WestJet bullish on outlook for Swoop
CEO Saretsky touts ultra-low-cost carrier as ‘competitive weapon’ for airline
WestJet Airlines’s chief executive said Tuesday he is confident in the airline’s ambitious strategy to expand internationally while launching an ultra-low-cost carrier despite some analysts’ concerns.
The airline announced Tuesday it expects its total fleet capacity to increase between 6.5 and 8.5 per cent next year, a jump from the six-per-cent capacity growth it expects for 2017.
The fleet expansion will largely be driven by new Boeing 737-MAX jets, reconfigurations that will add more seats to existing planes, as well as the launch of Swoop, Westjet’s new ultra-low-cost carrier scheduled to start flying next summer.
“We are reconfiguring our airplanes, we are spending money on product, we’re going after business travellers and having great success,” CEO Gregg Saretsky said in a quarterly conference call with analysts on Tuesday.
Saretsky also said the company is “generally supportive” of joint
ventures and is in regular conversations with its U.S. partners, Delta Air Lines and American Airlines, about how to add more value to their partnerships.
“Is there a point in time where favouring one partner over the other becomes something that we want to pursue? Those are all things that are in the hopper for discussion,” Saretsky said.
WestJet posted a 20-per-cent profit increase in the three month period ending Sept. 30, with net earnings jumping to $138.4 million in the quarter from $116 million last year, after flying a record number of passengers.
While the company plans on announcing further details about Swoop in early 2018, including which destinations the ULCC will fly to, Saretsky said ancillary fees on Swoop will be similar to that of American ULCC’s.
WestJet’s vice-president of commercial operations Ed Sims said the carrier will be a “competitive weapon” for the airline.
“The advantage we have clearly through Swoop’s low fares is that it will be the weapon we will use for the competitive discount, and limit the impact that (competitive activity) has on WestJet.”