* Gregg Saretsky a 25-year industry veteran
* Has experience in areas that WestJet focusing on
* Analysts divided on whether Durfy jumped or was pushed
* WestJet shares drop as much as 4 pct
By Nicole Mordant
VANCOUVER, March 16 (Reuters) - The resignation of WestJet Airlines Ltd's (WJA.TO) chief executive caught investors off guard, knocking the carrier's shares lower on Tuesday, but his replacement by an industry veteran may be just what the former market darling needs, analysts said.
Canada's No.2 airline, which has seen its earnings fall for the past six quarters and in recent months wrestled with a new reservations system, said late on Monday that Sean Durfy will step down as CEO on April 1 for unspecified personal reasons.
Durfy will be replaced by Gregg Saretsky, a 25-year veteran of the Canadian and U.S. airline industry. He joined WestJet just nine months ago but has made a swift ascent through the ranks to head up the carrier's operations.
"I feel very confident in the direction that WestJet is going," said Robert Kokonis, managing director of Air Trav Inc, an airline consulting company.
"I think it's a good move putting somebody at the helm that has strong capability from the airline sector directly and has a good track record," Kokonis said.
Saretsky, 50, started his career at now-defunct Canadian Airlines in 1985, leaving in 1998 to join Seattle-based Alaska Airlines Inc [ALKAIR.UL].
At Alaska he established airline alliances, developed a network of partners with other U.S. airlines, and helped to establish a rewards program, key initiatives that WestJet is busily working on itself.
"He is a very capable individual ... WestJet made room for him when he was available so that they wouldn't lose out on that talent," said independent airline analyst Rick Erickson.
Saretsky joined the carrier in June 2009 as vice-president of WestJet Vacations but was soon promoted to vice-president of airline operations in October.
WestJet's stock fell as much as 4 percent on the Toronto Stock Exchange as investors were surprised by Durfy's sudden departure after just 2-1/2 years at the helm. By early afternoon the stock was off its lows at C$13.46, for a loss of 41 Canadian cents, or 3 percent.
Analysts were divided on whether Durfy, who was handpicked by founder Clive Beddoe in 2007 to lead WestJet, despite limited airline experience, was pushed or jumped. WestJet declined to elaborate on Durfy's reasons for leaving.
Supporters of Durfy said he would not have agreed to stay on at WestJet until September to help the transition to a new CEO if he was being booted out.
They also pointed to WestJet's continued profitability through the recession in what has been called the worst downturn in airline history. WestJet has continued to win market share from its bigger rival, Air Canada ACa.TO.
But detractors point to WestJet's troubles with its new Sabre bookings system, which helped to drag profit down by more than 50 percent in the most recent quarter and resulted in the company having to delay a long-waited loyalty program.
A planned partnership with Dallas-based Southwest Airlines Co (LUV.N), which would have helped WestJet expand in the United States, was also put on hold last May.
"In our opinion, Durfy did some valuable things for WestJet during his tenure at the company. Nevertheless, we believe that, given the circumstances, change was necessary," Raymond James analyst Ben Cherniavsky said in a note to clients.
WestJet's trajectory in the airline industry is well known -- founded on the Southwest Airlines no-frills model in 1996 with three aging Boeing 737s flying to five Western Canadian destinations.
The company now flies 88 aircraft to 69 cities in North America and the Caribbean.
$1=$1.015 Canadian Editing by Rob Wilson