WestJet eyes widebody service to Europe, emerging markets

Although WestJet Airlines continues to explore the possibility of flying widebody aircraft to emerging markets in Latin America, Asia and the Middle East, the carrier still believes it can make money by launching new service to Europe, despite considerable competition on many key routes.
                                                                        
The Calgary-based carrier will not make an announcement on which international markets it will serve with its four used Boeing 767s until early this summer, but CEO Gregg Saretsky told ATW the airline is evaluating some unusual markets for a low-cost carrier (LCC), such as Beijing and Shanghai.

Still, most analysts expect WestJet will initially deploy the widebodies to Europe in summer 2016, and once there they would face significant challenges from two strong incumbent carriers: Air Transat and Air Canada. Perhaps after that experiment, observers suggest, WestJet might turn its attention to more exotic markets.

Despite the competition, WestJet believes Europe would work, at least seasonally, because of high demand among Canadian travelers. “It’s a market that has a massive summer peak,” Saretsky said.
 
Rather than seeing Air Transat—the largest charter carrier in Canada, with 27 Europe destinations—as an impediment, Saretsky said WestJet views it as sign that there’s more demand out there than Air Transat can satisfy. “When they fly from Toronto to Nice, they live and die on the demand between Toronto and Nice,” Saretsky said. “We are a network carrier, so our whole network west of Toronto would connect with our wide-bodies.”

Air Canada rouge would also be a fierce competitor, though WestJet believes it has a better product and stronger brand than its key competitor. WestJet should, for example, have slightly more seat pitch than rouge, which offers 31 inches on its Boeing 767s. “I think the jury is still out on how guests are receiving that,” Saretsky said about rouge’s tight seating. 

Still, Raymond James analyst Ben Cherniavsky said there’s not much room for new capacity across the Atlantic, though he commended WestJet for making one route—from St. John’s, Newfoundland to Dublin—work last summer. He suggested WestJet will have more trouble leveraging its cost advantage over competitors on long-haul routes. But even if WestJet can take advantage of the summer peak, Cherniavsky said the airline will need to figure out what to do with the aircraft the rest of the year. 

“You have to avoid the trap of what Air Canada has done, which is to structure a fleet and a labor pool that is entirely organized around the opportunity to fly Canadians everywhere they want to go in July and August,” he said. 

As for emerging markets, Cherniavsky said there’s a different between evaluating them and actually launching service. “Who doesn’t talk about emerging markets these days?” he said. “I think everyone is obliged for having a plan for China.”

(Brian Sumers - ATWOnline News)