42 AVIATION WEEK & SPACE TECHNOLOGY/MARCH 30-APRIL 12, 2015 AviationWeek.com/awst
Brian Sumers Calgary, Alberta
In strategy shift, WestJet Airlines prepares
to take delivery of four Boeing 767s
A
decade ago, when WestJet Airlines had about 50 Boeing
737s, its executives calculated the airline would satu-
rate the North American market when its fleet reached
90-100 mainline narrowbodies. That left them wondering
whether to add new aircraft types or simply slow expansion.
Unlike its U.S. counterpart, Southwest Airlines, which has
stuck with 737s and only waded tentatively into international
markets, Calgary-based WestJet chose a more daring ap-
proach as its fleet count neared 100, moving first to build a
wholly owned regional subsidiary called WestJet Encore. In
June 2013, Encore launched in Western Canada with two Bom-
bardier Q400 turboprops. Now Encore has 18 Q400s, enabling
WestJet to expand its footprint.
The Encore network laid the groundwork for a larger exper-
iment coming this summer. In a move that could considerably
alter the airline’s trajectory, WestJet will begin flying four Boe-
ing 767s, all former Qantas aircraft that it will initially operate
around North America and from Edmonton and Calgary to
Hawaii. By mid-2016, they will be deployed on long-haul routes,
perhaps to Europe, Asia or the Middle East. An announcement
on destinations is expected soon.
Executives emphasize widebodies are a low-cost experi-
ment. Unlike the Q400s, which were bought new, WestJet
never seriously considered ordering new widebodies. But it
is already discussing future orders with Airbus and Boeing. If
WestJet can achieve 12% return on capital within two years, it
likely will proceed with an order. Executives are thinking big.
“With a network and partnerships like we have, why couldn’t
we have 30 or 40 [widebodies]?” CEO Gregg Saretsky tells
Aviation Week. “That’s ultimately where I think it goes. And
widebodies can fly 11 hr. We could do Asia. We could do Latin
America. We could do Middle East. We could do Europe. It
puts all geography into play.”
LAYING THE GROUNDWORK
Before WestJet could operate like a major network carrier, it
needed to streamline operations. The airline had been cobbled
together with a handful of used aircraft in 1996 and was not
built to sustain turboprop or long-haul operations. The found-
ers never expected it to fly east of Winnipeg, Manitoba.
One of its first changes was to switch its reservations system
to Sabre, a 2009 move that at first frustrated travelers but al-
lowed WestJet more functionality. Next, WestJet built codeshare
and interline agreements, including with Delta Air Lines and
American Airlines. Both relationships are expected to continue.
“Because of the way our net-
work has developed, it doesn’t
make sense for us to jettison
American and go with Delta or
vice versa,” Saretsky says, ac-
knowledging each might pre-
fer an exclusive relationship.
“Their choice is to have us as a
partner or not have us as part-
ner, given that Air Canada is
already in the Star Alliance.”
Another operational improvement came early last year,
when WestJet opened crew bases in Vancouver and Toronto.
Even with a mainline fleet of about 100 737s, WestJet had relied
on one base in Calgary, a system that was never efcient but
caused major problems during winter snowstorms.
A fourth major move happened last summer, when WestJet
began seasonal service between St. John’s, Newfoundland, and
Dublin with a 737-700. As with the 767s, WestJet called it an
experiment, saying it wanted to test selling transatlantic flights
on both sides of the Atlantic in multiple currencies. Previously,
it had only sold in U.S. and Canadian dollars. This summer,
WestJet is adding a similar route from Halifax, Nova Scotia,
to Glasgow, Scotland.
But the most vital improvement came with the Q400s. The
lack of a turboprop put WestJet at a disadvantage against
Air Canada, which has been able to profitably serve many
of Canada’s smaller communities with Beechcraft 1900s, de-
Havilland Dash 8s and Q400s operated by partners. In some
cases WestJet avoided markets, while in others it operated
once-daily 737s.
WestJet took delivery of 15 Q400s through the end of 2014
and will add 15 more by the end of 2016. It retains options for
another 15 in 2016-18.
The 78-seat Encore Q400s mainly feed hubs, though they
have other purposes. WestJet also is using them to connect
dots, allowing it to open new routes such as between Regina,
Saskatchewan, and Winnipeg. Soon WestJet also expects to
use Q400s to open new U.S. markets, perhaps rust-belt cities
it cannot profitably serve with 737s.
“I am much more excited about the Q400 opportunity than
the widebodies,” says Ben Cherniavsky, a Vancouver-based
analyst at Raymond James. “The widebody is a much more
competitive market. The beauty of the regional opportunity
in Canada is that it is a monopolized market. Air Canada is the
only airline that services a long list of destinations in Canada
that can’t be reached with a 737.”WIDEBODY PLANS
While WestJet may grow even if the widebody experiment
fails, just about everyone at the airline’s headquarters has high
hopes for the next expansion phase
The obvious initial international 767 destination is Europe,
since Glasgow and Dublin are already served. But Saretsky says
executives have considered deploying widebodies elsewhere,
perhaps to Asia. “Why not Shanghai or Beijing?” he asks.COMMERCIAL AVIATIONWidebody Dreams
WestJet uses its Bombar-
dier Q400s to compete
with Air Canada in smaller
markets. By the end of
2016, it expects to have at
least 30 of the turboprops.WESTJET AIRLINES