Flying from a dedicated own hub on the Canary Islands is a definitive advantage in terms of dispatch of crews and aircraft. Competition, especially Spanish Airlines, such as Air Europa, Iberia or Vueling will need to bring an aircraft to the port of dispatch first, in itself a 2.5hr flight! They will need to relay crews over that of-hub-destination etc, so it makes less sense than for CanAm.
Of course, it is to be expected, that American carriers will also begin to compete from their hubs in the United States towards the Canary routes as soon as CanAm -through its successfull operations- proves there is a business case. Here, it is important for CanAm to have a competitive edge on services and good flight timing plus optional concerted transit to f.i. South Africa.
Once the high standards in comfort, food and special treats becomes known, the other airlines have two choices: a) Copy the business model or b) undercut the flight fares.
Whilst the first is very welcome by CanAm‘s intention to raise the standards, for the latter CanAm will stay competitive in any case -at high load factors-, which it intends to do right from the start.
Detailed model calculations show that a break-even at full capacity cargo and pax for a flight to Los Angeles would amount to appr. $415 for ECO at 2/3 load factor cargo and pax, the price per passenger would amount to appr. $772USD for a break-even result. The good news is, that at the latter ticket fare with full aircraft the profit would amount to appr. 310.000€ per flights back and forth.
This demonstrates how crucial a high load factor is for the airline success.
We understand that fully price conscious passengers will tend to take longer flights and lay-overs at airports to save on ticket fare. Arriving exhausted and a day later at their destination will be taken into account as usually these are younger travellers with more time.
Therefore CanAm shall focus on a Prime ECO passengers and adapt our cabin layout accordingly without any ECO seats:
Our passengers typically will want to trade in a higher ticket fare for the advantages of direct flights, thereby significantly less travel time plus comfort in a relaxed high-class atmosphere. Therefore CanAm shall focus on these passengers at a rate somewhere close to Business Class and adapt our cabin layout accordingly.
Generally, low-cost airlines are not to be feared as competition, as they neither dispose of the aircraft for these routes nor of a home base at either end of the direct route. Generally, low-cost airlines are focused on routes of 3- max. 4.5hrs for which they employ narrow-body Boeing 737-800‘s and more recently even Airbus A321XLR‘s etc.
Again, we do not see any real competiton arising here, as those amongst us who have had the opportunity to enjoy a narrow-body long haul flight would pay extra just to get off first and out of the confinement of that cramped cabin.