WestJet sees no stumbling blocks as it continues to lay the foundation for its new regional carrier

Confidence among WestJet's senior management team is rampant as the airline moves closer to the launch of its new regional subsidiary dubbed WestJet Encore, which the carrier admits will create some cost pressures going forward as it prepares for the new airline's debut. However, carrier executives believe the underlying premise of WestJet's ability to lower fares in the smaller markets destined for Encore will not inhibit the carrier's yield growth, which during 3Q2012 grew a healthy 3.6%. They conclude the shorter stage lengths of the markets featured in Encore's network will continue to bolster the company's yield growth even as the new airline adds capacity to the Canadian domestic market place, which has seen rational supply expansion during 2012.

WestJet's construction of the new carrier has been swift due to a combination of employee cooperation and communities eager to attract service from the new carrier. WestJet first revealed plans for the proposed new regional subsidiary in Jan-2012 and then moved to secure employee approval to move forward with the enterprise. Endorsement from the workforce was followed by WestJet's order for 20 78-seat Bombardier Q400 turboprops and options for 25 additional aircraft.