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Air Canada too dominant in the East for WestJet to compete, experts say

WestJet will pivot resources to increase service in Western Canada
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A WestJet flight from Calgary arrives at Halifax Stanfield International Airport in Enfield, N.S. on Monday, July 6, 2020. Industry watchers expect WestJet to remove routes from the Toronto-Montreal-Ottawa triangle as part of the Calgary-based airline91裸聊视频檚 new strategy to focus future growth on Western Canada. THE CANADIAN PRESS/Andrew Vaughan

Industry watchers expect WestJet to remove routes from the Toronto-Montreal-Ottawa triangle as part of the airline91裸聊视频檚 new strategy to focus future growth on Western Canada.

But far from being a downsizing, experts say WestJet91裸聊视频檚 latest move is actually a 91裸聊视频済rowth story91裸聊视频 that will see the Calgary-based airline bulk up its fleet and add service to more communities across the West.

On Thursday, the WestJet Group 91裸聊视频 which is owned by Onex Corp. 91裸聊视频 announced a plan to shift its resources in the wake of a strategic review of the company91裸聊视频檚 operations.

Chief executive Alexis von Hoensbroech, a former Austrian Airlines CEO who assumed the helm at WestJet in February, said the airline is at a turning point as it grapples with pent-up travel demand in the wake of the COVID-19 pandemic, inflation, spiking oil prices and staffing shortages at airports.

Von Hoensbroech said to ensure its future success, WestJet has decided to focus its future investments on Western Canada, where it has a large portion of the market share and enjoys a reputation as the 91裸聊视频渉ome-team carrier.91裸聊视频

91裸聊视频淲e will deploy our aircraft where they can be of greatest service to Canadians,91裸聊视频 von Hoensbroech said in a release. 91裸聊视频淲hile we will be investing the majority of our fleet in the West, as a national airline we will maintain a significant presence in the Eastern provinces, primarily through direct connections to our Western cities.91裸聊视频

The announcement comes after WestJet has spent more than a decade adding routes to central and Atlantic Canada in an effort to go head-to-head with Montreal-based Air Canada.

WestJet also went from a single-ticket class, budget airline to one that offers business travel options and 91裸聊视频減remium economy91裸聊视频 fares as well as long-haul, trans-Atlantic service with its fleet of Boeing 787 Dreamliners.

But in an interview, Calgary-based independent aviation analyst Rick Erickson said trying to compete with Air Canada by emulating it may have proved too challenging.

91裸聊视频淚 think what they91裸聊视频檝e bumped up against is, Air Canada is a juggernaut. There91裸聊视频檚 no ifs, ands or buts about it,91裸聊视频 Erickson said.

Air Canada has a 91裸聊视频渧ice-like grip91裸聊视频 on Eastern Canada, Erickson said, adding he expects to see WestJet 91裸聊视频渢runcate91裸聊视频 the number of routes it offers out of Toronto, Montreal and Ottawa, while bulking up its offerings out of cities such as Calgary, Vancouver and Winnipeg.

91裸聊视频淭hey91裸聊视频檝e taken a very pragmatic approach, and they91裸聊视频檝e said 91裸聊视频榣ook, let91裸聊视频檚 go back to our roots, let91裸聊视频檚 go back to what our strengths are,91裸聊视频 91裸聊视频 he said. 91裸聊视频淚 think they91裸聊视频檙e going to attempt to build a fortress in the West.91裸聊视频

WestJet is not going to be pulling out of eastern Canada, simply adopting a philosophy of 91裸聊视频渨in where you can win,91裸聊视频 said Robert Kokonis, president and managing partner of Toronto-based aviation consultancy AirTrav Inc.

He pointed out that WestJet91裸聊视频檚 announcement doesn91裸聊视频檛 mean a shrinking of Canada91裸聊视频檚 second-largest airline. In fact, he said it could pave the way for future growth, noting that WestJet also said Thursday it is planning a 91裸聊视频渟ignificant91裸聊视频 additional order of narrow-body aircraft beyond the 30 new Boeing Max airplanes the company is already slated to take delivery off over the next few years.

91裸聊视频淚 also think this is very good news for Alberta, as it really helps to reinforce Alberta91裸聊视频檚 growth as a real aviation, business and economic centre,91裸聊视频 Kokonis said.

WestJet said Thursday it will maintain its current premium offerings, with a focus on strengthening its premium leisure segment and corporate premium in the West. The focus of WestJet91裸聊视频檚 regional fleet of De Haviland Q400 aircraft will be shifted and rightsized to focus on Western Canada.

The airline will also pause further investments in its wide-body fleet of Dreamliners for now. It said route and network changes as a result of Thursday91裸聊视频檚 announcement will be phased in over time, with most taking effect by next summer.

WestJet91裸聊视频檚 acquisition of Sunwing Airlines, which is still pending, is expected to help the company enhance its leisure and vacation offerings.

Karl Moore, associate professor with the Desautels Faculty of Management at McGill University in Montreal, said WestJet91裸聊视频檚 strategy shift is the result of a new CEO who is looking at the company91裸聊视频檚 operations 91裸聊视频渨ith fresh eyes91裸聊视频 and questioning why WestJet is trying to compete on routes that are essentially locked up by Air Canada.

91裸聊视频淚 think he (von Hoensbroech) is looking at 91裸聊视频榳hat are our strengths, what are their strengths,91裸聊视频 and he91裸聊视频檚 made some guesses about it,91裸聊视频 Moore said.

91裸聊视频淚 think he91裸聊视频檚 made the right guess 91裸聊视频 but again, we don91裸聊视频檛 know what the future holds until it unfolds.91裸聊视频

91裸聊视频 Amanda Stephenson, The Canadian Press





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