AC has clearly stated their focus is on profitable international routes while continuing to be competitive on domestic routes to feed into the internationals. Westjet and AC are now direct competitors on almost every significant domestic route. A protracted fare war between the two would result in losses for both and AC is in no position to justify loss-leader routes to their Board of Directors after just coming out of bankruptcy protection. As CEO of a publicly traded company, Westjet's Beddoe also won't get much support from his board for a money losing strategy that has no hope of success either. Westjet is altering their market strategy from a pure LCC to a bit more catering to the business market and definitely expansion on the transborder routes. Since domestic market expansion has little left to offer in terms of new routes, Westjet domestic growth would primarily be possible through market share increases on the current domestic routes. A strategy with limited potential for return without some incentives or fare war (non-starter).
Then there is Canjet on the Eastern horizon, taking a slow and deliberate expansion path. Not sure what their exec's are thinking these days. Some opportunity with Jetsgo out of the picture, but Canjet is surely the weakest significant player in the domestic market and they almost certainly don't want a fare war between AC and Westjet.