Canadian airline WestJet is showing no lack of ambition in 2017, revealing plans to launch a new ultra low cost airline, and placing an order for ten new Boeing 787-9 widebodies in the span of two weeks. The moves are triggering market concern about WestJet’s ability to manage such large scale projects simultaneously as its returns are falling below the company’s targeted range.
Following the debut of WestJet’s yet to be named ULCC in early 2018, the company plans to induct the 787 fleet during 2019. It will presumably unveil new long haul markets before the first widebody delivery, which means WestJet will be squarely under way in maturing its new ultra low cost product while embarking on new widebody routes.
WestJet references the successful launch and growth of its regional subsidiary Encore as proof that the company can handle ambitious undertakings. But straddling two major business model changes poses greater risks than simply adding a sub fleet of turboprops for operation on regional routes.
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