WestJet short-haul fares to beat Air Canada

Tue Jul 10, 2012 4:09pm EDT
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By Nicole Mordant

(Reuters) - WestJet Airlines Ltd's planned Canadian short-haul carrier will likely charge about a third less than its main rival Air Canada for last-minute travel, WestJet's chief executive said on Tuesday.

In what some analysts have called its boldest move since its launch 16 years ago, WestJet, Canada's second-biggest airline, announced in February that it will start a new regional operation to fly to smaller Canadian cities and towns.

Some of them are only served by Air Canada, resulting in high air fares even for short distances. WestJet, whose cost structure is about a third lower than Air Canada's, sees this as an opportunity to exploit.

"Our last minute, walk-up fares are 30 percent lower than Air Canada's. I would expect that at minimum that fares in the regional space would have a similar relativity," WestJet CEO Gregg Saretsky said in an interview.

"At the bottom end, Air Canada does have fare sales from time to time. I expect that we would be competitive with, at the low end, what exists today," he said by telephone from WestJet's head office in Calgary, Alberta.

WestJet has said it plans to launch the yet-to-be-named airline in the back end of 2013. In May it said it had chosen Montreal-based Bombardier Inc to supply up to 45 turboprop aircraft for the new carrier at a cost of about C$1 billion ($979.58 million). But further details have been few and far between.

Saretsky said that representatives of airports and councils from 32 communities, including Peterborough in Ontario, Nanaimo on Vancouver Island, and Gander in Newfoundland and Labrador, recently came to Calgary to pitch to WestJet why the airline should serve them.

Only a handful of the presentations were "real long shots," Saretsky said, adding that the final number of destinations would be "at the higher end rather than the lower end" of the 32.   Continued...