Overbooking keeps fares low, affects few seats, Air Canada chief says

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The practice of overbooking airline seats helps keep fares low and affects only a small percentage of seats available on Air Canada flights, Calin Rovinescu, the airline's president says.

The complex network operated by Air Canada means "by definition" that some people who buy tickets are no-shows, Mr. Rovinescu said.

"Data shows there's a certain number of no shows that come up, so this practice has permitted pricing over the airline industry generally that would stay lower," Mr. Rovinescu said.

He spoke in an interview as Air Canada was named best airline in North America in the annual Skytrax world airline awards.

The issue of service has risen to top of mind among airline passengers after several well-publicized events, including an incident during which a United Airlines Inc. passenger was dragged off a plane in April to make room for some of the airline's employees. The airline later said the seats were needed for employees to travel. The Canadian government is in the midst of preparing a passenger bill of rights that would address compensation for overbooking and other disruptions to travel.

The International Air Transport Association said in the midst of the furore over the United incident that airlines need to be allowed to operate as efficiently as possible in order to keep fares competitive.

"Banning the practice of overbooking will reduce already-thin margins and could reduce connectivity in turn," the organization said.

Mr. Rovinescu said Air Canada looks forward to the federal government's passenger rights legislation "so that everyone is going to be treated on a level playing field."

Skytrax surveyed 19.9 million travellers around the world between August, 2016 and May, 2017.

"Obviously we compete with some very, very large carriers in North America and what we have been trying to do over the last number of years is – while we are building a financial transformation – to nonetheless continue to improve on the product offering," Mr. Rovinescu said from Montreal.

A key area of improvement, he said, is the airline's fleet, notably the Boeing 787. Air Canada will operate a fleet of 30 787s by the end of 2017 as part of a full order of 37 to be delivered by the end of next year.

They are more fuel-efficient than the Boeing 767s they replaced, thus opening up routes and destinations that were uneconomic with the older planes.

Mr. Rovinescu pointed to Vancouver-Melbourne flights that will start in December, adding to existing Vancouver-Sydney and Vancouver-Brisbane service, as an example of how Air Canada is using the planes.

"You can't possibly service those destinations only with the Vancouver market or the Western Canadian market or the Western U.S. market," he said.

So the airline will use a 787 aircraft that will originate in Toronto and stop in Vancouver. Melbourne-bound passengers can stay on the plane as it carries on to Australia.

The Vancouver-Melbourne flight is also timed so that passengers on Air Canada's daily 787 flight from Newark, N.J., to Vancouver can also make the connection.

That one-stop flight from the New York area on new equipment compares with Delta Air Lines Inc., whose website routes passengers to Atlanta from Newark on an MD-88, then Atlanta to Los Angeles on a 737 and from Los Angeles to Melbourne with the final leg on a Boeing 777.