TheHangarCat
July 27, 2002, 08:57 AM
TSE.com WestJet News (http://tsedb.theglobeandmail.com/servlet/WireFeedRedirect?cf=GlobeInvestor/tsx/config&date=20020726&archive=gam&slug=RJETT)
WestJet looks for U.S. partner
Keith McArthur 00:00 EDT Friday, July 26, 2002
WestJet Airlines Ltd. is looking to team up with Southwest Airlines Co. or another no-frills carrier when it expands to the United States within the next three years.
Mark Hill, the company's vice-president of strategic planning, said that by working with a U.S. discount airline, WestJet could greatly expand the number of U.S. destinations it could market to passengers.
"When we go to the States, we'd be quite keen on doing something with a like-minded carrier to starburst out from somebody else's hub," Mr. Hill said in an interview.
Since it launched service in 1996 with two aircraft, WestJet has said it would eventually fly into the United States. The Calgary-based low-cost carrier, which will have 37 planes in its fleet by the end of the year, already runs charter flights to holiday destinations like Las Vegas.
WestJet officials have said the airline is two to three years away from flying into the United States.
But Mr. Hill said scheduled transborder flights could come sooner if the right kind of deal could be reached with Dallas-based Southwest Airlines, the pioneer of low-cost airlines.
"There isn't a like-minded airline in the world that wouldn't love to do something with Southwest, but at the end of the day, it's up to them to make a call. And if they want to do something with us, we will certainly build that into a business plan and see if it makes sense to us," Mr. Hill said.
In the past, both WestJet and Southwest have shied away from working with other carriers to transfer passengers (interlining) or share flight codes on aircraft.
But Mr. Hill said WestJet would reconsider that position if it could reach the right kind of deal with a U.S. partner.
Southwest spokeswoman Whitney Eichinger said the Dallas-based discounter has no plans to enter into any interlining or code-sharing agreements "at this time." But, she added, it is a Southwest rule to never say never.
Sam Barone, an independent airline analyst based in Ottawa, said a strategic alliance between WestJet and Southwest makes a lot of sense because the carriers are so similar.
He said WestJet could fly into a single destination in the United States -- say Chicago Midway Airport -- from which Southwest could carry passengers on to other U.S. cities.
Such an agreement could boost revenue for both carriers, Mr. Barone said.
"This is really the last frontier of the low-cost carrier in my view. There's never been a continental low-cost carrier between Canada and the United States. And so this might work."
Michael Linenberg, an analyst with Merrill Lynch in New York, said a WestJet-Southwest alliance has some merit. But he said that with the U.S. industry in such rough shape, he can't see it being a priority for Southwest.
Mr. Linenberg said a deal between WestJet and any U.S. discount carrier would have little impact on other airlines serving the transborder market.
"Air Canada would certainly lose some traffic, but I think it would be modest. It would be share shift, but lets call it minimal to modest."
Analysts said that in addition to Southwest, WestJet might pursue strategic alliances with other major no-frills airlines including New York-based JetBlue Airways Corp. or Orlando-based AirTran Airways, the operating unit of AirTran Holdings Inc.
Carla Frio, a spokeswoman for JetBlue, said the airline doesn't do any interlining, but isn't philosophically opposed to the idea.
WestJet looks for U.S. partner
Keith McArthur 00:00 EDT Friday, July 26, 2002
WestJet Airlines Ltd. is looking to team up with Southwest Airlines Co. or another no-frills carrier when it expands to the United States within the next three years.
Mark Hill, the company's vice-president of strategic planning, said that by working with a U.S. discount airline, WestJet could greatly expand the number of U.S. destinations it could market to passengers.
"When we go to the States, we'd be quite keen on doing something with a like-minded carrier to starburst out from somebody else's hub," Mr. Hill said in an interview.
Since it launched service in 1996 with two aircraft, WestJet has said it would eventually fly into the United States. The Calgary-based low-cost carrier, which will have 37 planes in its fleet by the end of the year, already runs charter flights to holiday destinations like Las Vegas.
WestJet officials have said the airline is two to three years away from flying into the United States.
But Mr. Hill said scheduled transborder flights could come sooner if the right kind of deal could be reached with Dallas-based Southwest Airlines, the pioneer of low-cost airlines.
"There isn't a like-minded airline in the world that wouldn't love to do something with Southwest, but at the end of the day, it's up to them to make a call. And if they want to do something with us, we will certainly build that into a business plan and see if it makes sense to us," Mr. Hill said.
In the past, both WestJet and Southwest have shied away from working with other carriers to transfer passengers (interlining) or share flight codes on aircraft.
But Mr. Hill said WestJet would reconsider that position if it could reach the right kind of deal with a U.S. partner.
Southwest spokeswoman Whitney Eichinger said the Dallas-based discounter has no plans to enter into any interlining or code-sharing agreements "at this time." But, she added, it is a Southwest rule to never say never.
Sam Barone, an independent airline analyst based in Ottawa, said a strategic alliance between WestJet and Southwest makes a lot of sense because the carriers are so similar.
He said WestJet could fly into a single destination in the United States -- say Chicago Midway Airport -- from which Southwest could carry passengers on to other U.S. cities.
Such an agreement could boost revenue for both carriers, Mr. Barone said.
"This is really the last frontier of the low-cost carrier in my view. There's never been a continental low-cost carrier between Canada and the United States. And so this might work."
Michael Linenberg, an analyst with Merrill Lynch in New York, said a WestJet-Southwest alliance has some merit. But he said that with the U.S. industry in such rough shape, he can't see it being a priority for Southwest.
Mr. Linenberg said a deal between WestJet and any U.S. discount carrier would have little impact on other airlines serving the transborder market.
"Air Canada would certainly lose some traffic, but I think it would be modest. It would be share shift, but lets call it minimal to modest."
Analysts said that in addition to Southwest, WestJet might pursue strategic alliances with other major no-frills airlines including New York-based JetBlue Airways Corp. or Orlando-based AirTran Airways, the operating unit of AirTran Holdings Inc.
Carla Frio, a spokeswoman for JetBlue, said the airline doesn't do any interlining, but isn't philosophically opposed to the idea.