WestJet Rewards - New WestJet chief on the attack; targets Air Canada

http://www.montrealgazette.com/business/WestJet+chief+attack/2705257/story.html


Thirteen points to go - or thereabouts. That's roughly the additional share of domestic air traffic WestJet Airlines Ltd. plans to wrest away from Air Canada before the low-cost carrier trains its sights on the legacy airline's international network.

In an interview yesterday, the surprise new president of WestJet, Châteauguay-born and bred Gregg Saretsky, said there are no immediate plans to launch widebody aircraft service to far-flung destinations - "not in 2010 or 2011, at any rate."

"But I think when we believe we have our fair share of the Canadian domestic market, our fair share of the flow traffic, then at some point we'll say: 'We're out of opportunities in Canada, let's spread our wings across the ocean.' We're at 37 per cent now (of the domestic traffic), so we think we'll grow that to 50 per cent or so."

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Some analysts have also noted that grabbing market share will get progressively harder against Air Canada.

"But Air Canada has its own challenges," Saretsky noted. "We have a 14-year history of great guest service, very engaged employees, the top corporate culture in Canada, top satisfaction scores, a strong cash position and one of the youngest fleets (81 Boeing 737s) - and we have a cost structure that's 30 per cent lower than Air Canada's. Is it going to be tougher for us? Yeah, perhaps it will as we continue to grow. ... But I'd match us up against Air Canada any day of the week."

To start, Saretsky wasn't "born and bred" in Châteauguay, he grew up in Richmond, BC. Perhaps they're just trying to add some Quebec cred with that misinformation.

They've already reached the limits of 737-size cities in Canada if not the USA (Atlantic City, anyone). Sounds like he's trying to recreate CP, which could be fatal to WS.

Hmmm. So is he saying that WS will eventually leave the LCC model behind? Otherwise, all Y widebodies on TATL/Transpac flights will not generate the yield needed to compete against carriers who hold corporate contracts and receive premium feed from alliance partners.

Once over the ocean and LiveTV is no longer a factor, there's nothing special about WS' product that they can charge a premium for.

They've already reached the limits of 737-size cities in Canada if not the USA (Atlantic City, anyone). Sounds like he's trying to recreate CP, which could be fatal to WS.

I don't know what it would take to gain the additional market share that WS seeks, but I agree that another smaller aircraft will be needed to get more domestic share. Missing right now on too many routes is frequency. On top of that, some kind of deal with US carriers is needed. Until they can compete on the range of routes that AC can compete on out of the majority of cities in Canada, it will be tough to grow market share. For example, YQR-LAS is going great for WS, but with very limited flights. On non non-stop flight days, an overnight stop in Edmonton is needed top do LAS-YQR which makes little sense to most travellers. There is no way to compete with AC, UA, and Delta on a route like that out of YQR. And that is only one example of what playing field WS looks to want to get into. Can that be done while still maintaining what keeps WS profitable and succesful is the question.

Operating their own aircraft on TATL's may seem like a lovely idea but the cost of getting into LHR or LGW, for example, is not comparable to opening up another Canadian city.

I am one of those who would like to see WS step up, but from a business perspective that could be a very poor decision. Bigger isn't always better in terms of profitability...