Air Canada to slice service by 7% - how to handle it

Air Canada isn't immune to the winds of change sweeping the airline industry. The Canadian carrier says it's cutting systemwide seating capacity by 7 percent during the fourth quarter of 2008 and first quarter of 2009.

U.S. cuts are deeper. AC (that's Air Canada's code) is eliminating 13 percent of its transborder seats during the same period, and 2 percent of its flying in the Canadian domestic market. “If fuel levels remain at current levels,” says Monte Brewer, Air Canada President and CEO, “we can anticipate further capacity reductions”.

Part of Air Canada's plan to save fuel is to do away with nonstop Vancouver (YVR) to Osaka (KIX) service on October 26. The carrier will release a revised fall and winter schedule shortly.

With the reduction in flying there will be need for fewer employees. Air Canada is decreasing staffing levels by 2,000 employees.

Some context: AC says every $1 Canadian increase in the price of a barrel of crude adds an estimated $26 million Canadian to he carrier's annual fuel bill. At current levels, that means Jet A fuel will cost Air Canada close to $1 billion Canadian more in 2008 than in 2007. More perspective: given present capacity and levels and energy prices, AC would spend more than $230 Canadian in just fuel to fly a passenger roundtrip. The 2007 average was $146 Canadian.

How to cope: Remember, 13 percent of Air Canada's cuts are coming on transborder flights between the U.S. and its northern neighbor. Holiday travel could be challenging - although far from impossible. Cheapflights suggestion is to book as early as possible. If you'd been waiting till September to book a holiday trip, re-think. Do it in August - early August. Make sure your plans are firm before you commit. You don't want to have to ante up change fees.

Other ideas on how to handle this: fly on off-peak days. That means early Saturday mornings, and Tuesdays. While the routes affected by AC's cuts haven't been released yet, flights to and from major airports could weather the energy storm better than those to smaller airports - those served by smaller less fuel-efficient aircraft. Be prepared to get to a major airport in the U.S., such as Chicago O'Hare (ORD), which should offer more transborder options.

© Cheapflights Ltd Jerry Chandler