Encore Shaking Up Canadian Regional Flying As It Prepares Expansion

Encore Shaking Up Canadian Regional Flying As It Prepares Expansion

WestJet Encore is shaking up Canada's regional Airline market, pressuring rivals to cut fares and lower costs as it prepares to expand its presence in Eastern Canada and enter the United States.
Launched more than a year ago, the Calgary based carrier claims to be liberating Canadians from the high cost of air travel and stimulating demand.

I think we've woken the competition up absolutely,said Encore president Ferio Pugliese.

WestJet says Encore going to Toronto, Thunder Bay
Encore hopes to double its fleet of 14 Bombardier Q400 turboprops by 2016 and is already adding to its nearly 100 flights per day to 18 destinations, mainly in Western Canada.
A route was recently added between Thunder Bay and Toronto. Eastern service will be introduced in the coming months to Quebec City, Montreal, Ottawa, Fredericton and American destinations from both ends of Canada are set to be added by 2016.
At full maturity, Encore aims to increase its share of the Canadian regional market to more than 40 per cent, but declined to indicate its current share.

Air Canada (TSX:AC.B), as the country's largest operator, and regional partner Jazz stand to feel the most heat.
Air Canada CEO Calin Rovinescu said he is not surprised by the impact of Encore on its routes and has deployed Q400s on some western routes ahead of time to increase flights and beat the competition.
He recently described Encore's impact as de minimis but said regional network must operate more competitively by lowering costs.

With the roll out over the next several years, we certainly expect our regional partners to increase their competitiveness,he told analysts during a conference call in August to discuss its second quarter results.
Encores strategy is to target markets with populations of least 100,000 populations and drive at least half the passengers to WestJet's mainline network as it expands overseas with widebody planes.
Pugliese said industry passenger traffic in markets like Nanaimo and Terrace, B.C., has increased 35 to 50 per cent since Encore launched service by driving a 30 to 40 per cent reduction in airfares.
Encore says traffic in Fort St. John, B.C., has quadrupled since it started service, while fares dropped 60 to 80 per cent. Fare reductions were 29 to 30 per cent in other new markets.

People otherwise not taking the plane are now using aircraft where otherwise they would have driven or not travelled.
Airline analyst Robert Kokonis said Encore's impact on Canadian Aviation will intensify as it expands east.

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Mohini Porwal [ B Sc]
Trainee News Editor
Canada Aviation News Editor