CEO says WestJet 'bullish' on widebody strategy

WestJet remains “bullish” on its recently launched strategy of flying big widebody jets, the CEO of the Canadian low-cost carrier said Tuesday.

Gregg Saretsky acknowledged during the company’s quarterly earnings call that WestJet’s new widebody strategy – launched just last year – is being closely watched. He declined to offer specifics on what WestJet has in mind going forward, but The Calgary Herald writes Saretsky “hinted that an investor day in May could be an opportunity to unveil” more details on the company’s widebody ambitions.

WestJet began flying in 1996, mimicking the single-aircraft strategy that U.S. low-cost carrier Southwest used to great success on this side of the border. WestJet remained a domestic carrier until 2004, when a number of U.S. destinations joined its network. Flights to the Bahamas began in 2006, with further expansion in Mexico, Central America and the Caribbean to follow.

Still, WestJet’s footprint remained within North America. That changed in 2013 when the carrier added its first destination in Europe, launching seasonal Boeing 737 service between St. John’s, Newfoundland, to Dublin, Ireland. WestJet also added turboprops to its network in 2013, but otherwise remained an all-Boeing 737 carrier.

Then in 2015, WestJet announced plans to add four Boeing 767s to its fleet, bringing in widebody jets that are more typical on overseas routes. The longer range of the 767 also allowed WestJet to consider Europe or Hawaii service from interior Canadian destinations that would be too far for the 737.

With its new 767s, WestJet launched six seasonal new routes to London's Gatwick Airport. Today, the airline’s 767s are flying two routes to London Gatwick, two routes to Hawaii, and on some of its domestic transcontinental routes, according to the Herald.

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The Herald adds background, writing those first “London-Gatwick flights, which launched last spring, were billed by WestJet as a way of testing the waters to see if further long-haul expansion was feasible. Though the route struggled in the early days due to issues with aircraft maintenance and reliability, WestJet says those problems have been fixed and it considers the route a success.”

Now, WestJet is thought to be considering fitting its fleet with new widebodies – likely either the Airbus A330 or the Boeing 787 “Dreamliner.”

“We are currently analyzing all options as to the make, model and number of aircraft and the pace of expansion,” Saretsky is quoted by the Herald as saying during the earnings call.

But while Saretsky may be “bullish” on pushing ahead with a widebody plan, at least one analyst questioned the move.

“I struggle to see where the value creation is in this strategy,” Chris Murray of AltaCorp Capital said to the Herald.

The widebody comments came as WestJet reported its quarterly and full-year earnings. The company reported a net profit of CDN $55.2 million (47 cents per share), down from CDN $63.4-million, or 51 cents per share, a year earlier, according to The Globe and Mail of Toronto. The earnings bested analysts’ expectations.

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