British Airways CEO would welcome WestJet alliance

WS739 · Post by **WS739** » Thu Dec 14, 2006 1:37 pm

By Jeffrey Jones

CALGARY, Alberta (Reuters) - British Airways Plc (BAY.L: Quote) would welcome an alliance with low-cost Canadian carrier WestJet Airlines Ltd. (WJA.TO: Quote) now that it has beefed up service between London Heathrow and Canada, its chief executive said on Thursday.

British Airways began nonstop service this month to Calgary, Alberta, with five flights a week aimed at taking advantage of Alberta's booming oil-driven economy as well as the popularity of the Rocky Mountains as a tourist destination.

CEO Willie Walsh and other executives were scheduled to meet with WestJet's top brass in Calgary this week, but Walsh cautioned that it was merely a "courtesy call."

"If there were an opportunity to do something, we'd certainly be pleased to look at that," he told reporters.

WestJet is the country's second-largest carrier after Air Canada (ACa.TO: Quote), which now faces more transatlantic competition from British Airways. WestJet is known for its growing domestic network and expansion into a handful of U.S. destinations.

"I've watched WestJet with interest just to see the way they've developed and I think they're a good airline providing good competition. I think that's important," Walsh said.

WestJet Chief Executive Clive Beddoe has often said that alliances with other carriers are in the cards.

But plans to switch to a new reservation system allowing code sharing or other hookups have been delayed several times.

Robin Hayes, British Airways' vice-president for the Americas, said many costumers already book their own connecting flights with Calgary-based WestJet.

Besides Calgary, his airline flies to Montreal, Toronto and Vancouver. It plans to add a sixth weekly Calgary flight in March. It flew to Canada's oil and gas center for a brief period in the early 1980s.

Meanwhile, Walsh said he believed the current round of consolidation among the world's airlines is good for the industry as there is still too much capacity for demand.

Among recent deals, US Airways Group (LCC.N: Quote) bid $8.6 billion for bankrupt Delta Air Lines Inc. (DALRQ.PK: Quote) in November and United Airlines parent UAL Corp. (UAUA.O: Quote) and Continental Airlines Inc. (CAL.N: Quote) are said to be in preliminary merger talks.

WJA 14.310 +0.250 +1.78 676,409

WSTAC · Post by **WSTAC** » Thu Dec 14, 2006 8:34 pm

I hope they announce it by tomorrow

, because otherwise I need to book a confirmed ticket by monday!

But in all seriousness, this is fantastic news for WestJet. With all the recent speculations about One World, this would be a giant step in that direction. Since BA announced their 5 time weekly service to YYC, there have been many discussions around WS (at least in our department) about there being reasons other than just profit for BA to show up with their 777.

I guess only time will tell.

bmc · Post by **bmc** » Fri Dec 15, 2006 4:45 am

WSTAC wrote:I hope they announce it by tomorrow , because otherwise I need to book a confirmed ticket by monday!

But in all seriousness, this is fantastic news for WestJet. With all the recent speculations about One World, this would be a giant step in that direction. Since BA announced their 5 time weekly service to YYC, there have been many discussions around WS (at least in our department) about there being reasons other than just profit for BA to show up with their 777.

I guess only time will tell.

There are good flow markets out of YYC over Europe. At one point, more passengers from Canada transited over LHR as a European gateway, than AMS and FRA combined.

YYC is a very strong market right now. BA will do well.

RB-211 · Post by **RB-211** » Fri Dec 15, 2006 11:38 am

This hook up has been rumoured for a while. Whether anything comes from it is yet to be seen. One thing is for sure though is that BA will want something from WJ and vice versa. Both airlines will be big winners but in my opinion WJ could gain a huge advantage on its competition in Canada. Lets not also forget that Cathay would be part of this as well. AC must be watching this closely as it will have big implications on its operation. The LHR YYC route is doing very well, and a 6th weekly service starts in the spring.

Should be an interesting New Year..................

invertedattitude · Post by **invertedattitude** » Fri Dec 15, 2006 12:40 pm

There is another thread about this in the main forum.

In regards to something I posted there, when do you WJA NG drivers think you'll be heading across the atlantic? Everybody else is doing it with NG's every day.

Come on join the fun!

WS739 · Post by **WS739** » Fri Dec 15, 2006 1:26 pm

WJA 14.610 +0.390 +2.74 1,325,280 T
WJA.A 14.450 +0.250

Its nice to make a little extra green before Xmas

tonysoprano · Post by **tonysoprano** » Fri Dec 15, 2006 1:52 pm

AC must be watching this closely as it will have big implications on its operation. The LHR YYC route is doing very well, and a 6th weekly service starts in the spring.

Should be an interesting New Year..................

Really? How so? BA and AC have been competing to LHR from YYZ, YUL and YVR for a very long time. AC loads on these routes are among the strongest in our system despite the fact that you use better equipment (for now). What's so special about YYC? I wouldn't get too excited RB. You'll do well, we'll do well. Happy holidays mate.

Rebel · Post by **Rebel** » Fri Dec 15, 2006 2:55 pm

tonysoprano wrote:
AC must be watching this closely as it will have big implications on its operation. The LHR YYC route is doing very well, and a 6th weekly service starts in the spring.

Should be an interesting New Year..................
Really? How so? BA and AC have been competing to LHR from YYZ, YUL and YVR for a very long time. AC loads on these routes are among the strongest in our system despite the fact that you use better equipment (for now). What's so special about YYC? I wouldn't get too excited RB. You'll do well, we'll do well. Happy holidays mate.

Have to agree last time BA only stuck around for less then a year however I really like the BA flight crew, superb folks, both on and off the flight..

arf · Post by **arf** » Fri Dec 15, 2006 3:04 pm

I think it would have some implications for AC, though 5-6 flights daily being fed by some WJ traffic is not going to eat into AC's LHR business too much. What a deal does it provides another option. I fly LHR a few times a year out of Saskatchewan and prefer to fly through YYC, but AC does not always have the best fare through YYC for me and makes me go through YYZ, which I don't like as much.

bmc · Post by **bmc** » Fri Dec 15, 2006 3:35 pm

tonysoprano wrote:
AC must be watching this closely as it will have big implications on its operation. The LHR YYC route is doing very well, and a 6th weekly service starts in the spring.

Should be an interesting New Year..................
Really? How so? BA and AC have been competing to LHR from YYZ, YUL and YVR for a very long time. AC loads on these routes are among the strongest in our system despite the fact that you use better equipment (for now). What's so special about YYC? I wouldn't get too excited RB. You'll do well, we'll do well. Happy holidays mate.

BA wouldn't enter the market unless they believed it was big enough to gain a slice. There is a sizeable market to Europe from YYC and YEG for that matter. AC will do just fine competing against BA. The Star Alliance network collectively holds 28% of all LHR slots compared to BA's 32% of slots. Star has done an admirable job of coordinating and trading those slots smong their partners. AC has excellent connections onto Lufthansa, British Midland, Swiss, Austrian, SAS.

Any new entrant to a market will be felt. AC will feel it. I doubt BA planes will be empty. In fact, this past Monday I was transiting through Heathrow Terminal 4 when the YYC flight was called. I wandered over to the gate to see if I recognized anyone and also to check out the load. The gate area was packed. Sure, we're close to Christmas, but Dec 11th is not when the loads historically peak out.

arf · Post by **arf** » Fri Dec 15, 2006 3:45 pm

Right now we're seeing a bit of a spike in YYC international traffic due to the almost complete lack of snow in Europe. Apparently ski operators in the Rockies can't meet demand due to the influx of European tourists who normally go skiing in Europe but are coming here instead. BA's YYC run is a well-timed debut as all those people have to get over the ocean somehow. Link that with the less cyclical business travel and it looks pretty good for the amount of service YYC is seeing from LHR.

RB-211 · Post by **RB-211** » Fri Dec 15, 2006 3:49 pm

Tony,

Hope Santa is good to you. I think I made a boo boo when I said that AC will feel BA operating the LHR/YYC route. They will for sure especially on the premium side of things but this was not the main point. One route does not add much pressure, but an alliance will.

If WJ joins Oneworld or just teams up with BA/CX, Air Canada will feel competitve pressure rise considerably. London and Hong Kong are bread and butter routes for AC and with passengers now given a choice, it is clear to see what will happen. BA has only added one new route to its North American runs in 10 years, and that is YYC. The boss says more to come and his visit to the fellas at WJ this week only proves that things are moving forward.

I am sure all Canadians will welcome better choice and competition. BA/CX/WJ are not doing this for the hell of it so again, should be an intersting 2007.

Arf: The YYC run is certainly good news for skiers in the UK etc., but the main thrust in to southern alberta was not due to that. The black stuff and the companies that pump it, move it and refine it were the driving force behind the re-launch of the route. Some of the biggest oil companies in the world are massive BA clients........

bmc · Post by **bmc** » Fri Dec 15, 2006 3:57 pm

arf wrote:Right now we're seeing a bit of a spike in YYC international traffic due to the almost complete lack of snow in Europe. Apparently ski operators in the Rockies can't meet demand due to the influx of European tourists who normally go skiing in Europe but are coming here instead. BA's YYC run is a well-timed debut as all those people have to get over the ocean somehow. Link that with the less cyclical business travel and it looks pretty good for the amount of service YYC is seeing from LHR.

Arf...I'm in Switzerland. This past autumn has been the warmest since weather recording started in 1775. A world cup ski race in Val D'Isere was recntly cancelled. I have the family coming over for Christmas from Canada and we have a mere sprinking in the Alps.

arf · Post by **arf** » Fri Dec 15, 2006 4:06 pm

RB-211 wrote: Arf: The YYC run is certainly good news for skiers in the UK etc., but the main thrust in to southern alberta was not due to that. The black stuff and the companies that pump it, move it and refine it were the driving force behind the re-launch of the route. Some of the biggest oil companies in the world are massive BA clients........

Totally agree with you on that. But I think that some of the better loads (and I expect this will continue through the winter months) are being helped by the mild weather in Europe. Calgary's growth due to oil production has been so dramatic in the last few years that it is driving growth in all sorts of sectors, which of course (as you note) is driving demand for more air service.

arf · Post by **arf** » Fri Dec 15, 2006 4:08 pm

bmc: the mild weather sure is unusual for Europe--really bad for winter-related tourism. For other, who are not there to ski, etc., the mild weather is probably pretty pleasant!

whiteguy · Post by **whiteguy** » Fri Dec 15, 2006 11:19 pm

av8rpei wrote:There is another thread about this in the main forum.

In regards to something I posted there, when do you WJA NG drivers think you'll be heading across the atlantic? Everybody else is doing it with NG's every day.

Come on join the fun!

Who is everbody else? Out of the 3 airlines you listed in the other thread only 1 has 737ngs and they don't run them across the pond. LH and LX flights are all operted by Privatair with 737 and A319s with 40-60 seats on them. Not quite the same as a LCC.

tonysoprano · Post by **tonysoprano** » Sat Dec 16, 2006 9:50 am

Whiteguy.
You beat me to it. I think the only way to run a narrow body across the ocean is with big leather seats (the kind you have in your living room), lots of free booze and gorgeaus, nordic fa's. Not what I would call Clive style service. AC was to start this back in Oct using 319's but never did due to lack of aircraft. Privatair have been very successful with no other competition.

Four1oh · Post by **Four1oh** » Sat Dec 16, 2006 3:35 pm

how would a trans-atlantic flight compare to a hawaii flight for length? Why would people care on trans-atlantic when they sure don't seem to mind over the pacific?

invertedattitude · Post by **invertedattitude** » Sat Dec 16, 2006 4:07 pm

whiteguy wrote:
av8rpei wrote:There is another thread about this in the main forum.

In regards to something I posted there, when do you WJA NG drivers think you'll be heading across the atlantic? Everybody else is doing it with NG's every day.

Come on join the fun!
Who is everbody else? Out of the 3 airlines you listed in the other thread only 1 has 737ngs and they don't run them across the pond. LH and LX flights are all operted by Privatair with 737 and A319s with 40-60 seats on them. Not quite the same as a LCC.

A 737-700 is a 737-700 however.

whiteguy · Post by **whiteguy** » Sat Dec 16, 2006 5:39 pm

av8rpei wrote:
whiteguy wrote:
av8rpei wrote:There is another thread about this in the main forum.

In regards to something I posted there, when do you WJA NG drivers think you'll be heading across the atlantic? Everybody else is doing it with NG's every day.

Come on join the fun!
Who is everbody else? Out of the 3 airlines you listed in the other thread only 1 has 737ngs and they don't run them across the pond. LH and LX flights are all operted by Privatair with 737 and A319s with 40-60 seats on them. Not quite the same as a LCC.
A 737-700 is a 737-700 however.

There is a big diffrence between 60 seats and 140 seats.

tonysoprano · Post by **tonysoprano** » Sat Dec 16, 2006 6:41 pm

Four1oh (and the pei guy).
Yes, probably the same leg time but very different customer. Transatlantic service is quite different. If the eqipment is full pax (140+) you will be limited to Britain (certainly not a year round vacation hot spot). Might work seasonally but not year round. Clive would also have a heck of a time getting slots in LHR but I guess GAT would do from YHZ. He might also get some objection from new buddy BA (that alone would kybosh any plans of transatlantic dreaming). Privatair has targeted business travellers from the heart of Europe to N. America with a an "elite" business class service. Hawaii pax are not the same. All they require is the free booze. I know it's hard to resist, but unless Clive gets you bigger equipment and changes the "model", it's out of your league. Sorry bro.

bmc · Post by **bmc** » Sun Dec 17, 2006 2:39 am

tonysoprano wrote:Four1oh (and the pei guy).
Yes, probably the same leg time but very different customer. Transatlantic service is quite different. If the eqipment is full pax (140+) you will be limited to Britain (certainly not a year round vacation hot spot). Might work seasonally but not year round. Clive would also have a heck of a time getting slots in LHR but I guess GAT would do from YHZ. He might also get some objection from new buddy BA (that alone would kybosh any plans of transatlantic dreaming). Privatair has targeted business travellers from the heart of Europe to N. America with a an "elite" business class service. Hawaii pax are not the same. All they require is the free booze. I know it's hard to resist, but unless Clive gets you bigger equipment and changes the "model", it's out of your league. Sorry bro.

Getting slots at LHR isn't a problem. Getting slots when you want them is.

Privatair isn't targeting business travellers. They're targeting airlines that have a specific business market that could be well served with 40-60 business class cabin. They're not interested in getting into the airline game. They have a niche right now which could be jeoparidized if they went with one alliance exclusively, which I don't think they'll do.

Privatair has a B767-300ER coming soon. Not quite sure what they will do. Their B757 rarely flies.

If WJ is partnering with BA, where is the value in WJ flying to Europe? They will never reach the market strength and market reach that BA could bring them. Operating a dedicated BBJ type of operation for BA a la Privatair could work on the right market, but BA may be doing a Privatair deal as well. AC considered it earlier this year but it's not going to happen now.

tonysoprano · Post by **tonysoprano** » Sun Dec 17, 2006 8:30 am

bmc
How many LCC operate out of LHR? Can you name them?

RB-211 · Post by **RB-211** » Sun Dec 17, 2006 9:09 am

Boys,

The link between BA/CX and WJ will involve connections in Canada for both flag carriers. Will WJ operate to LHR? I don't think in the very near future. YHZ-LHR is the only route I could see them doing if it were to happen. BA will not give up routes between CAN/UK unless it feels they don't warrant a wide body.

This is about connections, route structure, partnership etc and will simply provide more traffic to all parties involved.

Tony LCC are planning on using LHR. As we speak your Star Partner Mrs Bishop is planning on running his clapped out old 737's (BMI BABY) to LHR in the very near future......Thats if BA does not buy them and grab all the slots. Watch this space.

tonysoprano · Post by **tonysoprano** » Sun Dec 17, 2006 9:27 am

RB.
OK.