as the 7 A321LRs currently in the fleet. The order book currently shows another 10 A321LRs slated for delivery by the end of 2023.
Seasonal fleet operations are, at least for now, off the books. Historically the carrier added as many as 13 seasonal single-aisle aircraft to augment capacity.
Route adjustments
Accompanying the fleet changes will be route network adjustments as well. Playing on its strong brand recognition in its home province of Quebec, as well as in the UK and France, the company will redefine the network by ensuring a greater presence in Eastern Canada and Montréal. It also hopes to establish alliances to strengthen network feed.
As for shifting away from the broader travel ribbon operations, perhaps it is worth noting that most of the airlines trying to get into those segments are hoping to act as resellers, not operators of the non-air portions of the market. That’s great for earning commissions on sales but makes controlling the product – and pricing – much more difficult.
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