At the centre of WestJet Airlines Ltd.’s campus headquarters in Calgary, in the middle of a decorative fountain, sits a large spinning globe. It speaks volumes about the Canadian carrier’s ambitions.
WestJet continues its shift from its folksy, uncomplicated roots. New flights announced Monday are from Calgary to Dallas, connecting the Canadian oil industry to the heart of the U.S. oil sector, and from Toronto to Myrtle Beach, S.C., catering to leisure travellers, marking WestJet’s further push into the United States. Those flights begin April 29 and May 2, respectively.
Also on Monday, the company unveiled the first routes of its regional subsidiary WestJet Encore, with new flights out of Nanaimo, B.C., to Calgary, and Fort St. John, B.C., to Calgary and Vancouver, all using short-haul Bombardier Q400s. Those flights, plus new shuttle flights between Vancouver and Victoria, begin June 24.
The airline is also introducing a new premium economy class seating that is targeted to business fliers.
WestJet is increasingly moving away from the one-size-fits-all discount approach it started out with in 1996, serving only Western Canada with a small fleet of Boeing 737s.
WestJet has been turning itself into a much more complicated business. But industry watchers say that, beneath the homely façade of calling passengers “guests” and employees “WestJetters,” the company has always followed a strategy of expansion and growth. As one of the carrier’s founders, and current chairman of the board, Clive Beddoe said in 2003, “This isn’t a goal post that we need to get across or a finish line. I think is a continuum.”
And the spinning globe at WestJet’s headquarters represents the company’s next logical step, observers say. “Don’t think that they aren’t thinking about international expansion. That’s all in progress,” said analyst Jacques Kavafian of Toll Cross Securities in Toronto. “A lot of people ask me, Aren’t they deviating from their original business plan? But had they stuck to their original business plan, they’d only be flying in Western Canada. So, there is growth to be had.”
After recently announcing a number of regional flights in the West and the oil patch in anticipation of new competition from WestJet Encore, Air Canada recently told analysts that it isn’t planning to increase its domestic capacity dramatically, as it concentrates more on its international routes.
So, there remains room for WestJet Encore to compete regionally. As it continues to expand its Encore service in the West, and then to start regional flights in Eastern Canada in a year’s time as planned, WestJet has said that it expects the cost of regional fares to fall by half as it adds competition to many underserved regions.
WestJet has said that system-wide capacity growth should be between 7.5 and 8.5 per cent in 2013, and domestic capacity should rise by 5 to 6 per cent. It is in expansion mode, and analysts see WestJet executives eyeing international routes across oceans, well beyond its current flights to United States, Mexico and the Caribbean.
“Why would they not?” said industry consultant Rick Erickson of RP Erickson and Associates in Calgary. “We’ll probably hear something in the next 24 to 30 months. And I won’t be surprised that it [involves] Boeing 787s, when all those teething problems are out of that airplane.”
Boeing 787 Dreamliners are currently grounded around the world due to mechanical difficulties, although the industry largely expects those problems to be solved in a matter of months. Mr. Erickson says he wouldn’t be surprised to hear WestJet announce the purchase of 787s, likely flying into tried and trued foreign destination in Europe at first, “but probably serving secondary airports in larger centres because of the reduced costs.”
The company has from the start had an entrepreneurial spirit, he added, noting that WestJet has said it wants to be one of the airlines recognized for its value internationally. And “you can’t get there without introducing new services,” Mr. Erickson said.
Myrtle Beach is located in South Carolina, not North Carolina. Incorrect information appeared in an earlier version of this story.