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Air Transat prepping for A321LRs by rapidly expanding in Europe

Air Transat executives are describing the company's rapid European summer expansion as part of a long-term strategy to remain competitive in transatlantic markets.

The airline will dump 15% more seats into Europe this summer – and do so with widebody aircraft that executives concede are not ideal for the job.

But starting next year, Transat will begin defending newly-acquired turf with an expanding fleet of efficient Airbus A321LRs.

"Our first goal [is] to increase frequencies so that we are able to protect our market share," Annick Guerard, chief operating officer of Air Transat parent Transat AT, says on 14 June. "We need to take our place in those markets that we see are highly profitable."

The 15% capacity gains will be carried on existing routes by A330s and A310s.

"Do we have the exact right aircraft to operate these routes? The answer is no," Guerard says during the company's fiscal second quarter earnings call. "We preferred to have smaller models like the A321 long-range, which is coming up in our fleet."

The first of those aircraft – Transat has orders for 10 – will arrive in spring 2019. Transat will use A321LRs to replace A310s on transatlantic routes, it has said.

Guerard says Air Transat seeks to gain more share on routes to Portugal, French destinations besides Paris, as well as the UK.

"It needs to be done this year, as we see competition growing," Guerard says. "If we don’t do it, others will."

She does not name competitors, but next year WestJet will start acquiring the first of ten Boeing 787-9s, an aircraft that the airline has said it will likely deploy to Europe.

Transat's European growth reflects broader industry expansion.

Airlines are on track to carry 9% more seats this summer between Canada and Europe, FlightGlobal schedules data shows.

That expansion is partly why Transat's summer transatlantic fares are tracking down 1% year-over-year, says chief executive Jean-Marc Eustache.

At the same time, higher fuel expenses and disadvantageous currency exchange rates will push up Transat's summer 2018 expenses 7.2%, the company predicts.

"There have been some pressure on fares recently," Eustache says. "The outlook for summer 2018 is not as positive as last year."

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