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WestJet eyes new routes, seat plans

By: Scott Deveau

Posted: 05/2/2012 1:00 AM | Comments: 0

TORONTO -- WestJet Airlines Ltd., which has long prided itself on its uniform fleet and one-class configuration, is getting closer to expanding options for passengers.

The Calgary-based carrier announced Tuesday it would purchase a fleet of Bombardier Q400s for its new short-haul carrier and is expected to make a decision in the coming months on a new seat configuration for its larger 737-800s, including the possibility of roomier premium seats and a higher-density economy class.

The company earlier this year announced plans to launch a short-haul carrier but had yet to determine whether it would chose Bombardier Q400s or another European-built turboprop, the ATR 72-600. It said Tuesday it had picked Bombardier.

"(They) are both great aircraft. However, at the end of the day, the combination of range, speed, and seat density of the Q400 made it the best choice for us given the extended distances between our hubs and the smaller communities we will be serving," said Gregg Saretsky, WestJet chief executive, on a conference call.

WestJet has signed a letter of intent for 20 Q400s, with another 25 on option. The order, which is expected to be firmed up shortly, has a value of roughly $600 million based on list price, but could grow to $1.35 billion if all the options are exercised. Both Air Canada's regional carrier, Chorus Aviation, and Porter Airlines use the fuel-efficient Bombardier aircraft in their fleets.

The decision is a boost for Bombardier after a lacklustre 2011 for regional aircraft orders. The Montreal manufacturer has won two high-profile turboprop contracts away from its European rival in 2012, and has a Q400 backlog of two years' work, said Benoit Poirier, Desjardins Securities analyst. It aims for a 18- to 21-month backlog, he said.

WestJet expects to have its regional carrier schedule set by the end of 2012 allowing it to expand into markets it is unable to serve competitively with its 737s.

Communities such as Penticton, B.C., and Brandon, are launching public campaigns to win the new service, Saretsky said.

WestJet also reported a record first-quarter net income Tuesday of $68.3 million, or 49 cents a share, up 42 per cent from the $48.2 million, or 34 cents a share, it earned for the same period last year.

Analysts had been expecting earnings of 38 cents a share, according to Bloomberg estimates.

Saretsky said it was difficult to gauge how much WestJet was helped during the quarter by the labour troubles at Air Canada. But he expected the unrest to be short-lived.

"We're operating under an assumption that they'll sort it out," he said, adding WestJet was focused on improving both its profitability and its passenger experience.

To that end, WestJet is exploring options for its in-flight entertainment, including a trial starting in June in which it will rent pre-loaded Samsung tablets on its new planes.

-- Postmedia News

Republished from the Winnipeg Free Press print edition May 2, 2012 B3

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