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WestJet to launch ultra-low-cost carrier 'Swoop’

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WestJet to launch ultra-low-cost carrier 'Swoop’

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Old Feb 5, 2018, 11:34 am
  #166  
 
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Could it possibly be as much trouble as manually adding known traveler numbers was?

If Swoop opens new routes to secondary US airports or revisits defunct US routes like YYC-SNA I guess I will see it as a positive thing. The severely negative response to Air Canada Rouge was because they went straight for routes like Vancouver to Los Angeles and immediately crossed the Hollywood commuters.

Last edited by Error 601; Feb 5, 2018 at 11:43 am
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Old Feb 5, 2018, 1:48 pm
  #167  
 
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The more Swoop takes over the flying done previously by WJ, the less value I see as a WJ reward customer. Price alone isn't going to sway me to Swoop after all it is a separate company with no connection to WJ. Flair and soon to enter Jetline will have that segment of the market and will compete very aggressively with Swoop. I don't see Swoop standing out among that group of airlines without any of the carry-over benefit included in the much touted WJ Mastercard or WJ rewards.
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Old Feb 5, 2018, 1:51 pm
  #168  
 
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Originally Posted by ericbkennedy
(As an aside, with Rouge, what benefits are still earned/applied? I assume there's much more crossover there than currently with Swoop. This all seems odd to me - why not treat Swoop as an extension of the Westjet network like Rouge or Jetstar/Qantas, rather than a totally separate brand.)
It is difficult to compare Swoop with rouge, since they operate on two very different business models.

Swoop is a true low cost carrier ... it cuts the frills entirely, and can therefore offer tickets at low retail prices which other airlines simply cannot match. You don't get much, but you don't pay much either. This is a perfectly valid business model, and it is a wide-open niche in Canada. Swoop should be quite successful.

Rouge is low cost only to parent company Air Canada. They reduce operating costs by paying rouge flight attendants and pilots half of what they pay mainline crews, and eliminate employee perks altogether (crews don't overnight after working a flight to Hawaii, for example, they deadhead back to save the hotel cost). So rouge is low cost to Air Canada. But rouge is NOT low cost to the consumer, because Air Canada charges the same retail price for rouge flights as they do for mainline service. When rouge was introduced, and some routes flew a mix of rouge and mainline flights, the ticket costs were identical regardless of which plane you stepped on. And when AC "rouged" some routes altogether, the air fares didn't drop one penny. This is why rouge can afford to provide frequent flier benefits to AC Altitude members, it cut its operating expenses but left revenues untouched. It is also why AC frequent fliers remain generally up in arms, because these folks are still being forced to pay mainline prices for what is a decidedly inferior product. They didn't get rouged. They got screwed, and no amount of crappy frequent flier miles makes up for that.

If you would rather Westjet took that approach with Swoop, then I suggest you be very careful what you wish for.
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Old Feb 5, 2018, 2:52 pm
  #169  
 
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I was one of those who was furious at the 'Rouging' of routes by Air Canada. It's why I'm no longer their customer, after about 12 years of FF status including 3 or 4 as SuperElite.

I wasn't upset, though, when I saw Swoop's launch. I didn't take this as an equivalent action (i.e. 'Swooping' of routes) by WestJet, and I don't see what they did as a negative thing. And to be honest, I think their strategy makes good sense. (And I'm very happy that they've stuck to their word in making this a totally separate airline, rather than following the path that Air Canada took. Rouge is nothing more than a significantly degraded level of service and comfort - at the exact same price - on selected routes.)

Swoop is flying YEG-YXX and YEG-YHM. It appears that WestJet won't fly into those YXX or YHM any longer. So are those routes "Swooped"? I suppose. But I see both YXX and YHM as being secondary airports in large metropolitan centres. You can fly WS from Edmonton to Vancouver (YVR). You can fly Swoop from Edmonton to Vancouver (YXX). Ditto for Toronto (YYZ and YHM).

I continue to have a choice, and I'm happy with it. And as long as this is the only 'route Swooping' strategy (i.e. secondary airports get Swooped, but WS mainline does not exit the market) I'll continue a happy customer of WestJet. Although I do understand that Swoop's launch will probably inconvenience some people -- i.e. who find either YXX or YHM to be more convenient or closer to a key destination.

Originally Posted by Sunny Day
If by their calculation, 99.9% of Swoop customers are not regular WJ customers, purely buying based on price, then what is the big deal giving your WJ regular customers (0.1%) the benefits while flying those few select Swoop flights that replaced the previous mainline routes?
By not offering any cross over benefits on Swoop, WJ risk losing business on their mainline routes from customers who are WJ Gold or who holds the WJ mastercard for the purpose of free luggage.
Why, then, wouldn't anyone and everyone flying on Swoop also first sign up for a WestJet Rewards account (and therefore be given frequent flier WJ dollars for flying Swoop) and get themselves the RBC credit card (and therefore get free checked baggage and a free companion flight on Swoop.) ULCC fares, but with non-ULCC benefits for everyone?!

As Symmetre said above, Swoop is a totally different animal than WestJet. Its pricing - and its entire business model - relies on (1) no 'extras' included in the bare-bones base fare and (2) if you want any extras, you pay for it.

I don't see how it would be feasible or sustainable for them to sell the significantly lower Swoop fares to 'WestJet Rewards' members and credit card holders -- but then let those members have all of the fare extras for free.
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Old Feb 5, 2018, 3:55 pm
  #170  
 
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As the business model for Swoop is different from WestJet and the bookings are through a reservation system that is not setup for codesharing, WestJet tickets can’t be sold or serviced through Swoop. The WestJet business model is now very much about connections and flow from Encore to mainline 737 to mainline widebody. Other than point-to-point between cheap airports (YYZ, YYC and YVR aren’t in that category) there isn’t any realistic way to “Swoop” WestJet routes. The mainline fleet of 737s is still expanding with Swoop being built from aircraft that were effectively lease returns. Over the next 10 years the WestJet 737 fleet will expand by 63 aircraft with no lease returns, or by 22 aircraft if every lease return is completed on schedule.
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Old Feb 5, 2018, 4:41 pm
  #171  
 
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If you can try to see it from my perspective, my beef is 2 routes that we used a lot, both mainline routes on WJ, YXX-YEG, YEG-YHM, are getting Swooped. Due to Flair coming in to compete head on with WJ on those 2 routes since 2016, prices have gone down by a lot. Great news for consumers. Who wouldn't like that right? As a WJ Gold customer, I have benefited from lowered prices due to Flair competing with WJ, and also at the same time I am still receiving Gold benefits, accumulating WJ dollar, and my family using the WJ mastercard - free luggage - while flying WJ on those 2 routes. We are happy.

Once Swoop comes in and replaces those 2 routes this summer, the already low prices today is unlikely to drop much lower, in my best estimation. But I will lose everything else if I choose to fly Swoop. No Gold benefit, no free luggage, no WJ dollar. I will be paying the same price but lose all the benefits. See why I am not that happy?
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Old Feb 5, 2018, 4:44 pm
  #172  
 
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Wink

Originally Posted by Sunny Day
The more Swoop takes over the flying done previously by WJ, the less value I see as a WJ reward customer. Price alone isn't going to sway me to Swoop after all it is a separate company with no connection to WJ. Flair and soon to enter Jetline will have that segment of the market and will compete very aggressively with Swoop. I don't see Swoop standing out among that group of airlines without any of the carry-over benefit included in the much touted WJ Mastercard or WJ rewards.

Do you really think Flair, with 156 seat, 20+ year old -400's, on their third management team in 18 months, or Jetlines, who have been all talk and no action, (and no capital), since Nov 2013, are going to be able to beat up Swoop?

For that matter, do you really think 20 year old 136 seat A319's, even fully depreciated, can compete with the economics of 3 year old 737-800's?

The best defense is a good offence.
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Old Feb 5, 2018, 4:58 pm
  #173  
 
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My observation is Flair is doing well. People are flying when they wouldn't have otherwise since Flair came on. Westjet started small with old planes too way back, didn't they? They were the underdog, look at them now.
I am cheering for Flair and Jetline or whoever is coming next. 2 airlines divvying up marketshare 50-50 is not good for consumers. Calling Swoop a separate company still does not change the fact that Swoop presents no added competition because any profit still goes back to WJ. Anyone regardless of their airline loyalty should be cheering for the upstarts and underdogs.
So Swoop has the full backing of Westjet, all the capital available to them, new planes, full resources at their disposal but "it is a separate company". So which is it?

Last edited by Sunny Day; Feb 5, 2018 at 5:05 pm
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Old Feb 5, 2018, 5:10 pm
  #174  
 
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Financially Swoop has to stand on it’s own feet, it doesn’t get subsidized by mainline. To be able to sell tickets at a given price, it has to have a different cost and revenue model from mainline that still needs to make a profit. No reason for it to exist if it is a loss maker.
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Old Feb 5, 2018, 7:04 pm
  #175  
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Originally Posted by HangTen
Do you really think Flair, with 156 seat, 20+ year old -400's, on their third management team in 18 months, or Jetlines, who have been all talk and no action, (and no capital), since Nov 2013, are going to be able to beat up Swoop?
Flair is on their 3rd management team in 18 months? Or New Leaf?
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Old Feb 5, 2018, 8:01 pm
  #176  
 
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Originally Posted by tcook052
Flair is on their 3rd management team in 18 months? Or New Leaf?
There have been 3 distinct groups running the ULCC business, New Leaf / Flair / Flair 2.0, since launch. That is not indicative of a successful business.

Here's some serious research on the ULCC space in Canada.

Read it and talk amongst yourselves.

https://raymondjames.bluematrix.com/...ca&source=mail
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Old Feb 9, 2018, 5:01 pm
  #177  
 
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ALPA Takes Legal Action Against WestJet and WestJet Encore

The ULP complaint and application for an interim order assert that WestJet and WestJet Encore management violated numerous provisions of the Canada Labour Code by, among other things:
  • Directly negotiating with pilots instead of with the union over key terms and conditions of employment at Swoop, an ultra-low-cost alter-ego airline which is slated to begin flying this summer;


https://www.newswire.ca/news-release...673568123.html
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Old Feb 10, 2018, 9:16 am
  #178  
 
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Originally Posted by FlyerJ
It appears that WestJet won't fly into those YXX or YHM any longer. So are those routes "Swooped"? I suppose. But I see both YXX and YHM as being secondary airports in large metropolitan centres. You can fly WS from Edmonton to Vancouver (YVR). You can fly Swoop from Edmonton to Vancouver (YXX). Ditto for Toronto (YYZ and YHM).
I think YHM is turning in to the GTA's equivalent of LTN (with YYZ as the ....... offspring of a threesome between LHR/LGW/STN... and BUF feels like BHX - most people I knew who rarely ventured out of the M25 would perceive the midlands as another country - personally, I've found both to be a very useful lower-hassle alternative when the routings work out. But I've totally overstretched that metaphor by now

Also - particularly if I'm travelling on my own - YYZ is still a more attractive option. I can get the 40 GO bus for a fraction of the cost of a crappy cab to/from the airport, lounge access is an option, less time spent in security lines as I have Nexus...

The more I think about it, the more this hypothesis has legs. Not quite sure how I feel about that... ;/
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Old Feb 11, 2018, 7:27 am
  #179  
 
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Originally Posted by tcook052
Flair is on their 3rd management team in 18 months? Or New Leaf?
What is interesting is how Flair for many years was in the employee transport business. Basically they were flying people in to Fort Mac. That was their core business. WestJet went after that business.

Now Flair is going after WestJets leisure travel business.

I think the symmetry of that arrangement is ironic and pleasing.
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Old Feb 11, 2018, 11:55 am
  #180  
 
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Originally Posted by Fiordland
What is interesting is how Flair for many years was in the employee transport business. Basically they were flying people in to Fort Mac. That was their core business. WestJet went after that business.

Now Flair is going after WestJets leisure travel business.

I think the symmetry of that arrangement is ironic and pleasing.
Using 20 year old 156 seat 737-400's....?

Back in the day, there were no shortage of 737-200 LCC operators, (starting with SWA), but then again, oil was under $20 a bbl.

How many 737-400 LCC / ULCC operators can you think of in the world today? And how many are operating with 156 seats?

And going head to head with 3 year old 737-800's with 189 seats?

Talk about an operating cost mis-match. It's not even close.

At least Porter managed to develop a monopoly airport, and made a fortune selling real estate, making the day to day viability of flight ops a moot point.

Flair has nothing of the sort.

It's no wonder Jim Rogers pulled the chute on taking any market risk on the operation. Anyone sinking capital into that operation needs their head examined and deserves to lose their wad.

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