WestJet Rewards - WestJet weighs need for diversified fleet

http://www.canada.com/business/WestJet+weighs+need+diversified+fleet/5915567/story.html

CALGARY - WestJet could make a decision in the next year about diversifying the kinds of planes it flies, says CEO Gregg Saretsky.

"You won't see a second fleet type flying in 2012, but we might make a decision in 2012 about a direction to expand into a second fleet type," he said in interview. "I think it's a question of when, not if."

I wonder if it is more likely that they are looking at:


smaller aircraft to be able to add more Canadian cities to their network
Larger aircraft to be able to fly to Europe, etc.
A mix of 1 and 2.


I also wonder if this will be a large scale diversification or the addition of a limited number of aircraft (i.e. maybe acquiring used 757's to serve Hawaii from AB in order to avoid leasing in the future). I would think that any diversification would have to be on a relatively large scale in order to justify the costs of additional fleet type(s).

I wonder if it is more likely that they are looking at:


smaller aircraft to be able to add more Canadian cities to their network
Larger aircraft to be able to fly to Europe, etc.
A mix of 1 and 2.


I also wonder if this will be a large scale diversification or the addition of a limited number of aircraft (i.e. maybe acquiring used 757's to serve Hawaii from AB in order to avoid leasing in the future). I would think that any diversification would have to be on a relatively large scale in order to justify the costs of additional fleet type(s).

While I hear what you're saying WS suddenly buying dozens of a larger aircraft wouldn't fit their historic growth pattern, at least to me, as they tend to expand the fleet gradually rather than in leaps & bounds. "Incremental" was a word Saretsky used in the article and that in a way decribes how I think WS will approach this matter as it has others.

My guess is they'll go to larger planes to expand their route network beyond N. America and not downguage to compete with AC on smaller markets.

I think that WS wants to cement code shares to expand their reach across the oceans, with the exception of Hawaii because the Alberta/Hawaii routes are extremely successful and that a larger aircraft of their own to capture that market would be more ideal than leasing it. Having said that, I am sure WS would like to get into some smaller Canadian markets to bring down the fares in those markets where there's none to little competition.

While I hear what you're saying WS suddenly buying dozens of a larger aircraft wouldn't fit their historic growth pattern, at least to me, as they tend to expand the fleet gradually rather than in leaps & bounds. "Incremental" was a word Saretsky used in the article and that in a way decribes how I think WS will approach this matter as it has others.

My guess is they'll go to larger planes to expand their route network beyond N. America and not downguage to compete with AC on smaller markets.

You're probably right about an incremental approach. My thoughts were that past expansion typically saw new variants of exisiting airplanes being used as opposed to new types of aircraft, so no major additional costs with additions to the fleet to offset. While a rapid expansion might not be part of the current playbook, it also appears that they're drafting a new playbook.

I also wonder what implications this could have for their current fleet. For example, would they try to standardize IFE across the fleet? If they went with a smaller aircraft, would we see E75's, or CRJ's with Live TV, or would they go "bare bones" on a regional aircraft? If they decide to go intercontinental their satellite TV likely won't be of use (similar to problems on flights to Hawaii), I wonder if they'd switch from Live TV to a system wide AVOD system.

The future will be interesting. For a long time I've been of the opinion that WS would likely evolve to the point where it would become the country's 2nd major international/intercontinental carrier (in part to fill the void left by CP years ago).

2012 will be a year that a new IFE option will be explored and hopefully chosen. Aircraft deliveries starting now will be "dark" aircraft, meaning that, until a new IFE option is chosen, all new additions to the fleet will be without Live TV. It does not make economic sense to go through the expense of installing the system just to rip it out and replace it in a year's time.

2012 will be a year that a new IFE option will be explored and hopefully chosen. Aircraft deliveries starting now will be "dark" aircraft, meaning that, until a new IFE option is chosen, all new additions to the fleet will be without Live TV. It does not make economic sense to go through the expense of installing the system just to rip it out and replace it in a year's time.

IFE upgrade is badly needed. The screen is so small and I can never get half the tv channels to work.

Deliveries throughout the past year featured a newer, lighterweight seat frame and a larger IFE screen than in the rest of the fleet.

I'd prefer WS make a serious foray into short-haul routes with some sort of regional equipment. That would be a more profitable and easier to enter market than the jungle that is the international market. AC/QK is essentially unopposed in many small markets and if WS brought in RJs and lowered the prices it can only be good competition. WN has proven that you don't need to go far beyond your own borders to make money in the airline business, and obviously they think it's reasonable to diversify their fleet as well with the purchase of FL and their 717s. RJs would allow WS to run high frequencies on popular short-haul routes to really make a better stab at the business travel market.

You can't justify buying big equipment based on the success of Alberta-Hawaii seasonal service. It's cold and people want to get out, that's really all that market indicates.

You can't justify buying big equipment based on the success of Alberta-Hawaii seasonal service. It's cold and people want to get out, that's really all that market indicates.

It's just one example of a route that a larger aircraft could be used on profitably and no doubt there are enough others otherwise WS wouldn't be considering upgauging.

IMHO going larger makes more sense than going smaller as entering smaller cities limits the market share to a battle with AC whereas starting new nonstop routes like YYC-DUB, for example, with bigger equipment gives them the whole market to themselves.

WS made their mark pioneering routes like YEG-YLW and they have such a lock on some routes an attempted foray by AC into them a while back resulted in a quick about face a short time later. Were they to work with their codeshare partners and initiate unique routes and corner the marketshare and build fortress routes IMHO it's better than trying to fly to every small market in Canada which has a finite growth curve.

That is only MHO of course. :)

Smaller Aircraft: Vancouver - Red Deer, Edmonton - Lethbridge, Calgary - Medicine Hat
Larger Aircraft: Vancouver - Bangkok, Toronto - Rio de Janeiro

Smaller Aircraft: Vancouver - Red Deer,

YQF? There's small markets and there's tiny, nonexistant ones such as YQF. AFAIK since Swanberg Air shut down isn't served by any passenger service and is mostly used for general aviation. Goodness knows whether it's even rated for anything larger than light prop planes or has any facilities for handling scheduled passenger service.

Deliveries throughout the past year featured a newer, lighterweight seat frame and a larger IFE screen than in the rest of the fleet.

I must keep getting older planes :D

YQF? There's small markets and there's tiny, nonexistant ones such as YQF. AFAIK since Swanberg Air shut down isn't served by any passenger service and is mostly used for general aviation. Goodness knows whether it's even rated for anything larger than light prop planes or has any facilities for handling scheduled passenger service.

Red Deer is further from YYC and YEG than Abbotsford is to YVR. And the population difference is negligible. Red Deer Airport has in the past tried to lure WestJet, so obviously the airport is capable of larger aircraft. Clearly WestJet doesn't think that market can support a 737, but with smaller aircraft perhaps...

Red Deer is further from YYC and YEG than Abbotsford is to YVR. And the population difference is negligible. Red Deer Airport has in the past tried to lure WestJet, so obviously the airport is capable of larger aircraft. Clearly WestJet doesn't think that market can support a 737, but with smaller aircraft perhaps...

I once operated a WS charter flight for the DND into YQF, delivering cadets, so it definitely can handle a 737, but it is a short runway so shouldn't be used on a regular basis by a 737 due to wear and tear on brakes, etc.

Red Deer is further from YYC and YEG than Abbotsford is to YVR. And the population difference is negligible. Red Deer Airport has in the past tried to lure WestJet, so obviously the airport is capable of larger aircraft. Clearly WestJet doesn't think that market can support a 737, but with smaller aircraft perhaps...

Sorry but can't see it happening as YQF has virtually no history of scheduled passenger service excluding the charter and sporadic small plane intra-province service such as the aformentioned defunct Swanberg Air. Given it's location between two larger Canadian airports also isn't IMHO a positive as fares would be too high to warrant flying into it instead of driving from either YEG or YYC.

I could see WS opting to do macro before doing micro.

YQF? There's small markets and there's tiny, nonexistant ones such as YQF. AFAIK since Swanberg Air shut down isn't served by any passenger service and is mostly used for general aviation. Goodness knows whether it's even rated for anything larger than light prop planes or has any facilities for handling scheduled passenger service.


737 can land there and they usually do in the summer for DND charter flights.

The Scouts Jamboree is just outside Red Deer in the summer of 2013, so I would be happy to have flights there. But I think we'll be just as happy to fly into YYC and play tourist for a while too.

737 can land there and they usually do in the summer for DND charter flights.

It's been established that 737's can land at YQF though previous poster pointed out not without excess wear and tear because fo a shorter runway. However it's a moot point since WS is never going to fly 737's into YQF and I can't see them flying anything smaller in either as it's not an underserved market, it's a never served market that IMHO doesn't exist.

tcook052[/B];17707271]YQF? There's small markets and there's tiny, nonexistant ones such as YQF. AFAIK since Swanberg Air shut down isn't served by any passenger service and is mostly used for general aviation. Goodness knows whether it's even rated for anything larger than light prop planes or has any facilities for handling scheduled passenger service.

I was just responding to what YOU wrote. I never said it was practical or if there was extra wear or tear on the airplane but answering your question as to whether a larger plane could go there.

I was just responding to what YOU wrote. I never said it was practical or if there was extra wear or tear on the airplane but answering your question as to whether a larger plane could go there.

Yes but it was a fact that had already been established by YYCguy upthread.

My guess is that the incremental expansion will be domestic. There are a few markets that could use competition...., YYB, YBG, YQL comes to mind.

Increased code share with partners will take care of international destinations.

As for new fleet, DH 400 could be a candidate....unless RJ-200 are available.

Smaller Aircraft: Vancouver - Red Deer, Edmonton - Lethbridge, Calgary - Medicine Hat
Larger Aircraft: Vancouver - Bangkok, Toronto - Rio de Janeiro

I think the busiest non-WS served route in the country (# passengers) is YYJ-YVR; and the busiest non-served route (# flights) is definitely YWH-CXH (as it's the busiest route in the country)

Let's just pretend at the options;
1) Smaller A/C type. This is pretty much going to be either an ATR72-600 or DH8-400; opens up a lot of smaller routes like YYJ-YVR, frees up 737 (-600s) by switching smaller jet served routes to prop (YKA-YVR). Sub option, buy Porter, make "WESTJET PORTER" the regional of Westjet
2) Larger A/C type. Right now there's really only two options, 787 or A330. The A350/777 is too big to start as an new aircraft. likely the 787; this would open up routes (assuming they stay partners w/ DL/KL/AF) not currently served by any of them, allow using the '87 to Hawaii (and YYZ-Hawaii); unserved European routes like YVR/YYC-CDG/BER or even YVR-MAN/GLA. Optionally they could even buy Air Transa.

Either way, to compete globally they will need to
Join an alliance
Change their FF to work within that alliance
Have a J cabin on long-haul aircraft

In order for WestJet to start expanding internationally through codeshares, they're going to have to start putting their flight numbers on Cathay/JAL/KLM etc...

Looks like it could be smaller:
Mr. Saretsky favours first acquiring smaller jets to expand WestJet’s domestic network, which in turn will pave the way in the long term for larger aircraft for overseas flights.

Aircraft:
The Canadian-built Bombardier Q400 turboprop, already being used by Toronto-based Porter Airlines Inc. and Air Canada’s regional service, is on WestJet’s shortlist. Also on the shortlist is the French-Italian ATR 72 turboprop.

Destinations:
Cranbrook, Prince Rupert, Fort St. John and Dawson Creek in British Columbia; Lethbridge, Alta.; Saguenay, Que.; and Sudbury, Sarnia and Timmins in Ontario.

http://www.theglobeandmail.com/report-on-business/careers/careers-leadership/the-lunch/westjet-ceo-gregg-saretsky-plots-a-bigger-fleet/article2287680/page2/

Another article (http://www.theglobeandmail.com/report-on-business/westjet-sets-sights-on-air-canadas-title/article2288493/) from G&M on the WS fleet diversification.

It does look like the Q400 is a good bet for WS as it can cover routes that the CRJ or similar does for AC but for cheaper. I'd bet on the Embraer 170/190 as another serious option for WS, but think the Q400 is what we will see.

I'm kind of surprised to see that YSC is not on the list as it has to be the only city/metro area of 180-200,000 without any commercial air service of any kind (I discount cities that are within an hour's drive of an airport that has service). YUL is minimum 90 minutes away, and often more now with the driving issues in Montreal. YQB is starting to look like a good option these days for access to YSC, but lots of people also use BTV which is 2 1/2 hours away. Way back in the 70s and early 80s YSC had BOS and YQB service, but nothing since. I would think that WS could do really well out of YSC. The main downer being that there is no realy infrastructure at the airport other than a reasonably long runway.

A few years ago (maybe 8-10) Regional 1 tried Dash-8 service from YQF to YVR but it didn't last. There are certainly enough flyers in Red Deer but with YEG and YYC so close it makes no sense to have a connector to either of those cities. Only YVR would make any sense as a destination and/or airport to connect in, but why would you do that if you could just drive 75 minutes or less on a good day to YEG/YYC?

I read the Globe article with a certain incredulity. Are there really that many under-served markets? Also, what are the costs to WJ of acquiring the Q400?

As others have said, WJ is currently routing a lot of passengers via its partnership with AA. I don't see this coming to an end.

WJ recently acquired landing rights at LGA. Are the Q400 going to be used to fly YYZ/YUL-LGA? (If so, they are going to compete for leisure travelers with Porter flights to EWR).

Lots of unanswered questions in this article!

My guess is that the incremental expansion will be domestic. There are a few markets that could use competition...., YYB, YBG, YQL comes to mind.

Increased code share with partners will take care of international destinations.

As for new fleet, DH 400 could be a candidate....unless RJ-200 are available.

I think it will be Q400's, although AMR has lots of ATR72's available!

The 50 seat CRJ are complete dinosaurs and I can't think of anyone who was financially successful with those airplanes since before 9/11 and oil under $50 a barrel! The US carriers can't get rid of them fast enough!! No low cost carrier ever touched them!

A 70 seat turboprop is perfect. Having 100 seats when they already have a 116 seat jet with true trans-continental range would be silly. Chasing markets with 37 seats or less is silly. It's way too much effort for way too little reward.

I think we might see Turbo props on almost every route under 300 miles.

:)

I think it will be Q400's, although AMR has lots of ATR72's available!

The 50 seat CRJ are complete dinosaurs and I can't think of anyone who was financially successful with those airplanes since before 9/11 and oil under $50 a barrel! The US carriers can't get rid of them fast enough!! No low cost carrier ever touched them!

A 70 seat turboprop is perfect. Having 100 seats when they already have a 116 seat jet with true trans-continental range would be silly. Chasing markets with 37 seats or less is silly. It's way too much effort for way too little reward.

I think we might see Turbo props on almost every route under 300 miles.

:)

Totally agree here. I don't think the CRJ 200/700 has been that bad for some operators (Skywest seems to be making them work on the contracted flying they do--technically not low cost, of course, which you mention), but why go there if the Q400 is cheaper to operate and has decent comfort?

Isn't there an issue with ATRs and icing? I recall seeing a "Mayday" episode about this, which is why AMR moved their ATR ops to the Caribbean. Does anyone else run ATRs in countries with winter? There's got to be some. Did ATR fix the icing issues?

ETA: answered my own question - yes it seems ATR has done work to fix the issue but there's been three icing-related crashes, with ATRs being used in Europe in icing conditions. I wonder if people would feel comfortable flying in a plane with known icing issues? I have no idea.

I would not be comfortable.

Calm Air uses the ATR -42 out YWG in MB and northern ops so they can't be that bad in icing. Wouldn't bother me, but I don't see WS getting into those (or the larger variant) over the Q400, which is a very efficient and comfortable aircraft so I hear.

West Jet should just buy Porter, make it simple.

West Jet should just buy Porter, make it simple.

I think that if Porter's price tag reflected the fair market value of the company, it could happen.

But how do you figure out the value of Porter when it hasn't ever made any profit?!

Maybe the reason it hasn't made any profit is because they are convinced they have to use every slot available at the island airport to make sure no competitor can even get a foothold, even if the result of using every slot results in never making any money!

If that is the situation, it would make it almost impossible to sell! Even if someone bought it to shut it down, someone else would come along and make use of most or all of the slots!

It really seems like a "no-win" situation!

:)

Saw some vague stuff on another board that suggest Westjet is going to get up to 50 Q400's, to be operated by a contracted carrier.

Sorry but can't see it happening as YQF has virtually no history of scheduled passenger service excluding the charter and sporadic small plane intra-province service such as the aformentioned defunct Swanberg Air. Given it's location between two larger Canadian airports also isn't IMHO a positive as fares would be too high to warrant flying into it instead of driving from either YEG or YYC.

I could see WS opting to do macro before doing micro.

Global Edmonton just listed Red Deer as a possible city.

Saw some vague stuff on another board that suggest Westjet is going to get up to 50 Q400's, to be operated by a contracted carrier.
down to 40 now.

down to 40 now.
It always was 40, based on the announcement yesterday. The information on the other board suggesting "50" was never anything other than a guess from somebody who has no connection with WestJet.

Global Edmonton just listed Red Deer as a possible city.

Everything, including manned spaceflight, is possible. I'll believe it when I read the WS press release.

It always was 40, based on the announcement yesterday. The information on the other board suggesting "50" was never anything other than a guess from somebody who has no connection with WestJet.
also i wonder if it will be 40 firm orders or just a few FIRM orders and the rest speculation :)

also i wonder if it will be 40 firm orders or just a few FIRM orders and the rest speculation :)
It depends on the results of an RFP that will go out to the aircraft vendors, leading to a negotiation of terms that will lay out price, delivery schedule and contract flexibility, amongst other things.

We're not too far from wide-bodies either.

If all goes well, the carrier envisages ordering wide-body aircraft for flights to Europe and Asia as early as 2018.

http://www.theglobeandmail.com/report-on-business/westjet-workers-start-voting-on-regional-carrier-proposal/article2310910/