Think what you want.
Had the core business in Western Canada remained status quo with $1 a mile walk up yields 12 years ago when oil was $18 a bbl, Canadian would have likely survived the Asia meltdown in 97-98, even when they were still operating aged DC10's. That's how profitable the west was pre WJ.
However, fares plummeted and the only safe harbor they had, Western Canada, went sideways. WJ was the nail in the coffin. That's why other carriers pretty much let WJ run loose in Western Canada.
C3000 was done like toast prior to 9/11 and they knew it. Lecky's memo to his Board confirms it. No one had ever expanded that quickly and both Royal and CJ v1.0 were losing money big time. WJ knew those 3 would be done the day the deal was done in April of 2001. WJ simply sat back, carried on business as usual and watched the fun from a distance.
It's been proven over and over again world that all it takes is one low cost entrant offering one sched flight a day to destroy yields in a market.
If you have any doubts about that, check to see what fares are being offered the day before WJ offers service to YZF and the day after.
The incumbents have to match fares across the board.
If they simply match on a flight by flight basis, both flights will fill up as people drift to the flights with fares 50% lower than the bracketing flights. You gonna take the $99 flight at 8:00am or the $379 flight at 11:00am? The cheap flights fill up, the others go empty. If they drop fares across the board, they lose even more money. You can't lose a little on every flight but make it up on volume.
If you are a low cost carrier and have done your homework, you'll be able to make 15% margins if that occurs as the other airlines lose 10-15%. That is the key to the plan. Because the guy with the lower costs is highly profitable and the low fares are stimulating demand on all carriers, that one leisure flight a day will turn into two leisure flights a day. The other guys simply can't throw more capacity into the mix to absorb the demand. The more they do it, the greater the losses incurred. Sooner or later, they run out of cash. We've seen that over and over and over again in Canada.
Repeat over a few years and, lo and behold, the LCC has 6+ flights a day between markets and is now able to compete for the higher yielding passengers who want frequency. Now you are moving from the stimulation model to share shift model, which, with a few exceptions domestically, is where WJ is today, with fares being pretty much equal, but profitability from operations being very, very different.
As for costs, WJ's were 13.6 cents with a 930 mile asl in 3Q 2008. Jazz's costs and asl are easily calculated from the info available on their website. Mainline's costs are easily calculated, but asl is not as AC does not provide the number of mainline departures per quarter, (asm's and weighted average seats per departure is available). Without adjusting for the accurate average stage length, comparing casm is a useless exercise.
Regardless, WJ's costs of moving a seat a mile remain about 40% below any significant competitor in Canada, about the same as it was when they started in 1996. The absolute casm isn't as important as the delta between the two.
Anyone wanting to come in under WJ would have to do it with a casm at least 33% below WJ's. There is no realistic way of accomplishing that on any type of ongoing basis with an airplane type with the appropriate capacity and range, ie trans-con / ETOPS / 140 seats +/- 20. No one wants to be stuck with Maddogs in Canada with $50+ oil. If someone wants to get a lower casm by operating 747-400's on YVR-YYZ, let them have at it.
Without lower costs, there can not be a sustainable level of lower fares to stimulate new demand and therefore no opportunity to use price to create new passengers.
WJ left a window of opportunity in Canada when they didn't move into YYZ in a big way when Cdn all but collapsed. That left an opportunity for Jetsgo and we all know what happened there. That door has been slammed shut.
WJ is smart enough to leave fares low even in monopoly markets. No one flies to YXX or YHM, yet the fares are pretty much common rated to YVR and YYZ. There's not enough there to intrigue route planners of airlines with significantly higher cost structures, and fares are low enough that the only sort of fares that would stimulate new demand would bankrupt a new entrant pretty quickly.
Like Virgin USA and Skybus, there is no obvious market for a new entrant product. It'd be the same for anyone else trying to create WJ V.2 in Canada. Anyone wanting to do so would have to raise at least a couple hundred million in paid-in capital. Do you see that happening anytime soon given the millions lost by Jetsgo, Roots, Harmony, Greyhound, Canadian etc etc?
Add to that, Canada is a small market with 40%+ of traffic coming from connections. It'd be very very difficult for anyone to create any sort of network to overcome those operated by the incumbent legacy and low cost carriers.
Canada is a relatively small market. Think in terms of WalMart. Prior to WJ, we had Sears, the Bay, Woodwards (in the west) and Eatons all duking it out, all with pretty much the same cost structure. No one could afford a killing stroke without killing them selves along the way. In comes WalMart, the lowest cost operator and pretty quickly, the weakest fall away.
What's left between those left standing, (The Bay/Zellers, Sears and WalMart) covers the remaining market. There's not much room left for Target or Nordstroms.
There's not much difference between this and how the Cdn industry has evolved in the past dozen years.
Keep an eye on the forest, not the trees.