WestJet Ponders Setting Up New Regional Airline
WestJet Airlines is circling Hamilton airport again as officials desperately try to get the Canadian success story to land here.
The Calgary-based airline announced Monday it is thinking about setting up a regional airline to complement its existing service and to compete head-to-head with Air Canada.
Industry analysts say the idea would be a real benefit for travellers, and Hamilton would be a good location for the service.
All that's needed is for managers of John C. Munro Hamilton International Airport to sell WestJet on that idea - an effort that's already under way, said airport president Richard Koroscil.
"We are always talking with WestJet and meeting with them," Koroscil said Monday as the airline industry buzzed with the news. "We think this idea creates a real opportunity for us."
In a news release Monday, WestJet said it is considering the launch of a new short-haul, regional airline as early as 2013 using a fleet of approximately 40 smaller turboprop aircraft.
"This is an exciting consideration for WestJetters," said Gregg Saretsky, WestJet president and CEO. "We are meeting with WestJetters throughout January to get their input on this watershed decision. One of the cornerstones of our success is engaging with employees early on in key decisions and I am confident they will see the strategic value of this initiative. Once our employees have had the opportunity to share their input, we will be in a better position to make a sound decision rooted in employee feedback and engagement."
Saretsky said WestJet has "regularly evaluated this strategy" and the company believes its established brand, strong balance sheet and low cost structure give it a good shot at making such a service fly.
"This would be the natural evolution of our airline," Saretsky added. "We have built a powerful brand that has been embraced by the travelling public from the start. Our goal now is to provide more Canadians with more access to lower fares and our friendly and caring guest experience."
Unlike many airlines that have several different types of aircraft in their fleets, WestJet operates only a fleet of 97 Boeing 737 aircraft. While that gives the company the advantage of lower maintenance and training costs, their seating capacity of up to 166 passengers restricts the frequency of flights on some routes. At the same time they are too small to fly overseas.
A smaller 70-seat turboprop aircraft such as the Bombardier Q400 would allow more frequent flights on routes such as Hamilton to Montreal or Ottawa - a critical factor in drawing business travellers.
"Putting lots of seats into routes with limited frequency won't draw business travellers," Koroscil said. "The 737 is a big aircraft for the Ottawa or Montreal route. Routes like that like frequency."
In addition to Ottawa and Montreal, Koroscil said a regional airline could link Hamilton to cities such as Boston, Chicago, New York and Canadian destinations such as Thunder Bay, Timmins, Windsor and others.
WestJet was coy on specifics of the plan. In the company's news release WestJet founder and chairperson Clive Beddoe said the current fleet would be joined by a "sister company" operating a single fleet of turboprop aircraft that would allow both companies to maintain maximum efficiency.
In an email exchange, WestJet's Robert Palmer said the company will meet with employees - most are also shareholders - across the country through January to discuss the plan and get their support. Employee-shareholders will then vote on the plan. Palmer said until that process is completed sometime in February the company would not provide updates on the plan.
"Given our strong corporate culture and excellent relationship with WestJetters, we believe this is an important part of the process," he said.
Industry analyst Robert Kokonis, president of AirTrav Inc., said a WestJet regional carrier would bring a new level of competition to the already ultracompetitive airline industry that would benefit travellers.
"It's going to represent extra competition in many communities across the country where Air Canada's the only game in town," he said. "So this does represent a material and significant new level of competition to many communities - communities where, perhaps, they would love to have the WestJet brand in place."
Kokonis specifically cited Hamilton as a market where WestJet could build up a formidable presence.
WestJet is no stranger to Hamilton airport. Until 2004 it moved 1 million passengers a year through the Mount Hope air field when Hamilton was its eastern hub. Since then. However, the story has been one of repeated service cuts after WestJet moved its eastern base to Toronto's Pearson airport.
Today, WestJet operates a single daily flight from Hamilton to its western hub in Calgary.
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With files from The Canadian Press
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