Low-cost airlines, already very popular in Europe and the United States, are trying to find a place in Canada. But tempting prices are often at the expense of other services and the battle is hard to penetrate a market already occupied by well established companies.
In recent years, Montréal has been welcoming these “low-cost” airlines, such as Interjet, which offers Quebec travelers destinations to Mexico, WOW Air, which provides non-stop flights to Iceland, or Level-France, which will offer Montreal-Paris Orly flights with three weekly flights starting in July .
“What we have seen in recent years is that there is a strong development of these low-cost companies and it is reassuring for Canadian consumers,” says Alexandre Moreau, public policy analyst at Montreal Economic Institute.
The arrival of these new players is linked to the reform of Finance Minister Bill Morneau, “which has increased foreign investment that can be made in Canadian companies,” he says.
“The significant influx of foreign investment has facilitated the development of airlines,” he continues.
That’s why travelers are seeing more and more of these offers at a discount, notes Sylvain Sénécal, professor of marketing at HEC Montréal.
Which does not fail to displease them. “The prices are very competitive,” says a lady cross at Montreal-Trudeau Airport, which is used to traveling to Mexico.
Another client claims to have paid about $ 500 for a return ticket. But you have to travel light because you have to pay for your luggage and just “peanuts and a drink” for a flight of a few hours, she says.
We have to compromise. We pay less, we have fewer services.
Sylvain Sénécal, professor of marketing at HEC Montréal
Mr. Sénécal explains that the lower costs can result in services at secondary airports far from the desired destination.
The effects are also felt on meals on board, which are more rare or non-existent, and often result in fees for extra baggage.
For Sylvain Sénécal, “the lower population density and the very large spaces” make Canada less conducive to the expansion of these types of companies.
“The discount companies will open corridors, which are popular, and the other corridors will not interest them because there is not [so much demand],” he says.
It would be surprising, he said, that these companies are interested in flights such as between Montreal and Sept-Îles.
The response of established carriers
The decline in airline ticket prices observed in recent years coincides with the massive influx of these new players, notes Moreau.
“We see that it has an impact on big players, and ultimately on prices,” he says.
Sylvain Sénécal recalls that there have been other attempts to introduce a low-cost air carrier service in the past. “They have not all been successful,” he says.
The big guys in the industry will not be fooled. Westjet intends to launch SWOOP, its new service at very low prices. For its part, Air Canada intends to increase the fleet of its carrier Red.
According to Alexandre Moreau, there is no doubt that there will be a price war.
“Well-established carriers will defend themselves. Everyone already has a brand or sub-brand at a discount. And that’s where it’s going to be played, “predicts Sylvain Sénécal.