Montreal-based Royal Airlines is the latest entry to the growing flock of Canadian fledglings that want a part of Air Canada's domestic market. The charter carrier, which gained scheduled trans-Atlantic authority earlier this year, has added scheduled flights within eastern Canada in competition with Air Canada and another startup, CanJet, which launched services in early September.

Royal Airlines has leased four Boeing 737-200s and is adding business class to its four Airbus A310-300s and three Boeing 757s for this new service. It is operating several daily flights between Toronto, Ottawa, Halifax, and Winnipeg.

Royal and CanJet are already competing against each other. Both are offering fares as much as 80% below previous prices in these markets. On overlapping routes, Air Canada and Canada 3000 have matched these fares.

Royal's decision to jump into the domestic fray appears at odds with its declared strategy of a year ago. At its shareholders meeting in autumn 1999, chief executive Michel Leblanc said Royal did not intend to become a major scheduled carrier in Canada but would expand on domestic routes to boost its vacation charters. The addition of business class and concentrating scheduled flights on business routes reflects the new approach.

Source: Airline Business