Updated: Air Canada in review

May 24, 2013  |  Jeromy Lloyd with files from Canadian Press  |  Comments

Note: This story has was updated on May 27 at 11:30
After more than 20 years with a single ad agency partner, Air Canada is conducting an agency review.

The creative, media and digital assignments are up for grabs. All three assignments currently reside with Montreal agency Marketel, which has served as Air Canada’s agency of record for more than two decades (although whether Air Canada is looking for a single agency again is unknown).

The RFP was issued May 22. Air Canada would not disclose the names of any agencies invited to participate in the review thus far. Marketel declined to comment on its involvement.

The airline did say, however, that the review was not spurred “by performance or satisfaction,” but instead by the completion of Marketel’s term of contract (Air Canada revised its contracting policy in 2010 to initiate more frequent reviews across all its vendor relations).

“The goal of this and all our RFPs is very simple: to ensure AC is getting the best services in the category for a fair price,” the company said.

The brand expects the review to conclude at some point in autumn.

The review comes as Air Canada readies the launch of Rouge, its discount carrier, on July 1.

In its most recent financial report, Air Canada said it lost $260 million last quarter, down from a loss of $274 million in the same 2012 quarter. Operating revenues were $2.95 billion, down from $2.96 billion. Pricing decreased 1.1% as it felt pressure from competition, especially in Eastern Canada, to New York and South America.

While it narrowed the first-quarter loss, the results fell short of Air Canada’s expectation in part due to a decline in premium travel demand, said chief executive Calin Rovinescu. Premium revenues fell 6.7% in the quarter, earlier this month.

Air Canada said overall booking demand this summer is running ahead of last year but it is facing price pressure. “The demand is there, people are buying airline tickets… Our challenge will be to get the pricing up to a level we need to get it to,” Rovinescu said.

The air carrier has contracted Argedia Group, a Toronto-based agency search and evaluation consultancy, to aid in the review process.

UPDATE: In the original version of this story, Marketel was incorrectly identified as the agency behind the Rouge brand. Marketing regrets the error.

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