robsaw

AFAIK Alaska and American don't have any joint ventures. They have an "expanded partnership" from 2020 but not a JV.

newfbc

isaacchambers

IF westjet strays into other partnerships not affiliated with Skyteam or DL interests. DL will turn away quickly. Look at AS/DL back in the day. AS didn’t follow what Atlanta wanted and suddenly they were frenemies and insisted the other Skyteam Europe partners to stop partnering too.

id love WS and AS to announce something, I think given thier host of partners, it shouldn’t run afoul of thier partners or OW.

cirrusdragoon

WS was partnered with AA in the mid 2000’s . They left. Clearly they did not see a benefit to working with BA or AA. Perhaps what is old is new again and a fresh management team will see a new interest?

FlyerJ

I'd love it if WestJet would develop stronger partnerships - whether JV, alliance, FF reciprocity with others - too.

Previous WS leadership said a firm, unequivocal "no" to alliances. Current WS leadership has affirmed that ... and has just said "no" to the Delta JV. (One could argue that it was 'paused' or 'put on hold', but all signs seem pretty clear that it's a PR-friendly "no".) And it seems incredibly unlikely that they're halting the Delta JV because they've decided to look at other carriers to enter into a JV with.

Bottom line: the new, AVH version of WestJet doesn't need a JV, and the new WS has to be a less desirable JV partner for other carriers.

Under AVH's new direction, there's really no conceivable reason they'd want or need a JV or membership in an alliance. They've pulled back to be a mostly-regional, mostly-holiday carrier. AVH has said he wants to reverse course and take them back to their good ol days as an LCC (the opposite of the last leadership team who initiated the Delta JV, and who were pushing them towards being a full service, mainstream carrier). That seems to be reflected in an intentionally weaker product where "good enough" is now the goal, i.e. weaker Premium offering than under the old leadership, a weaker LCC-style buy-on-board in Y class, the lounge program halted. A mostly regional, mostly holiday carrier, targeting Canadian vacationers with point-to-point flights, with a 'good enough' level of product. That does not need a JV with a big American or any major international carriers. And they don't need an alliance membership -- the type of airline that AVH is pushing towards doesn't fit the alliance model.

And, like a marriage, JVs require two partners. But it seems unlikely that any major foreign carrier would see any benefit in entering into a JV with WS today for the exact same reasons.

I would be thrilled if this wasn't the case. I'd love for my primary airline to have JVs with DL or AM or others, and if I could get SkyTeam benefits on them. But von Hoensbroech has been super clear of his direction. He's fine with just codesharing with Delta ... it helps both WS and DL. But that basic level of relationship is all they want or need now. Based on his stated direction for WS, there's zero chance of a JV or any form of alliance membership in the foreseeable future. We can speculate all we want about maybe-the-Delta-JV-is-just-temporarily-paused or maybe American or maybe Alaska ... but there's no chance of any of it happening. I'm pretty sure those options are only being discussed on FlyerTalk, not in WestJet's head office.

cirrusdragoon

Well perhaps with good measure they see no need to chase after business travellers who yearn for an alliance based carrier, seeing as business traveller market is decimated and will remain so for quite some time,

“Deloitte Insights’ just-released corporate travel study puts on a brave face, acknowledging that the segment is growing slowly but noting “a limited upside.” With spending is only expected to surpass two-thirds of 2019 levels by the end of the year, the report’s authors conclude that “corporate travel will likely be smaller than it was prior to the pandemic.”


https://www.forbes.com/sites/suzanne...avel-comeback/

Frequentlander

Agreed.

Before the Pandemic I spent 30 years on the road like James Brown, traveling to remote (and occasionally not so remote) sites. It was seen as an essential part of the work. Then when COVID hit, we adapted. It wasn't ideal but we managed. There were some consequences. As travel restrictions have loosened, we are not going back to business as usual. It's "travel when necessary but not necessarily travel". It's going to stay that way. So now I moan about MS Teams instead of 737MAX washrooms..

aerobod

For my IT consulting work I was travelling 3 out of 4 weeks right up to Mar 2020, since then I have spent 3 days at client sites, everything else has been remote. Projects have been delivered on time and with the same artefacts and team collaboration as happened before.

In many ways the Pandemic forced investment in systems for remote work on both the provider and corporate user side, that investment alleviates the need for a lot of the face-to-face meetings that used to happen, besides the aspect of changed work practices and worry over not being able to collaborate without direct interaction in the same room.

tracon

UA and DL differ with this opinion.
Maybe Canadians are just slow to get back on the bandwagon.

https://www.businesstravelnews.com/P...ge-Cos-Rebound

https://travelweekly.co.uk/news/air/...arter-revenues

Error 601

As far as Canadian business travel goes, it's my suspicion that insane hotel rates are becoming an issue as already brutally austere travel policies alone can no longer keep costs down.

In general I think it depends on what you're doing and what investments were actually made and what skills were developed by the rank and file.

I'm working on a project right now as a consultant and three of the four vendors who presented showed-up in person from Denver, Vancouver and Toronto while one Zoomed in from Edmonton in what might be described as the "Worst Zoom Call with Grandma Ever". Their proposal is strong, but their presentation was ridiculously bad.

The client's incumbent security vendor is the same, painful Teams calls, screen sharing their NHL bracket window, lots of background noise as they're taking calls from their bullpen.

I think remote work has created some bad habits as people come to treat external or customer contacts exactly the same as their remote team.

And those guys need to get on a plane.

Symmetre

I just wish WS would figure out what it wants to be and then go ahead and do it. Quit screwing around leaning one way then the other, adding Q400 feeder routes then reconsidering them ... introducing an FF program that amounted to nothing ... getting widebodies, introducing new business class and talking about expanded overseas routes and JVs with Delta ... then pulling out of eastern Canada altogether and now talking about being a Calgary-focused leisure airline.

For God's sake, just pick a strategy and go with it. Then - and only then - I may fly with you again.

Until then, there's not a hope when they keep changing business strategies almost by the week.

Does WS have anything even remotely resembling a long-term vision? It sure doesn't seem like it, and they've offered no evidence whatsoever that they do. Everything has been totally short-term and reactionary. It does NOT inspire confidence.

Gigantor

I have to agree. I am making a trip this week to Toronto and will be staying two nights at a Marriott property using points.
After that, I will be staying in Hamilton, as the Toronto hotel rates are way too high.

lsquare

How is it expensive?

cirrusdragoon

The first problem is that forecasts of the financial benefits of alliances may be optimistic. Much airline financial reporting is fiction anyway — there are too many accounting tricks and differences in international accounting standards for any figures to be regarded as 100% accurate. In particular, the airlines’ own ability to calculate alliance benefits is questionable.

Incremental cost and revenue calculations of any strategic move are very difficult, particularly when revenues and costs are being apportioned with another airline with different accounting periods, methodologies etc.Some airlines conveniently forget to calculate the tangible costs of an alliance, but there are many — for example the cost of IT systems’ integration, increased overhead, greater FFP redemption etc. And even if all the tangible costs of alliances are included in forecast figures, in most cases calculations do not include the non–financial costs of alliances.

These include:

• Loss of control. Decision–making in a global alliance is collective, not individual. And will one airline tend to dominate a global alliance over the long–term?
• Brand dilution. Airlines risk being only as strong as the weakest member of alliance, and a customer’s poor experience with one alliance member will affect the brand reputation of others.
• Exposure to problems at other alliance members. From union unrest to safety concerns, the principle of all for one and one for all also has a downside.
• A re–regulation backlash. Another cost of the increasing global alliance trend is regulatory concern about anti–competitive practices — e.g. the requirement for slot surrenders for approval of the British Airways/American link.
• Culture clashes. Will member airlines’ staffs be able to work with each other? This so–called “soft” aspect of alliances is often overlooked, but differences in mundane practices such as timekeeping, attitudes towards customers etc. between two airlines’ workforces can often lead to disparagement and resentment from one set of staff to another.

Of course, putting figures on these non tangible effects of alliances is an extremely difficult task, but it is one that must be undertaken if airlines want to make the correct strategic decision.

Another factor that may distort logical cost/benefit appraisals is the possibility that certain airline managements believe that joining an alliance will help paper over problems at their own airline. It may be easier to try to join a global alliance in the hope of achieving an instant boost in revenues rather than address fundamental problems at their own airline (almost always high costs and/or union problems). This may particularly be the case when an airline is going through a privatization process: joining a global alliance is sexy and appealing to investors; hard–bargaining with an intransigent union is not.

aerobod

A typical cost elevation factor for being in one of the major alliances is 1.1, that is 10% increase in CASM. I’ve seen that factor used with the Business specialists before, when my data analytics team has done cost modeling for various scenarios, The expectation that the alliance benefits the revenue stream by a certain factor, too, but unless the benefits add 15% or more to total RASM, the investment required for alliance membership is just not worth it. The typical major cost drivers are:

- Increased lounge coverage
- Higher level of frequent flyer benefits and rewards
- Payment into alliance marketing and admin org
- Lack of planning and execution flexibility to respond to market changes that instead need to be coordinated with other alliance members
- Increased admin costs around revenue attribution and schedule coordination

The benefits of the alliance have to be closely aligned with frequent flyers who pay for higher revenue products. I don’t think WestJet can build enough market share organically in that area, they can only steal market share from Air Canada, which so far has proven to be difficult due to not being able to build enough frequency on enough routes to be competitive with them across the full network.