WestJet announced (24-Jun-2013) the launch of WestJet Encore on 24-Jun-2103, with the start-up to initially service Nanaimo, Fort St. John, Vancouver, Victoria and Saskatoon using Bombardier Q400 equipment. WestJet Encore president Ferio Pugliese said: "Our inaugural flights across western Canada today represent the future of enhanced connectivity for Canadians. WestJet Encore is here to liberate smaller communities from the high cost of regional air travel while continuing to provide every guest with our award winning culture of care. Much as we did back in 1996 with national carrier WestJet, WestJet Encore hopes to make regional air travel easier, more accessible and less expensive. Strategically, providing access to more Canadians as well as using WestJet Encore to fly new non-stops and enhance our frequency between markets will not only enable incremental growth from new markets but also enhance our overall value for the business market." [more - original PR]
WestJet launches WestJet Encore
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NewLeaf: the Canadian ULCC readies for launch as a "virtual" airline, and WestJet is ready to pounce
Canadian ULCC NewLeaf Travel plans to make its debut in Jul-2016 after clearing up some uncertainty over correct licensing requirements. NewLeaf is a travel reseller, with its partner Flair Airlines operating aircraft on the new routes. NewLeaf’s different approach has unsurprisingly drawn scrutiny, with questions arising over the viability of a “virtual” airline.
NewLeaf stresses that its strategy is more capital-efficient, and delivers better returns to shareholders by bringing the ULCC concept to market more quickly than other entities attempting to establish a ULCC presence in Canada. Jetlines, which is attempting to launch as a clean-sheet entity, is seeking an exemption from Canada’s restrictive rules governing foreign ownership of airlines – in order to attract non-Canadian investors with experience in establishing ultra-low cost airlines.
During the past three years the Canadian ULCC start-ups attempting to establish themselves have been lumped with failed carriers including Jetsgo, Zoom and Skyservice. Obviously it is too soon to tell if NewLeaf and Jetlines will succumb to the same fate, but there is no question that there are opportunities to stimulate traffic in Canada. However, Canada’s second largest airline WestJet is already making moves into NewLeaf’s markets, and will use its significant market power to compete fiercely against the start-up ULCC.
WestJet expands Encore’s fleet and adds widebody flights as it braces for negative 2Q unit revenues
In the midst of heightened scrutiny over its performance on long haul routes to London and its handling of economic weakness in Western Canada, WestJet has chosen to exercise options for an additional nine Bombardier Q400 turboprops – for operation by its regional subsidiary Encore. The options are the last that WestJet holds with the manufacturer, and once deliveries are complete in 2018 Encore will reach WestJet’s targeted maturity of 45 aircraft.
During its three years of existence Encore has grown rapidly, and now offers 168 daily flights to 36 destinations. WestJet’s execution in developing and growing Encore has largely been successful, stimulating traffic in smaller markets previously dominated by a single airline.
In addition to Encore’s expansion, WestJet continues to court business travellers through its enhanced Plus product while attempting to navigate a weak unit revenue environment. The airline believes its negative performance will improve sequentially through 2016, but it is unlikely that WestJet can achieve a positive result in that metric this year.