Canada's WestJet Airlines to fly wide-body aircraft

Mon Jul 7, 2014 3:34pm EDT
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By Susan Taylor

TORONTO (Reuters) - WestJet Airlines Ltd (WJA.TO: Quote), Canada's No. 2 carrier, said on Monday it planned to fly its own wide-body planes as early as the autumn of 2015 and was in advanced stages of sourcing the long-haul aircraft, a move that may heat up competition with larger rival Air Canada ACb.TO.

WestJet, which launched its first trans-Atlantic service to Ireland this summer with its existing fleet of narrow-body planes, said international expansion was the natural next step in its evolution.

Attempting to boost revenue and push beyond its no-frill origins, WestJet has for several years toyed with the idea of expanding into the long-haul market with a new fleet, but focused first on domestic growth.

The Calgary, Alberta-based airline did not say how many wide-body planes it plans to buy or lease over the long term, but it will initially operate four of the aircraft.

The first planes will service routes between Alberta and Hawaii in late 2015, following expiry of a contract with Thomas Cook, which provides two Boeing 757s.

While WestJet's plan promises growth, it also carries risk, analysts said.

"They are also moving away from the simplified operations that made them so successful over the past decade," RBC Capital Markets analyst Walter Spracklin said in a note. "Accordingly, maintaining a cost advantage, as well as successfully executing, will be tantamount."

AltaCorp Capital Research analyst Chris Murray said the shift "brings a lot more risk to the overall operation of the airline" but he expects a cautious roll-out.   Continued...

President and Chief Executive Officer of Westjet Airlines Gregg Saretsky addresses shareholders during the company's annual general meeting in Calgary, Alberta, May 7, 2013.  REUTERS/Todd Korol