Harmony

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But even a week beforethe announcement, any suggestion that the end was near for the four-year-old airline was dismissed. That was when Harmony announced it was quitting the Las Vegas market, and terminating its flights to Vegas from Vancouver. At that time, the airline denied there was any problem.

But the writing was on the wall, said one observer, so it was no surprise that the airline took the decision to cease operations, despite the denials. He pointed to “a competitive disadvantage” at the root of the business case that derailed Harmony.

For instance, the airline was fatally flawed by a deficit in fleet size compared to its competitors, Air Canada and WestJet. And, while business on the Vancouver-Hawaii route was solid, it was very weak between Toronto and Vancouver, he said. Harmony aircraft on the Hawaii route were sometimes 80 per cent full, but could be as low as 20 per cent full on the Toronto flights.

The type of aircraft used on that route was another factor, given that Harmony’s B757s are heavier, thirstier and costlier to operate compared to, for instance, the A320s and A319s used by Air Canada.

Yet another, more long-term factor was the inability to develop a market based on flights to China from Canada. Harmony had made preparations

to launch services there, but was stymied by the lack of a long-awaited approved destination

status agreement.

These factors neutralized the advantages that Harmony brought to the table – principally, its promise of great inflight services, including a hot meal. This, plus the premium-class services in the business cabin, gave Harmony the opportunity to charge a bit more for its airfares. But it was not enough to save the carrier.

“Increasing operating costs [mainly fuel], overcapacity in the market and aggressive price competition from larger carriers prompted Harmony to end its scheduled service,” said Ho.

But in its official sign-off, Harmony stressed that “this is not a bankruptcy. This is not a creditor protection arrangement, and this is not a company dissolution.” Rather, the company has quit this avenue of business to seek other opportunities – and to restructure itself in the process, said Ho.

One of those opportunities will continue to be the quietly growing Companion Holidays, whose operations were separate from those of Harmony Airways and Harmony Vacations. It is in the business of developing new niche holiday products in often-exotic locales, using partner carriers. Programs now being sold through travel agents include packages to China, Egypt, Vietnam and Cambodia, using airlines like China Eastern.

“This is a completely different company within the group,” said Chu. The Companion Holidays res. office may even grow with the addition of some former Harmony Vacations staff, he said.

Charter opportunities are also being explored, said Chu.