WestJet concerned about brand strength in eastern Canada; in talks to partner China Eastern

WestJet CEO, Gregg Saretsky, at the Merrill Lynch Global Transportation Conference, expressed concerns about the carrier’s lack of brand strength in eastern Canada, stating: “I’m almost embarrassed to say that in the Toronto market, we have lower brand awareness than does Porter, a company with 20 small planes versus a company with almost 90 large planes."

Mr Saretsky stated the carrier, which is “very much a western Canada-focused company”, suffers in the east, although he added he expects a new frequent-flyer programme, bundled fares and a loyalty credit card co-branded with RBC MasterCard to help the airline build awareness and attract key corporate customers.

The Canadian LCC is also in talks with China Eastern Airlines regarding an interline agreement, which would likely be expanded to a codeshare agreement. The agreement with China Eastern would represent one of five international agreements the Canadian LCC hopes to reach over the next 18 months and comes after China granted approved destination status (ADS) to Canada in late 2009. WestJet is also reportedly in talks with Korean Air and Japan Airlines and already has inbound interline agreements with Cathay Pacific and China Airlines.

Shares in WestJet were down 0.9% yesterday, while in the US market, shares in AirTran Airways slumped 6.3% yesterday. Southwest, Allegiant and JetBlue were also weaker, down by 2.1%, 2.0% and 1.5%, respectively.

Selected LCCs daily share price movements (% change): 16-Jun-2010