Archive for the 'WestJet' Category

WestJet Wins Bundle of LaGuardia Slots

Published
by
Dan Webb
on November 23, 2011
in WestJet
. 2 Comments

WestJet announced earlier today that it was one of the winners of the recently-concluded slot swap auction, and successfully bid for a bundle of eight slot pairs at New York-LaGuarida. Calling the situation “a once-in-a-lifetime opportunity,” WestJet President and CEO Gregg Saretsky said, “our growth plans, in which increased business travel in the East figures prominently, includes New York City, Canada’s largest international business market.”

The airline’s bid marks the second time it has attempted to take advantage of the Delta-US Airways slot swap. Last year, WestJet was one of a few airlines that would receive slots at LaGuardia as part of a proposed compromise by Delta and US Airways to address competitive concerns about the deal that were raised by the government. That compromise ended up falling through.

WestJet’s win of the slot bundle also means that the airline will be able to return to LaGuardia after leaving over six years ago. In September 2004 the airline launched service between Toronto and LaGuarida, but ended the service less than a year later “due in large part to its inability to
obtain additional and better timed slots,” the carrier explained earlier this year in a DOT filing. At that time, WestJet only had two slot pairs at LaGuardia.

WestJet’s new LaGuardia service will dramatically expand its presence in New York, as its only route in the market is seasonal service between Calgary and Newark. WestJet said “details on schedule information will be announced at a later date” today, though earlier this year the Calgary-based airline noted in the aforementioned DOT filing that it would use LaGuardia slots “to introduce new competitive service into the Toronto-New York market.”

The airline’s successful bid for the slot bundle is quite interesting, especially when one reviews the rest of that WestJet filing from earlier this year, in which the carrier commented on the slot swap. At the time, WestJet didn’t seem all that excited about a bundle of eight slots (emphasis mine):

…the current proposal to (1) require bidders to bid on a minimum of eight slot pairs and (2) prohibit successful bidders from selling or leasing excess slots to other carriers during the twelve months following purchase would make it difficult if not impossible for many proven competitors, including WestJet, to participate in the bidding process.

The airline continued:

…if WestJet were required to obtain eight slot pairs and if it used all of those slots for Toronto-LGA service using its existing B737 equipment, that new service would increase market capacity by 62 percent. Although WestJet is confident that its new service will stimulate market demand, an immediate 62 percent increase in market capacity would not be sustainable.

The proposed divestiture of two bundles of eight slot pairs each most likely will result in increased competition in two city pair markets. By contrast, creating two bundles of five slot pairs and one bundle of six would ensure increased competition in at least three city pairs and maximize competition benefits. Decreasing the size of the slot bundle could also increase the participation of smaller low cost carriers such as WestJet. Alternatively, the proposed prohibition on successful bidders selling or leasing slots to other carriers should be modified to allow carriers such as WestJet to mitigate the costs of acquiring excess slots that they are unable to use immediately.

The FAA did not appear convinced, however, saying last month that “a restructured remedy consisting of smaller bundles of slots to more carriers, as proposed by Spirit, JetBlue, Allegiant, WestJet and Virgin America could make certain new entrants highly vulnerable to such scheduling changes and frustrate the competitive responsiveness we are seeking.”

Anyway — that was a very long-winded way of me wondering how WestJet will use its LaGuardia slots.

Brief programming note: Unless any really exciting news pops up over the next couple of days, this is it for me posting-wise this week. Happy Thanksgiving to everyone here in the US!

WestJet Partners with…American?!

Published
by
Dan Webb
on October 21, 2010
in American and WestJet
. 5 Comments

I think it’s safe to say that most people were at least a bit surprised when it was announced earlier this week that American and WestJet would be partnering up. Earlier this year WestJet and Southwest parted ways, and media reports suggested that WestJet’s partner here in the States would be Delta.

But, anyway, interline itineraries can be booked through American beginning on November 9th, and connections between the two airlines will take place at the six Canadian cities with American service – Calgary, Montreal, Toronto, Ottawa, and Halifax.

What’s interesting is that this initial phase of the partnership seems very focused on American’s passengers. A press release sent out by both airlines says the agreement “provides American’s customers seamless connecting service to 25 new Canadian cities not currently served by American or American Eagle,” but doesn’t mention the benefits for WestJet.

The airlines note that they “expect to implement a second phase of their interline relationship in December that will add additional connecting opportunities through WestJet’s nonstop U.S. flights to Canadian cities” and that they are “exploring other ways to enhance customer benefits through other commercial cooperation agreements.”

So we’ll see how this develops – will it eventually turn into a codeshare partnership? And will we see WestJet adjust its route network to adjust connectivity at all? Right now the airline only has service to two of American’s focus cities – Miami (from Toronto) and Los Angeles (from Vancouver, Calgary, and Edmonton).

And where do Delta and Southwest fit into this? Are they still seeking a Canadian partner? If so, the only option left on the table would be a partnership with Porter. (That assumes, of course, that WestJet would like to stick with one US partner.)

(Edited at 10:12 pm to clear up some confusion about the United States cities WestJet served.)

A Slightly Puzzling News Release from WestJet

Published
by
Dan Webb
on April 29, 2010
in Delta and WestJet
. 1 Comment

The future alliance plans of WestJet have been a big issue ever since the Canadian carrier’s new CEO, Gregg Saretsky, said in an interview that the company was interested in pursuing a partnership with Delta. In the following weeks, Southwest and WestJet had announced that their plans to form an alliance were scrapped. Then, during Delta’s earnings call CEO Richard Anderson said that Delta has “reached an alliance agreeement with WestJet.”

Then, earlier this week WestJet issued this short news release:

WestJet clarified comments made by Delta Air Lines in Delta’s first quarter conference call that an alliance agreement between Delta and WestJet had been reached. WestJet has not signed an alliance agreement with Delta, but a commercial relationship could occur in the future. The only recently signed agreement between Delta Air Lines and WestJet provided WestJet with the option to acquire slots at LaGuardia Airport in New York City; this agreement is still subject to U.S. regulatory approval.

Interesting. What was the motivation behind this? On one hand, WestJet might want to clarify things for investors on the current state of partnerships. Plus, the DOT has said that it doesn’t want LaGuardia slots going to codeshare partners, so that could be a factor. Or maybe Delta just jumped the gun on announcing this?

Updated at 10:17 AM, because I forgot to proofread. Oops.

Southwest and WestJet Call It Quits

Published
by
Dan Webb
on April 19, 2010
in Southwest and WestJet
. 0 Comments

Hello, and welcome back to another exciting edition of “Airline Soap Opera Theater”! Where we last left off, low cost carriers Southwest and WestJet were preparing to consummate their cross-border relationship, but it kept getting delayed when Southwest’s work on the IT side of things took longer than expected. And then, WestJet’s new CEO said in an interview that they were interested in a partnership with Delta.

Not surprisingly, on Friday Southwest announced that it would be ending its partnership with WestJet – before the two carriers even started exchanging passengers.  Southwest says that WestJet requested “a number of changes” in the agreement, and has decided that having each airline go its own was a better idea. While we won’t know for sure, my guess is that Southwest wanted to be WestJet’s sole American partner, and WestJet started to not like that idea.

Of course, in my book, it’s not the news that is the most interesting, but what each airline will go on to do.

First, let’s look at WestJet. If a partnership with Delta actually develops that makes them even closer to SkyTeam (a partnership with AF-KLM already exists). It’d be interesting to see if they end up joining the alliance, as that’d be a first for an LCC. But it would make sense for SkyTeam – with Air Canada already tied up in Star WestJet is really the only other viable option to play ball in Canada.

Another interesting aspect of a Delta-WestJet partnership is the slot swap, an item that Southwest recently brought up in a filing regarding the compromise suggested by US Airways and Delta. Under the FAA’s proposed ruling, the airlines shouldn’t give up slots to codeshare partners. So, if Delta and WestJet were to codeshare, would that put WestJet’s possible YYZ-LGA flights in further jeopardy? I think we might have to wait on the DOT for that one.

And what about Southwest? The company’s EVP of Strategy and Planning, Bob Jordan, remarked that “we remain interested in exploring the possibility of one day offering service to Canada if it makes sense for Southwest and for our Customers. That would not rule out future codeshare relationships with Canadian carriers, or flying north of the border ourselves.”

It would certainly be interesting if Southwest were to go it alone here, but I’m not sure how interested they would be – I don’t think that any potential Canadian stations could really generate the frequency that they usually like to have. Plus, when the WestJet deal was first announced Southwest was very clear that they didn’t want their own metal touching Canadian soil – WestJet would take care of all the operations. That being said, maybe Southwest learned a thing or two about the Canadian market as it got the codeshare ready.

And what about Canadian partners? The only airline really left here is Porter. It would only take care of the Eastern half of Canada but it would be at least something. And it would make sense, I think. Porter’s range is limited thanks to the very short runway at its Toronto base – and a codeshare with Southwest could really open some opportunities to the West. Porter already flies to Midway and from my experience it is a pretty easy airport to have a connection – and it would become even easier once Billy Bishop Airport, Porter’s base, has pre-clearance facilities, it will become even easier.

As always – we’ll have to see.

Delta, WestJet, and Southwest – My Thoughts

Published
by
Dan Webb
on April 5, 2010
in Delta, Southwest and WestJet
. 0 Comments

Recently there was a very good article about WestJet’s incoming CEO Gregg Saretsky in the Financial Post. There was one particularly interesting nugget that started a whole bunch of speculation:

Fitting WestJet’s new ambition, Mr. Saretsky said it is now more likely it will first partner with U.S. legacy carrier Delta Air Lines rather than the expected deal with Southwest Airlines. While WestJet has often strived to be the Canadian version of Southwest, the U.S. low-cost carrier lacks a reservation system capable of code-sharing….”[Delta] has an interest. They have a capability. We like the Southwest partnership, but they’ve signalled to us that they’re not going to be ready,” Mr. Saretsky said. “We’re going to move on and tee things up with another partner.”

When originally announced, the deal was supposed to get going at the end of last year, but that date has since slipped. The reason most commonly cited appears to be Southwest working on its IT situation so it can handle international service.

On one hand, a Southwest partnership could still happen. Mr. Saretsky comes from Alaska Airlines, the king of making partnerships with a bunch of airlines. But it appears that Southwest isn’t all that excited about that idea. “A codeshare between WestJet and Delta…could be inconsistent with the agreement presently in place between Southwest and WestJet,” the airline said in a news release issued on Thursday.

So let’s say WestJet and Delta end up together, without Southwest. What does that mean? Well, Delta is planning to start a nice little hub at LaGuardia if the slot swap deal goes through. And part of Delta’s modified deal is giving WestJet five slots there. And one can assume that other Delta hubs and focus cities become strong possibilities for the Calgary-based WestJet. It also brings them closer to SkyTeam, considering the ariline’s existing partnership with Air France-KLM. WestJest is important for these airlines since Air Canada is already tied up with Star, so WestJest is the other other option for a Canadian partner that provides nationwide service.

But let’s talk Southwest. Its news release had a soundbite from Bob Jordan, EVP of Strategy and Planning:

“We have not yet been notified of WestJet’s intent to terminate that agreement. If we are so notified in order for WestJet to consummate its deal with Delta, Southwest remains very interested in offering our loyal Customers service to Canada via the most efficient means possible.”

What are the most efficient means possible? Southwest already has the authority to fly to Canada, something it needed for the WestJet partnership. The next-best option for a partner is Porter. Such an arrangement could work, with Porter’s existing Toronto-Chicago Midway service, which could use the additional feed, considering its 26% load factor in July, the latest month data is available. Porter could provide service throughout Eastern Canada, while Southwest could fly its own aircraft to destinations like Edmonton, Calgary, or Vancouver.

But could the end of the WestJet partnership, if that happens, be a blessing in disguise for Southwest? The deal did not seem to be all that popular among some employee groups, and codesharing was a key issue in the latest round of negotiations with SWAPA, its pilots union.

Anyway…those are my thoughts for now. We’ll see how it goes.

Photo Credit:

http://www.flickr.com/photos/husseinabdallah/ / CC BY 2.0

Delta and US Airways Adjust Slot Swap

Published
by
Dan Webb
on March 24, 2010
in AirTran, Delta, JetBlue, Spirit, US Airways and WestJet
. 3 Comments

Remember the slot swap? The one that many thought were dead when the DOT announced the concessions that it would require? Well, US Airways and Delta announced their own compromise earlier this week that’s very interesting. The airlines says that if this idea isn’t approved by the DOT, the deal’s off. So here’s the breakdown of the deal.

First, let’s take a look at Washington-National just because it’s the simpler one. DOT/FAA wanted US Airways to give up 14 of its 42 (33%!) of its new slots, a pretty hefty piece of the pie. US Airways has said that if the deal is approve, it will give JetBlue five slots at the airport. DOT wanted carriers that didn’t serve or had a small presence at DCA and LGA, and JetBlue fits the bill since DCA would be a brand new destination for them. JetBlue has said that they’re interested in the airport, though it’s kind of tough to guess where they’ll serve. For example, flights to their hubs in Boston and New York would make sense for connecting traffic, but there’s plenty of capacity in these markets already. And that pesky perimeter rule prevents service to the West Coast. Florida service could be likely as well.

Next up is LaGuardia, where Delta plans to sell up to five slots each to AirTran, Spirit, and WestJet. AirTran and Spirit are already there, but their share is small enough (less than 5% of slots) to satisfy the DOT’s guidelines. If the deal were to go through, this would be WestJet’s second attempt at LaGuardia service after cutting Toronto flights in 2005. Right now the airline is present in New York with a seasonal flight to Calgary from Newark, though that couldn’t be moved over due the perimeter rule. So Toronto and Montreal would be the big markets here, both of which already have Air Canada service. Porter goes to Newark, too.

So what will the DOT think of this one? I’m not so sure. For LaGuardia Delta comes close to what the DOT wanted by giving up 15 slots (DOT was throwing around the number 20), or 75% of what the DOT was suggesting. But US Airways is only offering up 35% of the DOT’s suggest divestiture.

But if this works out, it’s certainly good news for Delta and US Airways. By selling slots to specific carriers and only giving up to five total, they get to control the amount of competition present at the airports. And the limited amount of competition was something that was brought up by Southwest in Monday filing on the slot swap – and they were talking about the larger number of slots that was being suggested by the DOT.

Southwest and a few other carriers submitted comments to the DOT about the deal earlier this week, and tomorrow I’ll be covering those in more detail.

WestJet to Partner With Air France and KLM

Published
by
Dan Webb
on February 5, 2009
in Air France, KLM and WestJet
. 0 Comments

Yesterday, it was announced that WestJet will partner with Air France and KLM, which is something I did not expect to be honest. The airlines will begin constructing a codeshare later this year or early next year, but they will begin working on other aspects of a partnership before that happens (i.e. baggage interlining). The press release does not imply, however, that WestJet will be joining SkyTeam as part of the deal. It also mentions that “possibilities for future frequent flyer program cooperation will be explored as well.”

This makes excellent sense for Air France and KLM. Air Canada is already a member of Star Alliance, so now Air France and KLM can take advantage of Wesjet’s network to get into the Canadian market. Meanwhile, having a European partner is a fantastic opportunity for WestJet, and I wouldn’t be surprised if this new international partnership could bring over some business travelers from Air Canada.

Now, I think it’s also worthwhile to mention Southwest here – would they do something similar? Probably not. SkyTeam has no presence in the domestic Canadian market, unlike here in the States.

WestJet’s Strong Results

Published
by
Dan Webb
on September 5, 2008
in Air Canada and WestJet
. 0 Comments

The beginning of the month is a great time to look at data. Many of the airlines release their montly traffic results and he DOT releases its montly report on delays, baggage, and complaints.

Yesterday, both WestJet and Air Canada released their traffic reports for August, and both had strong results, as reported by Reuters. Air Canada reported an 85.4% load factor for mainline service in August, up one point from the same month last year. Jazz’s (Air Canada’s regional carrier) load factor went down 4.1 points from 77.3% to 73.2%. Systemwide load factor was up 0.6 points to 84.4%. WestJet’s load factor was good as well. Load factor was up by 0.4 points from 88.0% to 88.4%.

But there’s one important difference. In terms of ASMs, Air Canada cut mainline service by 2% and Jazz service by 4.1%, for a sytemwide 2.2%  decrease. WestJet, on the other hand, greatly increased capacity. Compared to August 2007, ASMs had increased by 21.9%!

For the year, WestJet’s load factor was down 0.6 points compared to the same period last year, but capacity has increased 20.3%. To increase capacity that much and have traffic grow with it that nicely in this environment is incredible, in my opinion.

We will have to see if WestJet can continue to grow, but right now it seems to be in the cards. From a recent article in Airline Business:

No order cancellations. No layoffs. In fact, says Durfy, “we plan no capacity cuts”. This sounds like the defiance of someone who is either oblivious or doesn’t care. WestJet’s capacity growth, measured in available seat miles, will be 16% this year, compared to 19% last year and a projected 8% next year. By 2010 it will be back up to 10-11%. “We plan an average annual growth of around 10%,” says Durfy. “The actual number each year depends on delivery dates.”

I look forward to watching WestJet’s moves in the future, and it will be interesting to see how their new partnership with Southwest will affect their traffic.

WestJet Wins in the Customer Service and PR Deparments

Published
by
Dan Webb
on August 12, 2008
in WestJet
. 0 Comments

I read an interesting post over at Today in the Sky yesterday. WestJet is leasing a couple Dash-8s from Hawkair (the lease includes crews) to maintain service at Prince George Airport in British Columbia during most September. There is some runway construction going on and the 737s won’t be able to deal with a shorter runway.

Now it’s not unheard of for an airline to hire another carrier to perform some service for them. For example, if memory serves JetBlue hired ExpressJet to fly a few E-145s for them when their E-190s needed software upgrades.

Today in the Sky also references a newspaper article, which quotes their public relations manager:

The idea of not servicing Prince George, stopping for a whole month, it just didn’t seem right to us.

Sounds kind of refreshing, doesn’t it?

The blog also linked to the official WestJet press release on the issue, and I found something interesting. WestJet refers to its customers as guests, not passengers. Maybe I just didn’t notice it before. But it does sound nice, doesn’t it?

I’m glad WestJet is continuing service. Even if it stopped the route for a month, the airport would still have service from other airlines. I’m sure its customers are appreciative. But WestJet also turned this situation into a good public relations situation and used it as a way to tout its good service. Nicely done.

It’s Official: Southwest and WestJet are Partners

Published
by
Dan Webb
on July 8, 2008
in Southwest and WestJet
. 0 Comments

The press release officially announcing the partnership I wrote about yesterday was released this morning. It’s certainly exciting to see this new codeshare develop. I’m also happy the press release mentions an integration of frequent flier programs.

Southwest Update

Published
by
Dan Webb
on July 7, 2008
in Southwest and WestJet
. 0 Comments

This evening a post appeared on PlaneBuzz about Southwest’s rumored partnership with WestJet, which I talked about earlier today. This is of interesting note:

We hear there is now some “scrambling” going on in certain quarters, and that we may have an “official announcement” of what Gary basically told everybody Sunday in the Chicago Tribune this week. Which, we hear, is just a tad bit earlier than had been planned.

I really hope this codeshare comes together, as I have a personal interest in it. This codeshare would make visiting my family in Edmonton much more convenient from my home airport.

Southwest’s second quarter conference call is scheduled for July 24th. I would expect an official announcement then if not sooner.