WestJet Airlines president & CEO Gregg Saretsky speaks at the company's annual general meeting in Calgary, Alta., Tuesday, May 5, 2015.Larry MacDougal/The Canadian Press
WestJet Airlines Ltd. will remove the middle seat in its premium economy cabin and charge more for the extra room as Canada's second-largest carrier bids to boost revenue.
"It's a completely different product," chief executive officer Gregg Saretsky said on a conference call Tuesday. "Today we have three abreast, tomorrow we have two abreast."
WestJet's "enhanced" premium economy product will be available Wednesday for travel starting Sept. 14, the Calgary-based airline said. Tickets will cost 3 per cent to 9 per cent more than under the current configuration, yet allow for savings of as much as 75 per cent versus competing airlines, Bob Cummings, executive vice-president of sales and marketing, said on the call.
WestJet is preparing to add Boeing Co. 767 aircraft to its plane family by the end of the year. Until then, WestJet will continue to fly only Boeing 737s in its main fleet. It also uses Bombardier Inc. Q400 turboprops at the Encore short-haul unit.
Passengers on both the Boeing 737 and 767 will have the choice of a window or aisle seat, with no middle seating.
On the Boeing 737, the middle seat in premium economy class – called Plus – will be blocked for extra space. On the Boeing 767 jets, the Plus section will include wider seats with each set of two seats separated by an aisle, the company said.
Passengers flying Boeing 767s on longer routes will have access to "premium" food and beverage service, including hot meals.
Earnings Beat
WestJet disclosed the changes after reporting first-quarter profit that topped analysts' estimates. Earnings jumped 58 per cent to $140.7-million or $1.09 a share. The average analyst estimate was $1 a share.
Revenue in the period rose 4 per cent to $1.08-billion, matching the average forecast.
Excluding fuel and profit-sharing, costs for each seat flown a mile will probably rise 2 per cent to 2.5 per cent in the second quarter while revenue for each seat flown a mile posts a "moderate decline" as industry capacity exceeds demand in certain markets, WestJet said in a quarterly filing.
WestJet stock has dropped 16 per cent this year through Monday, trailing the 5-per-cent advance for the benchmark Standard & Poor's/TSX composite index.