WestJet Airlines Ltd. is mulling over installing a section of "premium economy" seats as part of its strategy to make itself more attractive to business travellers and increase firepower against Air Canada.
Calgary-based WestJet, which has stuck with a single-class cabin since launching in 1996, is exploring ways to improve revenue from corporate customers, as well as passengers transferring from foreign carriers.
"There has been a trend in the industry with other low-cost carriers that have created a premium-coach product in the economy cabin," WestJet chief executive officer Gregg Saretsky said Thursday, after WestJet reported that higher airfares helped lift its second-quarter profit to $25.6-million from $6.8-million.
Premium economy seats offer more legroom than economy. "We're looking at whether or not that might make sense for WestJet, but today, we're not prepared to make any announcements in that regard," Mr. Saretsky said.
WestJet has already rejected the idea of introducing a middle seat that folds down and the armrests form a table. The carrier has also dismissed going head-to-head against Air Canada's business-class cabin, a section that got hit hard in the recession.
"All the math that we've done that looks at the revenue per square foot that we can generate on board the aircraft suggests that a business-class cabin doesn't help us," Mr. Saretsky said during a conference call with industry analysts.
He was responding to question from Cormark Securities Inc. analyst David Newman, who wondered whether WestJet might "change the make-up of the cabin at some point to appeal to the business traveller."
Over the past 18 months, the carrier has unveiled a frequent-flier plan and loyalty credit card program to help lure corporate passengers.
Air Canada's loss narrows
While WestJet posted a second-quarter profit, Air Canada lost $46-million, an improvement from a $318-million loss in the same period last year.
Montreal-based Air Canada had an operating profit of $73-million in the second quarter, up from $47-million a year earlier.
The country's largest airline forecasts that it will incur an extra $800-million in fuel expenses in 2011, or 30 per cent higher than last year's $2.65-billion in fuel costs.
Air Canada – seeking new ways to fend off rivals such as WestJet, Transat A.T. Inc. and Sunwing Travel Group – wants to launch a low-cost carrier in 2012 to attract more leisure travellers.
This week, the union representing flight attendants reached a tentative labour pact, which includes seniority protocols for the discount leisure airline.
"We are certainly encouraged that the negotiating team representing the flight attendants understand the merits and the opportunities that exist for the flight attendants in recommending that they proceed with the low-cost carrier," said Air Canada chief executive officer Calin Rovinescu. "It's always a challenge to explain change to people and why it is that the world has changed around us."