WestJet eyes smaller planes

[YYCcrew]

WestJet eyes smaller planes
BRENT JANG

April 14, 2009

TRANSPORTATION REPORTER

After faithfully ordering workhorse Boeing 737s over the past 13 years, WestJet Airlines Ltd. WJA-T is studying the merits of adding smaller planes, envisaging a bold departure from its single-fleet strategy.

The Calgary-based carrier, founded in 1996 with just three Boeing 737s, is pondering using smaller aircraft for regional routes as it develops contingency plans in case Air Canada and its Jazz affiliate scale back service.

WestJet has 78 Boeing 737s in its fleet, and by 2013, it expects to take delivery of 43 more of the jets, which seat between 119 and 166 passengers, depending on the series.

But as WestJet evolves, it needs to consider taking the step of ordering smaller planes, said Bob Cummings, WestJet's executive vice-president of guest experience and marketing.

"We would be remiss if we weren't looking at certain scenarios," said Mr. Cummings, declining to say whether WestJet is interested in planes built by Montreal-based Bombardier Inc., Brazil's Embraer SA or other firms.

He said WestJet is revisiting its single-fleet strategy, but he played down any direct links between the carrier's study of a second fleet and speculation from some industry analysts that Montreal-based Air Canada's financial woes could force it to further shrink its network and also disrupt Jazz Air Income Fund.

National Bank Financial Inc. analyst David Newman said yesterday that Jazz may slash its monthly distribution of 8.38 cents a unit by half for the next nine months, as the Halifax-based regional airline tries to conserve cash to help refinance a $115-million borrowing deal maturing next February. He said Jazz, which flies on behalf of Air Canada, could potentially offer its services to WestJet.

Mr. Cummings declined to comment about Jazz, but in general, he emphasized that WestJet prefers internal growth over mergers and acquisitions.

WestJet has plenty of growth opportunities to deploy Boeing 737s in Canada, Mexico and the Caribbean, without even factoring in Jazz's turbulence and the possibility of debt-ridden Air Canada filing for bankruptcy protection, he said.

"We don't feel any time pressure to go to a second fleet," he said in an interview from Calgary. "But there is definitely a tipping point where this organization needs to seriously consider going to a second fleet. It just makes sense that in the life cycle of this organization, we would move beyond the consideration phase."

Devoting itself to one aircraft model, WestJet has been able to keep maintenance costs in check, and pilots can also be rescheduled on shifts without worrying about retraining.

But WestJet's strength is its corporate culture, and the competitive advantage of friendly service would be "transferable to a second fleet," Mr. Cummings said. "We believe we would do well in shorter-haul markets."

WESTJET (WJA-T)

Close: $12.55, up 40¢

http://www.theglobeandmail.com/servlet/ ... y/Business

[joe to go]

Ahhh yes, of course, look who wrote the article.

[SMP]

Edited

[roger.roger]

I wonder if their looking at those scary turbo-props?

the Q would be a nice option but they would loose their 787 options

[Troubleshot]

I think this would be a good move by WestJet...sure bringing in a second type into the mix would be difficult, but seeing first hand how efficiently WestJet operates I believe they could make it work.

[joe to go]

SMP

I am amazed that there haven't been any new CADORS in the last 5 days. However, I'm sure SLU has ran out of PITON!!

Peace Out 2w's and pditty!!

Joe

[Jastapilot]

If you're gonna go and add a second type, and add a whole bunch of costs to your operation, you had better go bigger, not smaller. I really doubt this is even being considered, but Bob has to keep'm wondering, I guess.

[twinpratts]

Yawn. Must have been a slow news day...

[ravensrule]

Definitely a slow news day, and more of the same "We look at everything..."
This article is about Porter but I have highlighted the bottom of it that relates to this topic:

Porter Airlines charting an aggressive expansion plan
Scott Deveau, Financial Post Published: Tuesday, April 14, 2009
http://www.financialpost.com/news-secto ... id=1496264

As carriers around the globe reel from diminished demand, Porter Airlines is charting an aggressive expansion plan that includes the possibility of partnering with U.S. carriers and potentially expanding its brand out West, according to Robert Deluce, the airline's chief executive.

"We've got numerous short-term growth opportunities," Mr. Deluce said Tuesday in an interview, "but certainly an expansion of Porter from the East and moving West is possible. We've always thought the brand was exportable."

While those plans are a little further out, destinations like Boston, Washington, and Philadelphia remain on Porter's radar in the near-term, as are flights to Windsor, Sault Ste. Marie, Timmins and Sudbury, as the airline takes on new planes, he said.

The carrier will add a tenth aircraft by the end of the week, two more by May, and another six this fall, Mr. Deluce said.

In the meantime, Porter is busy upgrading its reservation system to allow for code-share agreements with U.S. carriers in places in Newark and Chicago within the next six months, he added.

"Both of those locations make really good sense to offer some down-the-line destinations that are beyond the points we serve," he said.

While the privately-held Porter doesn't make its books public, Mr. Deluce maintains the airline has been profitable since June 2007. While the brand has struck a chord with urbanites, its fleet of fuel efficient Q400s and virtual monopoly on Toronto's City Centre Airport is helping it along.

This has certainly caught the attention of its competitors, including WestJet Airlines Ltd., which continues to grow as well in the downturn and hasn't ruled out the possibility of acquiring a carrier like Porter in its efforts to add a second aircraft type to its fleet.

Sean Durfy, WestJet chief executive, has been intrigued by the short-haul carrier and called it a "wonderful niche product" in a recent interview.

He also said he wouldn't rule out the possibility of WestJet taking a swing at it in the future. "When we look at strategy, we look at everything," he said.

Chris Murray, CIBC World Markets analyst, said while an acquisition of Porter would be "unlikely," WestJet looking at entering the short haul market isn't. He noted WestJet's international exposure is already somewhat covered off with code-share deals with Southwest Airlines and Air France-KLM.

WestJet still intends to grow its fleet from 78 Boeing 737s to 121 by 2013, but Bob Cummings, WestJet vice-president of guest experience and marketing, said the airline would like to capture more of the estimated $2-billion short-haul market.

"We're in no hurry or not pressured to go to another fleet type," he said. "Having said that... there is likely to be a tipping point where we're hitting diminished returns with single-fleet of aircraft." He pegged that at about 170 aircraft before WestJet would need to look to other aircraft for growth.

It is going to be another 5-10 years minimum before we hit 170 aircraft.

[SMP]

SMP

I am amazed that there haven't been any new CADORS in the last 5 days. However, I'm sure SLU has ran out of PITON!!

Peace Out 2w's and pditty!!

Joe

We did end up with a CADOR from our pairing! Piton and Mount Gay are in short supply after our little time on island time.

Take care,

SMP

[ehbuddy]

http://www.cardatabase.net/modifiedairl ... d=00007754


Either way............it does look sharp in Westjet colors.

[rudder]

The JetBlue pilots are still pissed about their EMB rates....

[tonysoprano]

Either way............it does look sharp in Westjet colors.

Have to agree. looks pretty sharp.

[ziggy]

I like the look of these better.....

http://www.diecastaircraftforum.com/att ... st-jet.jpg
http://www.aviationpictureweb.com/Oddbins/WJ777.jpg
http://www.aviationpictureweb.com/Oddbi ... ncorde.jpg

[twinpratts]

Wow!

[mikeecho]

If you're gonna go and add a second type, and add a whole bunch of costs to your operation, you had better go bigger, not smaller. I really doubt this is even being considered, but Bob has to keep'm wondering, I guess.

The thought is that the low hanging fruit sits more with smaller airports with less services and higher fare premiums.

Wide bodies are cool, but there's already about 10 YYZ-LHR flights a day and from what I've seen over the last few years, they're not making a lot of money like the old days where the overseas flights subsidized the domestic business. Now it's the opposite.

Plus, the strategy is to use interline and code sharing feed for overseas traffic (Atlantic and Pacific). This leaves the smaller domestic stations fairly logical as a next step.

My guess is that Brett Godfrey from Virgin Blue who sits on the WJ BOD will have some insight and influence on the smaller aircraft strategy. If I recall, Virgin Blue have done some progressive things with pilot comp on the smaller Embraer fleet??

[roger.roger]

the problem is if WS leaves the all boeing fleet they loose the 10 787 options which means they loose the South american flying that they have planned. Whats going to make them more money?

[Realitychex]

the problem is if WS leaves the all boeing fleet they loose the 10 787 options which means they loose the South american flying that they have planned. Whats going to make them more money?

If a second fleet type is in the cards, and that's an "if", I'd focus on a "strangle the feed" strategy before embarking on piecemeal long haul international strategy.

A fleet of Q400's would do the trick, with most of them based in YYZ/YTZ.

Out of YTZ, offer YUL and YOW with jet connections further east. Westbound, offer YQT, YSB and YAM a couple times daily with west bound service to YWG to connect to the YWG west network. Add in a few flights a day to key US destinations. Just enough to keep fares low so no one is being ripped off at YTZ.

Then watch and wait.

[tonysoprano]

reality check.

[RB-211]

Denial is a powerful, if not entertaining thing.

[tonysoprano]

long time no troll asshole. where ya been? shopping for kneehigh socks?

[mbav8r]

What seemed to be implied in the article, was a CPA with another carrier. Would that affect the 787 options? I doubt it, as it would be a seperate airline therefore fleet wouldn't matter. That to me seems to add credence to a potential CPA if it is infact true about the 787 option loss.

the problem is if WS leaves the all boeing fleet they loose the 10 787 options which means they loose the South american flying that they have planned. Whats going to make them more money?

[tonysoprano]

when are the 787's being delivered?

[roger.roger]

not sure when the first 787 is going to start flight testing let alone they being delivered. But if your sure that WS ain't getting them would you care to put your money where your mouth is and bet a J class ticket anywhere in the world. lets say WS will have them in the next 5 years?

[tonysoprano]

Let's make it 10.