Since WestJet has learned to sell in pounds and euros,
Saretsky suggests the carrier would not have much dif culty
selling in Chinese renminbi or Japanese yen.
“The Asian markets are less seasonal, and they are growing
much faster,” Saretsky says. “It might make sense to get in on
the ground fl oor and establish a position in a market that is
developing, especially if we can lean on a partner in the Asia-
Pacifi c region to help.”
Leading the charge to explore new markets is Bob Cum-
mings, WestJet’s executive vice president for sales, market-
ing and guest experience. A former cell phone company ex-
ecutive—he helped launch the fi rst mobile-phone network
in Romania—Cummings is bullish about entering emerging
markets before low-cost competitors. In many markets, there
is only one or two established airlines, often fl ag carriers not
known for nimbly reacting to competition
“From a commercial end, to jump in there right of the bat,
there’s some sex appeal to do that,” Cummings says. “But when
you do all the operations and languages and everything else,
you also want to ease into it.”
This suggests WestJet might start
with Europe. But Europe has a couple
of drawbacks. First, it is well covered by
Air Canada and Air Transat. Second, it is
highly seasonal, with demand dropping in
winter. Still, Saretsky says WestJet could
make Europe work.
“It’s a market that has a massive sum-
mer peak,” he says. “You look at Air
Transat and all the places they are serving
from Budapest to Prague. And remember
when Air Transat does it, they are serv-
ing these markets all point-to-point. When
they fl y from Toronto to Nice, France, they
live and die on the demand between To-
ronto and Nice. We are a network carrier,
so our whole network west of Toronto
would connect with our widebodies.”
Cherniavsky says WestJet should prob-
ably avoid Europe, noting Air Canada has
historically struggled deploying widebod-
ies in winter. “You have to avoid the trap
of what Air Canada has done, which is to
structure a fl eet and a labor pool that is
entirely organized around the opportunity
to fl y Canadians everywhere they want to
go in July and August,” he says.
Some Asian markets would solve that
problem. But Cherniavsky argues Shanghai or Beijing may not
be the answer, especially if new, longer-range, aircraft arrive.
“Who doesn’t talk about emerging markets these days?” he says.
“I think everyone is obliged to have a plan for China. I know
they have a track record of being somewhat creative with their
capacity. Australia perhaps? There are a lot of alternatives.”
FUTURE GROWTH
Executives say they have not decided which new widebodies
might work best. They say they are considering the Boeing 777
and 787 as well as the Airbus A330neo and A350.
But what if the widebody experiment fails? WestJet would
still grow and modernize, though likely at a less aggressive rate.
It intends to remain a 737-dominant carrier, and it plans to
modernize and upgauge. Westjet is disposing of its 10 oldest
737-700s; it sold some in 2014 and will sell the rest this year,
replacing them with 10 new 737-800s.
Longer term, WestJet has ordered 65 Boeing 737 MAX air-
craft to arrive in 2017-27. The airline has fl exibility with lease
renewals and estimates it will have 120-164 737s by 2023. It now
has 107 737-600s, -700s and -800s. For Encore, WestJet could
have as many as 45 Q400s by 2018, up from 18 now.
Whether or not the carrier adds widebodies, it should be
able to increase revenues by capitalizing on more ancillary
opportunities and adding to its share of the corporate travel
market. Historically, WestJet has been a leisure-oriented car-
rier with a simplifi ed fare structure and few fees, but recently
that has changed.
The airline started unbundling its product and last year
began charging some travelers for their fi rst checked bag. The
bag fee has gone so well Saretsky admits WestJet should have
instituted it sooner, but executives feared it would dilute the
brand. Next the airline may add a row of seats to its 737-800s.
Executives also suspect WestJet can take a larger share ofCanadian business travel. To serve business demand, it will
begin flying in September between Calgary and Houston.
That is about as close to a pure business route into the U.S.
as WestJet has ever attempted, but executives believe it is
achievable because of strong oil economies in both markets
and feed from partners.
“Leisure has been our bread and butter,” Cummings says.
“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.”
But those are minor matters. What is more likely, executives
say, is that WestJet will succeed with widebodies.
“I think the low-cost, widebody, long-haul model has proved
itself in all sorts of geographies,” Saretsky says. “So why not
North America? It’s a matter of time.” cAviationWeek.com/awst AVIATION WEEK & SPACE TECHNOLOGY/MARCH 30-APRIL 12, 2015 43
JOEPRIESAVIATION.NETHeadquarters................. .Calgary, Alberta
Year founded................... 1996
Key hubs...................... .Calgary and Toronto
Annual revenue................ .C$3.98 billion (U.S. $3.15 billion)
Annual net earnings........... .C$284 million (U.S. $224.1 million)
Operating margin.............. .12%
Full-time employees........... .8,700
Destinations.................... 93
Current f eet.................. .107 Boeing 737-600s, -700s and -800s and 18 Bombardier Q400s
Available seat miles (ASMs).... .25.6 million (54.3% domestic, 45.7% international)
Load factor.................... .81.4%
Cost per ASM (CASM)......... .C13.68 cents (U.S. 10.83)
CASM excluding fuel
and prof t share.............. .C9.15 cents (U.S. 7.24)
Average aircraft utilization..... .11.8 hr. per day
Average stage length.......... .936 mi.WestJet is adding Bombardier Q400s and Boeing
767s, but the Boeing 737 remains the core of its fl eet.