Sopwith

Fiordland

I though the main purpose of Swoop was to have an airline that can be used to discourage institution investment in startup ULCC. The threat of an airline that can go head to head with upstart ULCC is critical. Yes, Air Canada benefits just as much as WS.

That said, Swoop staff in IROP should be able to buy seats on WS to accommodate passangers with little impact to the bottom line even if Swoop is paying full Y fares it is doing so to its parent.

aerobod

tracon

This is internal money.


This is money leaving the WS group.
Swoop may meet cost targets chartering elsewhere, but the overall group suffers.

mathemagic

Absolutely true, but when humans have their own books to report they tend to get tunnel vision. I've seen this in many other businesses where the subsidiaries only think of themselves and their targets rather than what's good for the whole. It's just human nature. This will never change unless the performance metrics change.

aerobod

If using a spare aircraft subsequently affects mainline's ability to recover from an IROP due to Swoop using that aircraft, WestJet from a brand perspective will have a better recovery "promise" than Swoop and will incur higher recovery costs. The affect on the company as a whole financially may be better if Swoop finds a recovery option externally, or more likely as a ULCC will only exactly meet their tariff requirements from a legal perspective, nothing more.

In the recent Swoop cancellations due to one aircraft being out of service for routine maintenance and a second aircraft requiring an unscheduled engine rebuild due to a failed oil seal, WestJet could not affect it's own flying schedule by finding a spare for Swoop, it would have affected their operations too much. Swoop also wasn't able to find an external charter either at the right terms or from a pure availability perspective, so they elected to recover passengers in a piecemeal fashion.

Swoop has fiscal freedom in their operations and doesn't have to use WestJet resources if they can find solutions elsewhere more cheaply, the way they budget (from my experience before I retired from WestJet) is that WestJet offers a service at their economic cost with no markup, Swoop can take it, provide the service themselves or select elsewhere if they can get it cheaper. If you look at just the IT side that I'm most familiar with, Swoop takes about 10% of their services for systems such as maintenance and IFEC from WestJet, operates about 40% of services such as crew management and analytics themselves in a commodity cloud environment and uses different external suppliers than WestJet for services such as reservation and departure control.

If you try to operate a ULCC using services designed for another airline operating model, those services will be operated at a loss in most cases, the fallacy that you can expand into profit through volume has caused most airlines within airlines to fail in the past. It may look stupid from the outside to not use the services of a parent company when they are available, but each service case (including IROP recovery) has to be ruthlessly evaluated on the impact to the company as a whole.

Losing a few customers due to bad press is built into the ULCC business model, price is the only selling feature, any customer service is only a consequence of providing the absolute minimum service at the lowest price. Bearing in mind Swoop has flown over one million customers so far and even with the 23 cancellations this month, they have still averaged over 98% completion, so have IROPed less than 20,000 people. Most months this year they have cancelled around 10 of 1,000 flights, in July it will be around 30 I expect. Seasoned ULCC customers have contingency plans if their flight doesn't happen and know that most of the time they will successfully arrive for a low price, others don't know what they are getting and will never fly them again. Ryanair wrote the book on this, Swoop is following that book very well, most ULCC failures have crumbled under the negative "customer service" strain due to not following the pure model and subsequently not being profitable.

My advise to frequent fliers is that ULCCs are probably not for you, they meet a different market requirement from what most will expect.

james dean

I see a-lot of Frequent Flyers on Easyjet, in fact they have a FF program.
I really appreciate the up-front option/speedy boarding for a few more euros on your fare.
In the line up to board I've seen many with FF tags etc.
But I realize ULCC in Europe is a different market than in Canada...

aerobod

Easyjet has never been a ULCC, it came from the LCC mould, although they do compete with Ryanair in many markets. It has always flown into more mainstream airports and had some added frills (such as the current ability to use Gatwick Connect with WestJet). Although they are theoretically a point-to-point airline with no connections (a ULCC hallmark), they do offer connecting services after a fashion with the ability to buy multiple segments in the same purchase. It's prices are generally higher than Ryanair, but so is it's convenience and service level.

james dean

Oh OK, I won't disagree with you...their fares are dirt cheap so I assumed they fit the ULCC

Sunny Day

What contingency plan would a Swoop customer need to make? "Boss, my flight just got canceled, they are telling me that the earliest they can get me home is 7 days from now. Can you cover for me?" Buying a cheap ticket does not mean all of a sudden you can take another week of unplanned vacation. Even the once a year leisure traveller has obligations back home.

ricktoronto

The plan is to know it's the ULCC model and you've recourse to next to nothing when things go arse over teakettle and then buy a ticket on a proper carrier from day one. $50 or whatever isn't a practical savings for zero peace of mind.

aerobod

tcook052

This is getting somewhat comical as who really has the flexibility to plan for a week-long delay in the fulfillment of their travel for even "non-critical" travel? If Swoop temps me to Vegas with its ultra low pricing it's my fault for expecting them to get me to & from my destination in a reasonable amount of time? Delays and cancellations are to be expected and I think if asked most flyers would accept both as possibilities a fraction of the time however would venture few if any think a week-long delay to be reasonable regardless of the fare paid.

aerobod

james dean

So are you saying, in a nutshell, if you want(need) to get somewhere forget Swoop because you didn't pay enough for your fare..