Air Canada, WestJet in heated competition

MONTREAL — Competition is heating up between Canada’s two largest airlines as Air Canada (TSX:AC.B) vowed Wednesday to compete aggressively to preserve its market share despite WestJet’s (TSX:WJA) plans to expand its service next winter.

Freestyle skier David Fontaine

MONTREAL — Competition is heating up between Canada’s two largest airlines as Air Canada (TSX:AC.B) vowed Wednesday to compete aggressively to preserve its market share despite WestJet’s (TSX:WJA) plans to expand its service next winter.

“We’re not going to simply back out of markets we think we can make money in,” Air Canada CEO Calin Rovinescu said in Vancouver after unveiling the airline’s new Olympic plane.

While it won’t lead a price war with its Calgary-based rival, the cash-strapped airline said it plans to weather the recession even though some routes and markets may be abandoned as it cuts back capacity in the wake of lower demand.

“There might be some strategic capacity we’ll take out, but we certainly don’t intend to abandon massive parts of our business without understanding what it is that we’re doing,” said Rovinescu, who is attempting to prevent Air Canada’s second bankruptcy protection filing in six years.

In addition to its internal financial challenges, Air Canada faces a competitor that unveiled Wednesday its largest non-stop flight schedule, featuring eight new international destinations in the Caribbean and three additional U.S. cities, Kauai, Hawaii, Miami, and Atlantic City, N.J.

By late fall, WestJet plans to operate service to 66 cities in more than 10 countries, compared with 51 cities in eight countries one year ago.

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