WESTJET FLYING HIGH
WestJet Airlines, which began flying in 1996 to just five western Canadian cities, continues to soar. The Calgary-based company announced last week it is expanding on both ends of its service — in the ultra-low-cost market and in the faraway international field.
The airline is buying 10 Boeing 787 Dreamliners to fulfil its long-haul aspirations. The Dreamliners are 20 per cent more efficient than the Boeing 767s it now flies to Europe. Given that fuel is its single largest expense, the costsaving is sure to be appreciated.
The wide-body jets, which, thanks to the firm’s strong ledgers will be bought without borrowing, will allow WestJet to fly to new destinations in Asia and South America, and add to its European service. WestJet will launch its ultra-low-cost carrier later this year with the hope of gaining the business of some of about 5.5 million travellers who cross into the U.S. each year to take advantage of bargain airfares.
WestJet could use help from governments and agencies on this side of the border to ensure the success of its deep-discount airline. Costs, from security to airport improvement fees and landing charges, are a drag on the competitiveness of Canadian airlines.
The downturn in the Alberta economy, which has caused $1 billion to evaporate from provincial travel revenue, is a compelling reason for the company to look farther afield, including to far-off destinations that were previously unreachable with its current jets.
Forty per cent of WestJet’s flights are connected to Alberta in some fashion, so seizing opportunities in growing markets will be to the advantage of shareholders as well as the company’s partners and suppliers.
The airline has never shied away from a challenge. Calgarian Clive Beddoe and other investors started the airline with just 220 workers and three aircraft. Beddoe, who now serves as board chairman, noted that people questioned whether the airline could survive in 1996, given the fact other newcomers had failed.
“My only response was, ‘just watch us.’ I tell you the same thing today. Watch us,” he said of the company’s latest ventures. “We’ve proven the naysayers wrong in the past.”
WestJet is, quite simply, a Calgary success story. For all the talk by politicians about diversifying the economy, the airline is proof that the task of creating employment and shareholder wealth is best left in the hands of passionate entrepreneurs, not the government.
We look forward to watching WestJet continue to gain altitude.