Air Canada (TSX:AC) stock was up 0.79% in early afternoon trading on May 1. Shares of Air Canada have dropped 2.4% in 2018 so far after doubling its share price in 2017. Air Canada will begin deploying its low-cost Rouge carriers in British Columbia this summer. However, Air Canada will apparently continue its focus on the “premium passenger” which has served the company well in recent years. Some of the new routes for Rouge will include Montreal to Victoria, B.C., and Toronto to Nanimo and Kamloops, B.C. This rollout will begin in June.
This will coincide with the launch from one of its top competitors.
WestJet Airlines Ltd. (TSX:WJA) stock was down 0.26% in early afternoon trading. Shares have dropped 13.3% in 2018 so far. WestJet is set to launch its iteration of an ultra low-cost carrier Swoop in June. The launch is set for June 20 and the airline will use the airport in Hamilton, Ontario as its base in Eastern Canada. The flights will be on a Boeing 737-800 aircraft and customers will pay for one seat and one personal item.
Both will be competing with companies like Flair Airlines Ltd., which is offering its own ultra low-cost alternative. WestJet is facing a potential pilot strike which has the potential to empower its competitors in the short term. Both Air Canada and WestJet reported impressive passenger traffic in 2017 which is expected to continue as demand for air travel is only increasing.
The domestic competition will be worth monitoring for investors this summer.
