HASH(0xbeb53c)

WestJet orders longer-range Boeings as part of wider expansion plans

WestJet orders longer-range Boeings

CALGARY — WestJet Airlines Ltd. (TSX:WJA) has set out an ambitious plan that will see it expand both internationally and into ultra-low cost offerings.

The company said Tuesday it has placed a firm order for 10 Boeing Dreamliners, which will allow it to serve new destinations in Asia, South America and Europe with higher-end offerings like lie-flat seating.

Company chief executive Gregg Saretsky said the company is also moving ahead with a plan to launch a separate brand and operation with 10 planes to offer a lower-cost service than WestJet itself.

“We’ll have three very distinct products that will address those three segments, from thrift to luxury, and all within an appropriate cost structure to match,” said Saretsky.

WestJet won’t see its first Dreamliner 787s delivered until 2019, with the option of buying another 10 between 2020 and 2024.

The ultra-low cost carrier, or ULCC, should be in operation by early next year with a no-frills structure modelled from the likes of European carriers Ryanair and easyJet.

“The focus on the ULCC is to have the absolutely, rock-bottom entry fare, and then you pay as you consume for all the other products and services,” Saretsky said.

Saretsky said the new carrier’s costs would be about 6.5 cents per available seat mile, compared with 10 cents for its WestJet operations, as it does away with free extras like snacks and baggage and squeezes more travellers into the planes.

The new offering would focus on leisure travel routes not served by WestJet to avoid cannibalizing its own business, with Saretsky saying one of the target markets is the 5.5 million flights Canadians take from airports just across the U.S. border.

The company is also pushing to lower costs across its operations, with plans to add another row of seats to its to its existing 737-700s and 800s, and to shift more customer service online and away from call centres.

WestJet’s expansion plans come as the company faces another pilot union drive, with voting set to begin on whether to join the Air Line Pilots Association.

The plans also come as the company emerges from a tough quarter after a record number of weather interruptions, pushing first quarter net earnings down to $48.3 million or 41 cents per share from $87.6 million or 71 cents per share last year

WestJet shares have fallen to their lowest levels in nearly a month. They were at $22.00 at midday, down 84 cents.

 

Follow @ibickis on Twitter.

Ian Bickis, The Canadian Press

Just Posted

Police seek witnesses to fatal weekend accident

Wayne Kernachan was struck by a vehicle while responding to an accident

Pedestrian killed on Highway 22 Saturday evening

Police say 51-year-old man died after being hit by car

UPDATE: DriveBC says highway re-opened after accident

Highway 22 closed for seven hours on Saturday

Forestry workers set to begin job action in Kootenays

Operations in Castlegar, Cranbrook, Galloway, Elko, Radium, Golden may see job action this week.

Métis Flag flies in Trail on Louis Riel Day

Area students, officials and public attend flag raising at Trail City Hall

Six students arrested, charged in sex assault probe at Toronto all-boys school

The school’s principal, Greg Reeves, described the video of the alleged sexual assault as ‘horrific’

Laine scores 3 as Jets double Canucks 6-3

Injury-riddled Vancouver side drops sixth in a row

Deportation averted for Putin critic who feared return to Russia

Elena Musikhina, a vocal critic of the Kremlin, has been granted a two-year visitor’s permit in Canada

B.C. to allow Uber-style ride hailing services to operate in late 2019

Fee will be applied to fund options for disabled people

Auditor general takes aim at Liberals’ fighter-jet plan

Suditor general Michael Ferguson is about to release a new report on Canada’s attempts to buy new fighter jets

B.C. couple converts ambulance into a traveling home

The Revelstoke couple plan on touring B.C. ski hills then driving to Mexico

Cyclist defecates, throws own poop at car following B.C. crash

Man defecates in the street before throwing it at a driver locked in her vehicle

Jamie Koe, other curlers kicked out of bonspiel for being too drunk

‘You don’t kick around other players’ bags, it’s disrespectful and we expect better of our players’

Homicide victim found under B.C. bridge identified as Hells Angels member

Chad John Wilson was one of four men arrested in Spain in 2013 on allegations of smuggling cocaine.

Most Read