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WestJet plans to launch ULCC


Canada’s carrier WestJet announced its intention to launch a new, ultra-low-cost carrier (ULCC) in Canada subject to agreement with its pilots and any required regulatory approvals.

WestJet said that the service is expected to start in late 2017 with an initial fleet of 10 high-density Boeing 737-800s designed by the airline that first brought low-cost air travel to Canada in 1996. The ULCC will provide Canadians with no-frills, lower-cost travel options.

“We have built WestJet from its low-cost, regional roots into a renowned, international airline with service to 21 countries and today it’s all about disrupting at the price-sensitive end of the market,” said Clive Beddoe, co-founder of WestJet and Chair of the Board of the Directors. “Launching a ULCC will broaden WestJet’s growth opportunities and open new market segments by offering more choice to those Canadians looking for lower fares.”

Gregg Saretsky, WestJet President and CEO, added: “The complete unbundling of services and products in order to lower fares for the price-sensitive traveller has created the ULCC category and our new airline will provide Canadians a pro-competitive, cheap and cheerful flying experience from a company with a proven track record.”

WestJet’s plan for establishing the new ULCC has got a response from Canada Jetlines (Jetlines) which also plans to launch the ULCC and now is expecting to receive the AOC. Jim Scott, CEO of Canada Jetlines, said: “We believe that what Canadians need, however, is a genuine Ultra Low-Cost Carrier and greater competition. Today’s [WestJet] announcement offers nothing more than an ‘airline within an airline’ that will not increase competition into the market, and it remains to be seen whether it will be able to achieve the full benefits of a ULCC.”

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WestJet, an LCC based in Canada, reported that the Revenue passenger miles (RPMs), or traffic, increased 8.7% year-over-year, and capacity, measured in available seat miles (ASMs), grew 7.4% over the same period.
 

“Most ‘airlines within airlines’ that have attempted to offer low-cost options for air travelers have failed in North America, including Zip, Ted, Song, Metrojet, Calite, and United Shuttle. The continent is littered with the graves of these lower-cost airlines, precisely because the model doesn’t work when the airline is owned by another airline,” Scott added.

WestJet and its subsidiary WestJet Encore now fly to 100 destinations in 20 countries in North and Central America, the Caribbean and Europe, including 36 cities in Canada and 21 in the US. The company now operates a fleet of 119 Boeing aircraft and 33 Bombardier Q400s. 

According to Jetlines, it plans to operate flights throughout Canada and provide non-stop service from Canada to the United States, Mexico and the Caribbean, starting with six Boeing 737 aircraft in its first year of operations. 


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