WestJet’s regional airline will spur fare demand
Nov. 19, 2012, Montreal - WestJet's new regional service set to launch next year will spur passenger demand by offering fares at up to half the level charged on those routes by monopoly operators such as Air Canada, chief executive Gregg Saretsky said Monday.
November 19, 2012 By The Canadian Press
The head of the Calgary-based airline told the Canadian Club in Montreal that WestJet Encore will "liberate'' Canadians who live in smaller communities from the high cost of travel.
He said representatives from small towns pitched WestJet to launch service in their communities because the airline has a history of driving down fares when it comes to town.
Shunning the moniker of price war, Saretsky said "more rational pricing'' will create new demand by encouraging people to take more air trips each year.
"This isn't about carrying the same number of people at half the price. It's about growing the market by 100, 200, 300 per cent and
allowing Canadians access to more affordable airfares.''
While Air Canada may reduce its cost base, Saretsky doubts it will ever get as low as non-unionized WestJet and also match its corporate culture.
"So all things being equal, if our fares are the same, I still believe that consumers will prefer to fly WestJet because of the type of experience that our culture enables,'' he told reporters.
After 16 years of success, including 30 consecutive quarters of profits, Saretsky said he's conscious about being very careful as
WestJet morphs its business model by adding premium economy seats and a new regional service. That's why it set up WestJet Encore as a wholly owned subsidiary that will fly Bombardier's Q400 turboprop and allow the mainline carrier to fly one type of jet.
During the lunchtime speech, Saretsky also railed against federal taxes and fees that have driven millions of Canadians to fly out of
U.S. airports near the border.
He said airport improvement fees can be reduced if the government allocated some of those proceeds to Canadian airports instead of
using that money for its general revenues.