Company Watch - WestJet Airlines

AirGuide Business, April 7, 2008

Apr 7, 2008

Canada's two largest airlines have raised ticket prices while carrying record numbers of passengers, finding a sweet spot even as many carriers around the world struggle amid soaring fuel costs. Despite the rocky economy, Air Canada and WestJet Airlines have flexed their muscles to push through higher airfares, underscoring the duopoly that they enjoy on domestic routes. A study by investment dealer Raymond James shows that airfares jumped in the first quarter, with the average price for Air Canada's lowest fare category 9 per cent higher than in the same period in 2007. WestJet's average first-quarter fares rose 15 per cent, according to the study of 13 major domestic routes, based on bookings made six weeks in advance. But there is skepticism that the two carriers will be able to maintain their momentum because they are bumping up against comfort zones for consumers. Higher ticket prices, especially if they linger this summer, would translate into emptier planes, so the race to reduce fares is likely around the corner. Robert Kokonis, president of airline consulting firm AirTrav Inc., said many leisure travellers will say no thanks when they see the lofty summer fares now on offer. He expects travel demand to falter as the Canadian economy weakens, reducing the "pricing power" of Air Canada and WestJet. Mar 31, 2008

WestJet Airlines lifted its available seat-mile tally, a measure of capacity, to 1.431 billion from a year-earlier 1.196 billion. Revenue passenger miles rose to 1.239 billion from 1.018 billion in March 2007. Apr 4, 2008

WestJet Airlines, Canada's No. 2 carrier, boosted the number of passengers on its planes for a 15th straight month in March while Air Canada, the country's biggest airline, reported a flat load factor. Both posted sizable increases in overall capacity, according to figures they posted on Thursday, as Canada's airline sector kept enjoying good health and steady customer demand compared with the United States, where a downturn has pushed carriers into merger talks. Calgary-based WestJet said its planes flew a company-record 86.6 percent full last month, up from 85.2 percent a year earlier, the result of its strategy of shifting seasonal capacity around its network. It also cited the high-travel Easter weekend being in March for the increase. Apr 4, 2008

WestJet Airlines is scaling back its relationship with Air Miles, saying yesterday it plans to start its own loyalty program in 2009 but consumers will still be able to redeem Air Miles points for WestJet flights. WestJet signed up as a rewards supplier with Air Miles in 2000 and began awarding points in 2003. WestJet's agreement with Air Miles was due to expire in April, 2009, but the redemption side has been renewed in a "multiyear" pact, said Richard Bartrem, WestJet's vice-president of culture and communications. Mr. Bartrem said WestJet is examining its options for an in-house program to award points directly to passengers. WJA (TSX) fell 24 cents to $17.98. Apr 3, 2008

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