Gregg Saretsky knows the importance of navigating WestJet Airlines Ltd. to diversify well beyond its Western Canadian base.
But the WestJet chief executive officer emphasizes that he isn't keen on growth through acquisition, resisting overtures from Porter Airlines Inc.'s investment bankers, who have lobbied Calgary-based WestJet to buy a minority interest in the Toronto-based carrier.
Mr. Saretsky took over as WestJet CEO in April, replacing Sean Durfy, who held the top job for 30 months. WestJet began 2010 in defensive mode, still hurting from efforts to repair relations with customers after the airline botched the introduction of a new computer reservations system in the fall of 2009. The glitches took weeks to resolve, leaving consumers frustrated by website crashes and long waits to get through to the carrier's call centre.
Entering 2011, Mr. Saretsky said WestJet is back in the groove. In a recent interview, he discussed his first nine months on the job, and what's on the horizon.
Q. WestJet wants to co-operate on ticketing and baggage handling with foreign carriers. You want to build on your strengths in the new year, including adding new partners?
The goal is to announce one such deal per quarter in 2011. We're on track to do that. There is a lot of work behind the scenes that will come to fruition.
Q. You recently did a deal with British Airways, for instance. What are your thoughts on signing up Emirates Airline?
We're interested in partners that have the opportunity to drive significant revenue into our network. One geographic region is Africa and the Middle East, where we're looking for a partner. But there are not currently active discussions under way with Emirates. We've had conversations with a whole host of carriers in each of the five regions we've looked at. There are 70 airlines on our list.
Q. What did you think when you heard the United Arab Emirates didn't get the extra Canadian landing rights that it sought from Ottawa?
Liberalized air access is something that WestJet supports. Having more liberal, bilateral policies is better than being more restrictive.
Q. WestJet Vacations started in 2006. How is the division doing?
It's on a tear. It's growing like crazy, and has high acceptance by the public. We're quite a factor on the radar of Canadian vacation travellers in the winter. The airline has capacity growth in the range of 13 per cent to 14 per cent in the fourth quarter, as measured by available seat miles, and WestJet Vacations is growing at a rate that's much faster than that.
Q. How worried are you about Canadians flocking to U.S. airports for cheaper airfares?
We've been following the trend closely. That is a big pain point for Canada generally, and certainly for Canadian carriers. The tax regime on aviation here is oppressive. It's national issue and it's getting bigger in importance.
Q. What would it take for you to permanently add a different type of plane to your current fleet of 91 Boeing 737s?
We need an opportunity that exceeds the opportunity available to us already with 737s. For size and scale, we probably would have a minimum fleet of 10 planes of a different type to serve enough markets year-round. But we have to take delivery of 44 more firm orders for Boeing 737s through 2017. We like that aircraft. At some point, we probably will have a second fleet type. I like the Bombardier Q400s a lot, but we're going to stick to our knitting with the single fleet of 737s for another five to 10 years.
Q. Porter Airlines operates Q400s. Remember that Porter suspended its initial public offering last June. I wonder if Porter's investment bankers will be knocking on your door again in 2011?
They shopped Porter pretty good in the last go-around before the failed IPO. They were seeking an expression of interest on WestJet's part. At the time, we looked at it, and as much as it looked interesting, it wasn't interesting enough for us to take our eye off the ball.
Q. WestJet could have bought a minority stake?
We weren't interested enough in Porter at the time to engage in any discussion with them. There was plenty of speculation because of our strong cash balance.
Q. What's your outlook domestically?
We have aspirations to continue our growth. We've launched new winter service from Ottawa to Halifax, and Ottawa to Vancouver. Those are markets where we had a seasonal presence before, so we're there year-round now. We're going to have to do better than we have historically in terms of being year-round and having daily flight times that business travellers want.
Q. WestJet has been increasing its marketing in Central Canada, so what's coming up next to raise your profile?
We're hosting our first board meeting in Toronto in February. WestJet will be 15 years old at the end of February.
Brent Jang