Thursday, April 20, 2017

WestJet announces intent to launch ultra-low-cost carrier

In what probably can been seen as another strike at ultra low cost carrier newleaf, WestJet surprised many today with their announcement that they intend to launch a new ultra low cost airline!
WestJet today announced its intention to launch a new, ultra-low-cost carrier (ULCC) in Canada subject to agreement with its pilots and any required regulatory approvals. Service is expected to start in late 2017 with an initial fleet of 10 high-density Boeing 737-800s designed by the airline that first brought low-cost air travel to Canada in 1996. The ULCC will provide Canadians with no-frills, lower-cost travel options.
"We have built WestJet from its low-cost, regional roots into a renowned, international airline with service to 21 countries and today it's all about disrupting at the price-sensitive end of the market," said Clive Beddoe, co-founder of WestJet and Chair of the Board of the Directors. "Launching a ULCC will broaden WestJet's growth opportunities and open new market segments by offering more choice to those Canadians looking for lower fares."

"The worldview on low-cost airlines has changed since the launch of WestJet in 1996 and we are responding," commented Gregg Saretsky, WestJet President and CEO. "The complete unbundling of services and products in order to lower fares for the price-sensitive traveller has created the ULCC category and our new airline will provide Canadians a pro-competitive, cheap and cheerful flying experience from a company with a proven track record."
I really don't know what to say but if history in the Canadian airline marketplace is any indication then WestJet will have an uphill battle with this one. Remember Air Canada's Tango? Air Canada Zip? JetsGo? CanJet, Greyhound Air? They all were attempting something similar, although at the time it would have been only called low cost carriers (LCC) which WestJet was and still calls themselves but in reality they are now a full fledged regular airline.

There are still lots of questions to be answered and we'll get those when they release more details but are newleaf and Air Canada's Rouge really having that much of an impact on WestJet that they need to go this route? Are they being proactive about Jetlines? Do they want to lower labour costs (ie move certain flights/routes over to the new ULCC) Other questions will be can you earn and redeem WestJet dollars on the new ULCC (the smart move would be yes, but probably at a lower earn rate), will you be able to interline between the ULCC and WestJet (probably not as that adds costs) and many more!

Read the whole press release here.

What are all your thoughts on today's announcement from WestJet?

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