Originally Posted by
Shareholder
SFO is not a major tourist centre for the type of customer WS carries or wants. Its best US cities are heavily family-oriented vacation sun spots. SFO doesn't qualify on any of those counts. One of WS's keys to profits and loads is that more often than AC, it is selling families of 3 or 4 or more. That's the secret of making profits: more efficient to book 3+ seats on one res file than three separate transactions. LAX fits, but I've often thought WS would be better flying into John Wayne, closer to the theme parks.
It pulled out of YYZ-LAX because most Ontarians took their kids to Orlando and Disneyworld, rather than LA and Disneyland. That's why MCO is such a significant destination for it and other carriers along the eastern seaboard.
WS cannot survive on business travelers since its operating model is the very reverse of AC's which requires business travelers, topped up by back cabin vacationers.
And PHO of all places is a major vacation destination for Albertans and other from across the prairie at the height of winter. WS knows its core market and doesn't vary from what that is. When it does, it runs into problems.
I think the model that WS is using will attract business travelers eventually.
According to Jacques Kavafian at Research Capital, WS enjoys a cost advantage of 41% over AC. AC's yield premium is something like 4% over WS. That can mean exclusivity in some markets like YYC-YXX, YEG-YXX YYC-YXU, YWG-YXU and soon YEG-YLW and YEG-YYJ. As WS grows and frequency improves, more business travelers will gravitate to WS.
As far as YYZ-LAX goes, something other than a red-eye may make a big difference.