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New Dreamliners allow Air Canada to expand its range

The arrival of the 787s is part of a strategy that will allow Air Canada to cut its costs.


The choice of Toronto-Tel Aviv as the first route for Air Canada's new Boeing 787 planes demonstrates how the airline plans to use the 37 planes that will be delivered between next March and 2019, Air Canada executive vice-president Ben Smith says.

The Toronto-Tel Aviv run needs an aircraft smaller than the existing Boeing 777, but one with better range than the Boeing 767s that currently serve the route, Mr. Smith said Wednesday as Air Canada announced that its new 787s will be scheduled first on that transatlantic route.

"This airplane is going to serve two main purposes for us," Mr. Smith said. "One is to replace our 767 fleet and two is to allow us to start routes that were not viable with the 767 because the 767 didn't have the economics or the 767 didn't have the range."

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On the Toronto-Tel Aviv route, for example, the 787 with its 251 seats could make daily flights year-round, instead of the current schedule, which is cut back to three times a week during the winter. Tel Aviv is at the maximum range of the 767 so Air Canada could not carry a full load of cargo on that route.

"We were always kind of flying there one hand tied behind our back," Mr. Smith said.

They could also lead to more flights, he said, such as two to three flights daily between Toronto and Beijing if landing slots were available, compared with the current once-a-day offering.

The second scheduled route for the 787 will be announced shortly, he said, but it will involve a new destination for Air Canada.

After the first plane joins the fleet in March, it will be flown on shorter routes so as many pilots, flight attendants and mechanics as possible become familiar with the new plane.

The arrival of the 787s – which has been delayed for several years because of the problems Boeing has had in developing the aircraft – is part of a strategy that will allow Air Canada to cut its costs. They are more fuel-efficient than the 767s they replace and will permit Air Canada to transfer the older planes to its low-cost Rouge subsidiary.

The prospect of lower costs per average seat mile with the arrival of the 787s, five high-density 777 aircraft and other measures prompted BMO Nesbitt Burns Inc. analyst Fadi Chamoun to raise his target price for the airline's shares to $10 from $7.50.

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Demand for air travel remains favourable and the lower costs of the Rouge subsidiary versus Air Canada's mainline flights are making new routes available, Mr. Chamoun wrote in a note to clients.

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About the Author
Auto and Steel Industry Reporter

Greg Keenan has covered the automotive and steel industries for The Globe and Mail since 1995. He also writes about broader manufacturing trends. He is a graduate of the University of Toronto and of the University of Western Ontario School of Journalism. More


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