Harmony Ending scheduled service

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Harmony Airways to end scheduled service

Tue Mar 27, 5:19 PM

VANCOUVER, British Columbia (Reuters) - Harmony Airways, a five-year-old Canadian full-service airline, said on Tuesday it will end scheduled flights next month, blaming rising costs and competition from larger rivals.

The privately held carrier said it will lay off 350 workers. It will not seek protection from creditors and might try to reorganize itself into a charter service, however.

Vancouver-based Harmony, founded by entrepreneur David T.K. Ho, has operated a small fleet of Boeing 757-200 jets, flying mostly between large Canadian cities and U.S. vacation spots.

It is the latest of several Canadian start-up airlines to be grounded in recent years in a sector dominated by Air Canada, the country's largest carrier, and WestJet Airlines, the No. 2 player.

The last big shutdown was that of CanJet Airlines in September 2006. The four-year-old carrier also blamed rising costs and stiff competition for the demise of its scheduled service.

Harmony said service between Vancouver and Toronto would end March 30, and other scheduled passenger service would be shut down April 9.

Passengers who have already booked flights will receive full refunds.

Rival WestJet said it will accommodate some of Harmony's customers by extending seat sales it has in place for flights to Hawaiian destinations and Las Vegas. It will evaluate how long to keep offering the sale prices, it said.

However, the airline said it has no plans to change its long-term pricing strategy as a result of Harmony's shutdown.

"While such announcements from the airline industry are sobering, we believe the makeup of the Canadian airline industry is extremely viable for two strong national competitors," WestJet vice-president Bob Cummings said in a statement.

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Good thing we shot it while it was here.

Tom

A shame. They weren't all that bad.

Do they still fly to JFK?

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Originally Posted by GothamSpotter

Do they still fly to JFK?

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No they quietly dropped that service. Last week when I was leaving Vancouver there was a Harmony flight leaving for HNL, couldn't have had more then 50 people on it. I was thinking to myself there's no way they can last, guess I was right.

I kind of saw that coming.

The travel business in general and the scheduled airline sector in particular is getting to be impossible for small companies without a huge amount of capital behind them. Since he didn't file for bankruptcy, it seems that Mr. Ho didn't run out of money, but just realized that in this environment, throwing good money after bad to go up against deep-pockets megabrand competitors WestJet and Air Canada was a waste. Hope they can survive as a charter operator because I always liked the livery, but Canada already has a few of those too.

The rule in Canada is apparently "go big, or go home." There have been a lot of competitors that have gone up against the AC monopoly (formerly the AC/CP duopoly, but we all know how that one ended), and only WestJet has managed to survive, and even that survival was only clinched once they became a national airline. It's a long list of failed carriers - Royal, Canada 3000, CanJet (I), JetsGo, CanAir, Roots [which was scheduled SkyService], City Express, VistaJet, etc., which doesn't begin to cover the carriers that merged into the bigger ones like Pacific Western or Wardair. Remember, it's a hugely vast place (Halifax-Vancouver is roughly equivalent to Miami-Seattle - if you go all the way and do St. John's to Victoria, the distance is the same as New York-Dublin!) with a population the size of California. It's just not cost effective to chase a relatively small number of pax over a very large area.