Final approval came about two weeks ago, and WestJet is working on lining up codeshare and interline agreements, a process it estimates will take about two months. WestJet believes it can start service “in the back half of the year,” said Bob Cummings, EVP-sales, marketing and guest experience.
Cummings suggested Encore will look at nearly every US market reachable from WestJet’s hubs with a 78-seat Bombardier Q400 turboprop, and it appears likely WestJet would consider several rust-belt and Northeastern markets. That’s in addition to new US markets the airline is exploring with its Boeing 737s. “A market of 350 million people provides a lot of opportunity,” CEO Gregg Saretsky said.
WestJet Encore took delivery of its 16th Q400 in January, and it has committed to purchase another 14 through the end of 2016. It also has options for 15 additional Q400s between 2016 and 2018.
Thus far, WestJet is using the Q400s within Canada for four purposes. First, it is opening new markets that cannot support jet service. Second, it has been using them during off-peak times on routes that demand frequency, such as Toronto-Montreal. Third, it is using them to connect the dots in WestJet’s network, with one example being new flights between Regina, Saskatchewan and Winnipeg, Manitoba. And fourth, it has used the Q400s to increase service in smaller Canadian cities, where the carrier had flown once daily 737s. In those markets, WestJet has tried to schedule at least two departures—one morning and one evening.
Flying to Q400s to new US markets is a logical next step. In its first nearly 20 years of operation, WestJet generally avoided business markets to focus on its core strategy—flying Canadians to warm-weather vacation locales, such as Las Vegas, Los Angeles, Orlando, and many destinations in Mexico and the Caribbean. But WestJet has saturated those markets, and the airline is looking for other opportunities.
In doing so, WestJet believes it can carve out a larger slice of the corporate travel market in Canada. “Leisure has been our bread and butter,” Cummings said. “We are not at growth limits but we sit down and say, ‘We may have some other opportunities.’ Now it’s more of a portfolio approach.”
As part of that strategy, WestJet recently announced it would fly between Houston and Calgary beginning in September, a route that connects two important oil cities. That route, which will use a 737, was long on WestJet’s list of possibilities, but the timing was never right.
WestJet believes it will be able to make more US business markets work because of its codeshare deals with American Airlines and Delta Air Lines. Even in cities where the two US carriers aren’t particularly strong, both airlines send WestJet enough business to help drive profitability. “We need our airline partnerships to get to a certain level,” Cummings said.
Saretsky, a former executive at Alaska Airlines, acknowledged both US carriers might prefer an exclusive partnership with WestJet, but he said for now the plan is to stick with Delta and American. “Because of the way our network has developed, it doesn’t make sense for us to jettison American and go with Delta or vice versa,” Saretsky said. “Their choice is to have us as a partner or not have us as partner, given that Air Canada is already in the Star Alliance.”
One major drawback, however, is that WestJet isn’t in a position to pursue an immunized joint venture with another North American carrier. But Saretsky said WestJet isn’t ready for a joint venture, though he acknowledged that calculation might eventually change.
(Brian Sumers - ATWOnline News)
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