WestJet Airlines Ltd. said it may add long- haul destinations as far afield as Asia and North Africa if routes to the U.K. prove profitable, escalating the discount carrier’s challenge to Air Canada.
Just over a year after it began connecting the east coast of Canada with Ireland, WestJet is preparing to expand operations to London’s Gatwick airport. The new routes, due to start in May 2016, mark a “much bigger step” in the airline’s development of a low-cost long-haul network, chief executive Gregg Saretsky said in a telephone interview.
“Canada is nicely geographically situated to get — in 11 hours — to almost every business centre in the world; we can make Asia, we can make continental Europe, Latin America, North Africa. Clearly we haven’t disclosed what’s next, but all of those are possibilities,” Saretsky said. The airline is targeting pockets of “unmet need,” he said.
WestJet’s foray into Europe positions the Calgary-based discount carrier to go head-to-head with Air Canada on long-haul routes. The airline is still refining its model for longer distances, though the traditional low-cost premise of starting with a minimal base fare and allowing customers to add on ancillary services like checked-baggage and food is a logical starting point, Saretsky said.
“It’s not as simple as squishing in as many people as possible,” the executive said. “We are exploring in the long-haul market, because we’re going where not many others have gone before.”
WestJet began flights to Dublin from St. John’s, N.L., using a Boeing Co. 737 in June 2014. It has has leased four 767-300 ER from Boeing Capital to launch routes from Gatwick to Vancouver, Calgary, Edmonton, Winnipeg, Toronto and St. John’s. The airline plans to buy the jets and is “in the market for more 767s,” Saretsky said. It’s speaking to both Boeing and Airbus about what model might eventually replace the 767, he said.
“WestJet is embarking on a growth path that we believe can deliver significant value creation over the next several years,” Fadi Chamoun, an analyst at BMO Capital Markets wrote in a note to clients.
The Canadian airline is not the only carrier seeking to pursue discount operations on trans-Atlantic routes. Scandinavian low-cost operator Norwegian Air Shuttle began flying 787 Dreamliners in 2013, added London-U.S. connections a year later and most recently said it would use new 737 Max jets to link the East Coast of the U.S. with Ireland.
Meanwhile, Europe’s biggest discount carrier, Ryanair Holdings Plc, has reiterated it isn’t interested in long-haul operations, though founder Michael O’Leary has said it’s something that could work under a totally different brand and with the right aircraft.
“We welcome competition,” Saretsky said of Norwegian and Ryanair. “WestJet has a long history of competing successfully against other carriers and we have always vigorously defended our position. We will do the same in this space, as we have in other markets.”