Westjet considers adding long-haul capacity
WestJet is considering adding long-haul international routes and has begun talks with
Boeing Co. and rival Airbus SAS about buying wide-body jets that could fly farther than its single-aisle fleet.
Discussions are preliminary and focused on availability, capability and pricing, WestJet chief executive Gregg Saretsky said at an investor presentation Thursday.
The airline has no definitive plans to purchase wide-body aircraft, and any decisions will probably be delayed until it’s satisfied with new regional unit WestJet Encore.
“There’s an opportunity for us to start exploring this notion of a possible wide-body longhaul international operations,” Saretsky said. The airline is just starting to review “what that might look like,” he said, and has no immediate plans to order aircraft.
Buying bigger planes and adding longer routes would give West Jet more ammunition as it seeks to win market share from Air Canada. Calgarybased WestJet resumed flights to New York’s LaGuardia Airport in June and plans to open its new regional unit by 2013 to serve locations now only reached by Canada’s largest airline.
“WestJet has been all about a game-changer recently,” said Walter Spracklin, a Torontobased analyst at Royal Bank of Canada.
“2013 is going to see a significant departure from the textbook low-cost carrier strategy. You’re seeing them now tap growth areas that go beyond that strategy.”
The new Encore unit’s first group of communities will be announced in early 2013. The company has placed an order for Q400 turboprops from Bombardier Inc. to supply that business.
“We’ve had a huge amount of interest expressed by Canadian communities from coast to coast looking for WestJet to liberate them from the high cost of air travel,” Saretsky said.
“Many of these communities are provided service by a single carrier with airfares for one-hour segments that are well above what we charge for a transcontinental flight.”
Total seating capacity will increase seven to eight per cent next year as WestJet rolls out more flights with its regional unit, the company said.
WestJet is also modifying its fleet of 737s, which have an average age of 5.8 years, to offer premium economy seating with extra legroom in an attempt to woo business travellers. At the same time, Air Canada is moving to open its own low-cost carrier with service to holiday destinations in Europe and the Caribbean.
Air Canada is also considering purchases of mid-sized jets amid growing confidence it will return to profitability next year after an anticipated fifth straight loss. The Montreal-based airline is in talks with Boeing, Airbus and Bombardier Inc. for more than 100 aircraft, chief commercial officer Ben Smith said.
Adding single-aisle models with the latest fuel-saving technology that can carry about 150 passengers could help Air Canada shed its status as North America’s leastefficient carrier. Its fleet is twice as old as that of discounter WestJet. “It’s always a good sign when they’re thinking about new plane orders,” said John Braive, vice-chairman at CIBC Global Asset Management.
“Your aircraft are starting to get older. You do have to upgrade to the newer type of planes, which have better wings, more room for passengers, better fuel efficiency.”