Canada’s two biggest airlines scored below average for customer satisfaction among major North American carriers, according to a new survey, part of a trend of growing passenger frustration across the industry.
Conducted by J.D. Power, the poll found Air Canada and WestJet fell below the average customer satisfaction figure of 782 on a 1,000-point scale for economy class service. WestJet notched 777 to edge out Air Canada, which scored 765.
Pricier fares, crowded planes and fewer flight options are behind the frustration — but demand remains strong nonetheless — said Michael Taylor, managing director of travel, hospitality and retail at the Michigan-based consumer analytics company.
As a result, carriers yielded higher revenues this year after a prolonged industry slump prompted by the pandemic. Taylor said many are running at “peak efficiency,” though higher labour and fuel costs compared with 2019 have hampered profit margins, and capacity has not yet reached pre-pandemic levels.
A global pilot shortage has fostered problems in North America, partly explaining why fewer planes ply the skies compared with four years ago.
Some airlines have ditched smaller planes, trying to pack in as many passengers as possible per flight as they slim down their schedules.
“They’re more full — they have a higher load factor — and that usually decreases satisfaction,” Taylor said.
Meanwhile, the surge in leisure travel after two years under border restrictions and COVID-19 health concerns has pushed prices north.
“Because of that high demand, ticket prices are significantly higher, and they’ve been going higher for the past two, two-and-a-half years or so. For the vast majority of travellers, that’s the key factor in satisfaction,” he said.
That discontent is quantifiable in ways other than surveys. The complaints backlog at the Canadian Transportation Agency stood at about 45,000 as of late April, more than triple the tally from a year earlier and requiring at least 18 months on average per case. Many cases revolve around compensation claims after flight delays or cancellations.
The drawn-out uproar prompted the federal government to table an overhaul to Canada’s passenger rights charter last month in an effort to tighten compensation loopholes and toughen penalties.
While a spate of upstart airlines has made domestic air travel cheaper than ever overall in Canada — particularly in the busiest corridors — passengers face higher prices and scarcer trip options in many regions and on international routes, according to figures from aviation data firm Cirium.
“You want to fly to, say, Winnipeg, it might be a little more expensive, because it’s not the most popular destination versus, say, getting to Toronto,” Taylor said.
The sparser flight boards at many airports also stem from a de facto division of the country by the two main players: Air Canada and WestJet, which share roughly 80 per cent of the domestic market.
Since last fall, Calgary-based WestJet has cut routes in Ontario, Quebec and Atlantic Canada to refocus on its home turf out west. It has also cut flights on some more heavily travelled corridors, including roughly four out of five trips between Toronto and Montreal compared to 2019 levels, Cirium data shows.
Montreal-based Air Canada has mirrored this move, remaining in Central and Eastern Canada while scaling back in the west. It also scrapped 26 regional routes east of Winnipeg in June 2020, with only two resuming since.
The survey Wednesday ranked airlines in three separate categories: first class and business class, premium economy, and economy and basic economy. In the first two groups, Air Canada placed fifth of six.
For economy — encompassing the vast majority of passengers — WestJet ranked fifth and Air Canada came eighth out of 11. Neither airline immediately responded to a request for comment.
Southwest Airlines, Delta Air Lines and JetBlue Airways snagged the top three spots — despite a meltdown at Southwest that caused of thousands of December flight cancellations in what U.S. Transportation Secretary Pete Buttigieg called a “system failure.” American Airlines, Spirit Airlines and Frontier Airlines took up the rear.
JetBlue and Delta came in first and second respectively for business class, and swapped spots for premium economy. United Airlines finished last for business class, and American Airlines did the same for premium economy.
The survey, carried out between March 2022 and March 2023, is based on responses from 7,774 passengers at scores of airports who flew on large North American airlines.
This report by The Canadian Press was first published May 10, 2023.
This is a corrected story. An earlier version incorrectly stated the ranking of Air Canada and WestJet.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
