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WestJet CEO Gregg Saretsky said in a year-end interview that WestJet will focus on acquiring smaller aircraft for neglected domestic markets.

WestJet Airlines Ltd. 's plan to add smaller planes to its fleet will position the carrier to challenge Air Canada for the top spot in carrying domestic traffic within five years.

WestJet chief executive officer Gregg Saretsky said in a year-end interview that WestJet will focus on acquiring smaller aircraft for neglected domestic markets before considering larger planes for routes to Europe and Asia in the long term. Plans call for Calgary-based WestJet to move beyond its single-fleet configuration of Boeing 737s – workhorses for the carrier since it launched in 1996.

On Sunday, industry experts said they were surprised by Mr. Saretsky's comments and expressed optimism that WestJet will be able to tap into Canadian destinations neglected or underserved by Air Canada and its regional affiliate, Jazz Air.

WestJet's domestic market share could grow to 45 per cent by 2017 from its current 36 per cent if it carefully launches short-haul service within Canada with new aircraft, observers say.

"WestJet would have to chip away at Air Canada," said Rick Erickson, an aviation consultant who heads Calgary-based RP Erickson & Associates.

In 2000, Air Canada had 77 per cent of the domestic market, while WestJet held just 7 per cent. But Air Canada decided to devote greater attention to its routes to the United States and overseas. By early 2011, the competitive gap had narrowed to a point where Air Canada's domestic market share slid to 56 per cent and WestJet's grew to 36 per cent. Porter Airlines Inc. and others had the remaining 8 per cent.

Air Canada declined to comment on WestJet's plans.

If WestJet decides to order smaller planes by late 2012, the aircraft will likely start arriving by early 2014, positioning the airline to introduce service to smaller Canadian cities. The carrier has 97 Boeing 737s in its fleet, with another three of the jets to be added this year. The planes seat 119, 136 or 166 passengers, depending on the Boeing model.

On WestJet's shortlist for smaller aircraft is the 70-seat Bombardier Q400 turboprop, a Canadian-built plane used by Toronto-based Porter. The Q400 is also flown on portions of Air Canada's regional service through Jazz Air and Sky Regional Airlines Inc. at Billy Bishop Toronto City Airport.

Industry observers say WestJet will have an advantage over Air Canada-affiliated regional operators that don't have the fuel-efficient Q400, such as Central Mountain Air, which flies older turboprops configured to seat 18 or 30 passengers. Also on WestJet's shortlist is the French-Italian ATR 72 turboprop.

"The Q400 would be ideal as a regional airplane," Mr. Erickson said. "But I still think the end play will be WestJet's entry into the international arena in the longer term. That would be transatlantic routes for starters, and at some point, transpacific, and the connecting passengers from smaller Canadian cities could assist with that."

Mr. Saretsky emphasized that no corporate decision has been finalized on whether to order larger or smaller planes, but he favours nurturing the home market first. He cited examples of new destinations that could benefit from a WestJet expansion: Cranbrook, Prince Rupert, Fort St. John and Dawson Creek in British Columbia; Lethbridge, Alta.; Saguenay, Que.; and Sudbury, Sarnia and Timmins in Ontario.

Karl Moore, a professor at McGill University's Desautels Faculty of Management, said Mr. Saretsky understands the challenges because he worked at Seattle-based Alaska Airlines Inc. It flies Boeing 737s, but its affiliate, Horizon Air, operates Q400 turboprops.

"Certainly, you can see the success of the Q400 for thinner routes," Prof. Moore said. "If you can have a plane that better matches the volume of passengers, it would be a winner."

For WestJet, the key will be to selectively add domestic routes while overcoming the complexity of training pilots and having new aircraft parts on hand for the smaller aircraft, he said. WestJet will be able expand with new planes, but "it's getting away from the business model of simplicity with the Boeing 737."