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Regional carrier will operate apart from main airline: WestJet

"This will be a wholly owned subsidiary with a single fleet of turbo-props, where the operations, the maintenance, the in-flight, the airport and the pilots are part of a separate company, but owned by the same parent," he told an investor conference in New York.

The move would benefit the main network, though, as it would draw more passengers from smaller destinations into major hubs, such as Calgary, he told the conference, sponsored by the Raymond James brokerage.

The Calgary company announced last month it is considering a regional carrier that would give it a presence in
smaller markets where competitor Air Canada is currently the only game in town.

Air Canada Jazz provides regional flights across the country for the Montreal carrier under a contract with Jazz Aviation LP, a former Air Canada company now owned by Halifax-based Chorus Aviation.

WestJet's fleet currently comprises one type of aircraft, Boeing 737s that can carry between 119 and 166 passengers. Those planes are too big to economically shuttle passengers between small destinations like Lethbridge, Alta., or Hamilton.

The company has called its single-fleet strategy its "secret sauce" for keeping costs low as it simplifies training, maintenance and other tasks.

Saretsky said the regional carrier would follow the same recipe, with it including just one type of smaller aircraft, likely 70-seat turboprops such as Bombardier's Q400s.

"We think that when we bring low-cost transportation to the regional space, we'll be able to … grow these markets and create for WestJet a whole new stream of traffic that will continue to allow our 737 fleet to grow," said Saretsky.

"Because not only will we connect these cities with each other, but also with our hubs. So it becomes another facilitator to increase 737 capacity growth."

It's up to WestJet's 7,000 employees, who are also shareholders in the non-union carrier, to approve the proposal.