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Old Oct 7, 10, 4:50 am   #1
 
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WestJet may partner with American Airlines

Seems like the Delta deal may be falling through. I think American is better anyway

http://www.financialpost.com/news/We...610/story.html
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Old Oct 7, 10, 11:10 am   #2
 
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At some point Westjet is going to have to realise they do not have a dominant negotiating position with their potential US airline relationships.

First WN deal fell through because of technology issues. But the cost to bring WN systems up was only about $5 million, do obviously WN did not see $5 of profit potential from this venture. That and WN pilots got their nickers in a knot over lost flying. When they restricted WN to maximum codeshare of 2% of WN ASMs, it pretty much sealed the faint of the WN and WS relationship.

Second potential deal was with DL. I have heard from WS insiders the deal was negotiated with exNW people out of MSP. Maybe their unsigned deal with MSP folk did not pass muster with ATL masters. In any event there is much more pillow talk as to why this deal as also fallen through

So now its round three with another potential US bride, this time American. Remains to be seen how this deal will pan out (if ever). There is one question to ask the WS Big Shots "have the AA discussions gotten to the point of discussing equal flying opportunities for AA pilots?" Way back in the late 90s the issue of equal flying opprtunities tripped up CP, they had to transfer some flying over to AA at the American Pilots Association demand. The issue is particularly problematic for the Hawaii and LAS routes, the APA will try and get some flying from WS to even out the ASM distribution between AA and WS. Again this has all happened before, actually it was Greg Saretsky that was on the CP negotiating team so he has seen this dance before.
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Old Oct 8, 10, 2:19 am   #3
 
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. The issue is particularly problematic for the Hawaii and LAS routes, the APA will try and get some flying from WS to even out the ASM distribution between AA and WS.
YYC/YEG-Hawaii might work out if WS can convince AA to bring a 757 in to do the job instead of WS paying Air Finland to do it.
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Old Oct 10, 10, 12:23 pm   #4
 
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YYC/YEG-Hawaii might work out if WS can convince AA to bring a 757 in to do the job instead of WS paying Air Finland to do it.
Not likely solution to the issue. The issue is that American's pilots will demand equal flying or flying in their favour (e.g AA must do equal amount of flying or total amount of flying must be larger for AA). Further compacting this issue is that Hawaii is about 30% of the transborder ASMs and LAS is another 25-35%. If AA applies its entire transborder operation to the codeshare agreement, they will still not equal WS operation. Therefore WS will not be able to bring its own metal into AA hubs and might have to transfer some existing flying to AA.

While getting AA to operate AB-Hawaii would help to solve the problem, this presents some major obstacles.
1) AA does not have a 757 base on either end of the route. To get a/c and crews to operate this flight, AA would have bring in 757 from either DFW or ORD to YYC and flood the existing market (currently served by MD80 and ERJ respectively). This will make the existing flying unprofitable.
2) AA is short of 757 capacity as they are sending some airframes in Atlantic. Moving capacity from profitable domestic and Atlantic flying onto marginally profitable leisure transborder flying is a tough financial pill.
3) AA cost structure is among the highest in North America, this will further pull down and likely eliminate any profit for the route.
4) Westjet relies upon their Vacations division to maximise the profit on the Hawaii runs (they need commission from hotel and package sales). Bringing AA onto the route eliminates the portion of profit from air operations.

Overall AA is a poor fit for WS due to:
1) militant pilots union that is known for killing codeshare/revenue share opportunities in the past (CP/AA in the 90s, limit growth of Eagle operations, scope limit on 70 seat RJ while AA watches DL and UA eat their lunch).
2) hub system that does not complement Canada to USA traffic flows. JFK is good for eastern Canada, ORD is slot constrained, MIA is to far away, DFW is a good option but a little far away compared to DFW (UA-AC) and SLC (DL), LAX is good option, but T4/T5 is filled up so connections would be brutal with WS in T2 and AA in T4.
3) AA high cost structure would mean that WS brings profitable flying into the codeshare while AA brings break even or worse flying.
4) AA is too distracted with their alliance issues (Atlantic ATI with BA/IB, Pacific ATI with JAL) to worry about codeshare with WS.
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Last edited by WR Cage; Oct 10, 10 at 12:36 pm.
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Old Oct 11, 10, 9:16 pm   #5
 
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AA is a terrible fit. Southwest was the best fit wise due to hub in LAS.
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Old Oct 12, 10, 10:24 am   #6
 
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Well the Southwest deal is dead and if indeed the Delta talks are waning and if AA is deemed to be a poor fit, what are the remaining carriers that would be a good fit for WS?
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Old Oct 14, 10, 1:11 pm   #7
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Well the Southwest deal is dead and if indeed the Delta talks are waning and if AA is deemed to be a poor fit, what are the remaining carriers that would be a good fit for WS?
Virgin USA? Just kidding but at the rate at which U.S. Airlines are merging and WS goes through "potential partners" there won't be many left soon.
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Old Oct 15, 10, 1:58 pm   #8
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Old Oct 16, 10, 11:52 am   #9
 
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Well the Southwest deal is dead and if indeed the Delta talks are waning and if AA is deemed to be a poor fit, what are the remaining carriers that would be a good fit for WS?
Jetblue. Only problem is their hubs (JFK, LGB, BOS?) don't have WS service.

B6 is a great match - similar systems (B6 did a reservations cutover to Sabre that caused similar havoc to WS), very similar flight experience. Just too bad their hubs don't match.
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Old Oct 16, 10, 3:00 pm   #10
 
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Jetblue. Only problem is their hubs (JFK, LGB, BOS?) don't have WS service.

B6 is a great match - similar systems (B6 did a reservations cutover to Sabre that caused similar havoc to WS), very similar flight experience. Just too bad their hubs don't match.
Not sure what the current slot situation is at LGB, but maybe B6 could add LGB (or LAX although they seem to be rather limited from there)-YYC and JFK-YYZ to tie into WS.
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Old Oct 17, 10, 6:03 pm   #11
 
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JetBlue and WestJet have similar routes. I don't see why someone would want to fly YYZ-JFK-MCO/FLL/MBJ when they can fly direct. There might be a few route options that would open up but I really don't see the benefit.
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Old Oct 18, 10, 7:43 am   #12
 
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JetBlue and WestJet have similar routes. I don't see why someone would want to fly YYZ-JFK-MCO/FLL/MBJ when they can fly direct. There might be a few route options that would open up but I really don't see the benefit.
I was looking more from the US to Canada side. I agree with not much in the US that B6 could offer to WS (who would bother connecting in JFK to get to ORD, IAD, or AUS from YYZ?). But Caribbean might be something to look at. Puerto Rico for sure, and I'm sure their frequency to other islands is more than WS.
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Old Oct 18, 10, 10:53 am   #13
 
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Originally Posted by Hypnotize View Post
JetBlue and WestJet have similar routes. I don't see why someone would want to fly YYZ-JFK-MCO/FLL/MBJ when they can fly direct. There might be a few route options that would open up but I really don't see the benefit.
Jetblue flies to over 50 US cities out of JFK, yes some of the routes are duplicated by WS on a nonstop basis out of YYZ however there is a lot of opportunities to pick up passengers flying to secondary cities that Westjet cannot serve on their own. A codeshare with B6 would improve traffic on JFK to YVR, YYC (switch from EWR), YYZ, YUL, and summer time YHZ. Florida to Canada would enhance the WS nonstop services and provide for year round service where only seasonal flights currently exist. Another great gem for B6 tie up is that B6 os weak in the Western US outside of transcon. There would be no major push to flow Western Canada transborder traffic through a major hub (PHX, LAS, PSP, etc are all major point to point routes that westjet serves greater than daily).

Also Jetblue's TrueBlue program is much more aligned with Westjet Frequent Guest program and direction. There would not be the push to have Westjet upgrade the FFP to meet international airlines standards (such as with Skymiles, AAdvantage, etc.).

Where Jetblue falls down is with their Western USA program. Current base of LJB is difficult for WS to justify on a daily n/s basis from YYC, YVR, YEG, etc.
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Old Oct 18, 10, 5:03 pm   #14
 
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Ah, I love rumours...

While we're on the subject of rumours, WS might not be all that good of a fit for Jet Blue. Since Jet Blue is partly owned by Lufthansa, there is the ongoing rumour that Jet Blue might end up joining *A which would make it a partner with AC over WS.
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Old Oct 19, 10, 4:23 pm   #15
 
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Can LGB take international flights? There's no customs facilities, is there? Is this like a SNA situation?
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