WJ in the East

[dagger]

Scalped this from a post on airliner.net.

Pertains to WJ's service cuts in YUL and YOW

A revised WestJet schedule shows some significant scaling down of services offered to Montreal and Ottawa.

YUL before:

YYC 1

YVR 2

YYZ 7

YQM 1

YHZ 1

YWG 1 13 daily

YUL after:

YYC 1

YVR 1

YYZ 4

YWG 1 7 daily

YOW before:

YYC 1

YVR 1

YWG 1

YYZ 7

YEG 1 12 daily

YOW after:

YYC 2

YVR 1

YWG 1

YYZ 4

YEG 0 8 daily

[Flightlevels]

that's good. glad to see they are adjusting per demand too.

[Spinnaker]

I met that new VP from Enmax about a month ago. He did say a lot of schedule changes were coming, my guess is this is just a start.

And, from snooping around the pilot schedules... WestJet looks more like charter carrier with a part time sked business right now.

[E-HANDLE]

Hpefully they can use the extra capacity for a second Calgary-LA and daily Pheonix.

[dagger]

Hpefully they can use the extra capacity for a second Calgary-LA and daily Pheonix.

Interesting you say that. I was thinking tonight that Westjet may be evolving more towards a carrier operating largely within the parametres of Toronto and Vancouver, both east-west and north-south, with only a few spokes into central and Atlantic Canada, but not a regional hub operation within those regions. That dog won't hunt.

Toronto may become more of a focus city than a hub, and it may beg the question of whether WJ will choose to sustain both Toronto and Hamilton ops. If WJ can't sustain more than four flights in YUL and YOW, what happens when AC begins some YYZ overflights from YOW and YUL with the new 75-seaters? WJ will lose some of the YOW and YUL feed it has. I always said WJ should focus on its strengths, and become dominant where the market will respond. That includes Western Canada-US routes.

[CanadaEH]

What happens to Air Canada's rapidair when it starts to overfly YYZ?

We've already gone over the drop in service in the triangle, what's your point this time around, dagger?

[Mitch Cronin]

What happens to Air Canada's rapidair when it starts to overfly YYZ?

Heh? I thought "Rapidair" necessarily involved YYZ?

What'd I miss?...

[dagger]

Heh? I thought "Rapidair" necessarily involved YYZ?

What'd I miss?...

It's November - normally a slow month - and Rapidair is bursting at the seams. Anmd this is with 13 WJ flights on the triangle. It won't get any looser as WJ drops down to eight. And AC is adding intercontinental services in Toronto and probably Montreal that will be using cross-feed that flows over Rapidair like an air bridge. So AC actually has a good reason as its grows its two eastern hubs to use 75-seaters and 50-seaters to overfly Toronto.

That accomplishes four things:

1) It relieves pressure on the existing Rapidair capacity, allowing O&D growth, and reduces the possibility of spilling traffic to competitors

2) It creates new nonstop corridors, taking business away from AC's competitors.

3) The creation of these nonstop corridors is a value enhancer, allowing AC to price up a bit more on those routes. For sake of argument. if you create an Ottawa-Regina nonstop with the smaller aircraft, it will be more desirable than the current Ottawa-Toronto-Regina connecting service so you don't have to discount the new flight. It can be high yield capture.

4) If you do take off enough Toronto-Regina connecting traffic by creating an Ottawa-Regina flight, you can also introduce a smaller jet (Embraer) on Toronto-Regina, thereby paying a lower landing fee (fees are weight based) at YYZ and using the displaced Airbus for a longer-haul route.

Also, CanadaEH, I am glad to see you are now an exponent of my WJ-is-the-meat-in-the-balogna-sandwich analysis, and have gone as far as embracing my idea that WJ will eventually have to get a smaller aircraft than the 737-600. I am right on this one too, you know.

[better4me]

Dagger;

I agree with you on YYZ being a focus city but disagree on YVR. I think the two important cities are YYZ and YYC. Consider these points.

1) Half of WS traffic flows through YYC and it's their only true focus city (as a traditionalist, there is only one hub in Canada and it's AC's YYZ ops). Therefore the transborder ops will continue to prosper from YYC because WS can pull traffic from YEG, YQR, YXE, etc.

2)The Toronto transborder ops currently suffer from a significantly reduced capability on the connection front when compared to YYC. Additionally many of the YYZ connections (i.e.the Florida flights) have overfly options that customers prefer. IMHO, this is what did in YYZ-LAX.

3) The YYZ transborder ops have the second best gate allignments in the WS system because they have swing capability. The gates are relatively close together, increasing passenger and employee comfort and efficiency. Only the YYC ops are better for WS and will get better once the four gates on Pier D widening are completed.

4) On the Transborder front, YVR is a poor connection and O&D city for WS. It doesn't get any farther apart than A5 to E80 and there are no transit systems available (converted golf carts excepted). Competition is another factor with AS being very protective of the YVR market. AS has driven out CP and then AC on the Pacific coast north-south routes. their recent capacity increase to SAN and PSP will only solidify the operation. Additionally, it is AS that is anchoring fares on the YYC-LAX route.

5) Without the Pacific International operations YVR is terminus location. AC had the same problem before the CP merger and WS now wears the hat. With no significant capacity for connection opportunities, demand is reduced by 40% on average. I get the 40% because on average that is the number of passenger connnected at either end of the segment. However some flights like UAs DEN-YYC route have near 100% connection rate.

[deicer]

3) The YYZ transborder ops have the second best gate allignments in the WS system because they have swing capability. The gates are relatively close together, increasing passenger and employee comfort and efficiency. Only the YYC ops are better for WS and will get better once the four gates on Pier D widening are completed.

This advantage will be short lived if the TNew hammerhead is opened on time next year and they take down the first third of T2.

More of the same 'ole.....

Iceman

[2.0EPR]

I agree with you on YYZ being a focus city but disagree on YVR. I think the two important cities are YYZ and YYC. Consider these points.

I think you'll be quite surprised on what YVR has to yet to come.....Just sit back, relax and watch the main cities in Canada be YVR and YYZ.

YYC is at capacity now...YVR and YYZ are still growing and will befor a while.

[CanadaEH]

Also, CanadaEH, I am glad to see you are now an exponent of my WJ-is-the-meat-in-the-balogna-sandwich analysis, and have gone as far as embracing my idea that WJ will eventually have to get a smaller aircraft than the 737-600. I am right on this one too, you know

At the time you mentioned it I didn't agree with you, but in hindsight...

I'm curious to know what you think would be the best go-forward strategy in regards to escaping that description? I feel that our pricing strategy needs kick in the ass, and matching seat sale for seat sale, price for price is the only way to remain competitive and "cheap" in the minds of customers. We started a seat sale last week that would highlight that change, with fares ranging from $42 (YVRYEG) to $99 (YYC/YVR-YYZ) and up. This strategy will not doubt hurt us financially, but you've said it and we've seen it: our current strategy is not working.

The meat needs to get a little soggy and sink into the bottom piece of bread.

[Seeker]

The meat needs to get a little soggy and sink into the bottom piece of bread.

Don't know what you're trying to say here but whatever it is - doesn't sound good.

[dagger]

At the time you mentioned it I didn't agree with you, but in hindsight...

I'm curious to know what you think would be the best go-forward strategy in regards to escaping that description? I feel that our pricing strategy needs kick in the ass, and matching seat sale for seat sale, price for price is the only way to remain competitive and "cheap" in the minds of customers. We started a seat sale last week that would highlight that change, with fares ranging from $42 (YVRYEG) to $99 (YYC/YVR-YYZ) and up. This strategy will not doubt hurt us financially, but you've said it and we've seen it: our current strategy is not working.

The meat needs to get a little soggy and sink into the bottom piece of bread. 

I think WJ is starting to get into a trap where it has allowed its identity to be blurred. Once the indisputable low fare option, it is now viewed in a lot of markets as high fare (compared to others on the route). This is because WJ got to like the level of profitability it was incurring, so it chased yield and let SG and CJ come in under the radar to be the low-price leaders. SG has its detractors and it gets a lot of flaming from WJ people, but it's still around and may be a year or two from now for all we know. And CJ just goes about its business in a neat, orderly, patient manner - very much like WJ used to be. CJ is not rushed to expand, not eager to expand beyond its Atlantic base, not rushing into brand new aircraft or amenities. I was also struck by one of the regular WJ posters' comments that right now, WJ looks like a charter carrier with a part-time sked operation. You can't go in and out of markets, raising, lowering and eliminating frequencies and routes to the point where you have no consistent product for the business traveller. If you are a VFR airline - purely leisure - that works because you are following the seasonality of the leisure market, but if you are pricing up to capture business travellers, you need to be more consistent on the product side, especially with frequency. And outside of the West, WJ isn't doing that. WJ has to decide whether to go after business travellers in Central and Atlantic Canada with a consistent product - which means keeping capacity in markets that could be flown more profitably elsewhere - or it must refocus on the leisure market and say the heck with the business traveller as a target group, we're going to regain our crown as the low-fare leader. Pursuing that strategy may mean ordering fewer jets, because if anything, the WJ Field of Dreams Strategy of fly it, they will come, does not work in every market, every route, and you have to focus only on those routes where it will and achieve dominance before you can risk expansion into more problematic areas of the country. On the other hand, if WJ really wants to be the new Canadi>n Airlines with a product that appeals to business travellers, it probably should have ordered a smaller jet by now.

So first thing I would do, find a clear identity again and articulate it to the public.

I might look at dropping YYZ for all but long-hauls from the West, and operate connecting services out of YHM. The move to YYZ was likely influenced by a view that WJ could keep taking business away from AC, but a year of traffic growth for AC would suggest otherwise.

AC keeps modulating its product. The latest move, to make FUN a more attractive business fare, may hurt WJ. AC has endowed FUN, which is the fare between TANGO and LATITUDE, with a same-day rebooking option. With FUN, you can pay a $50 change fee at the airport and get a confirmed booking on an earlier or later flight. You don't have to pay any fare difference if the FUN price is higher than when you booked. This is confirmed rebooking - not standby. You pay $50 and you get on the flight you want (assuming there is FUN capacity available, which there usually is). That is designed to get some TANGO travellers to book up, but it also provides a competitive advantage over WJ for the business traveller. With WJ, you would either pay the $30 change fee plus the applicable difference in fares, or you would go on standby. There is even talk of allowing the same on TANGO for a $125 fee, but I have my doubts.

AC has a lot more up its sleeve, like all of those 75-seat and 50-seat aircraft coming, which will be used in some domestic situations to build frequency and new nonstop routes. Much of that os aimed at reinforcing its appeal to higher-yielding passengers.

So I believe WJ, with its favorable cost structure, has to look down at the more vulnerable part of the marketplace, the discounters, and reassert its dominance against them. Trouble is, there is a cost associated with heavy discounting. Would WJ pay the cost?

Corporately, a deal with Transat might be offer a lot of synergies, but again, there has to be a clear focus on leisure for that to work. I am convinced that alliances with foreign full service airlines would do any good whatsoever.

[E-HANDLE]

That's quite the wish list, Dagger.

Let's see, WestJet should;

-stop adding aircraft

-stop adding amenities

-stick to western Canada

-not engage in alliances with foriegn carriers that would negatively impact AC

-move everything back to YHM, out of AC's way

-forget about business travellers

-fight for the lowest yeild traffic with JetsGo, while leaving the higher yield traffic to AC

Did I miss anything? Fold up the tent and just go away, maybe?

Well...Christmas is coming. Might as well dream big!

[Cargo Agent]

That's quite the wish list, Dagger.

Let's see, WestJet should;

-stop adding aircraft

-stop adding amenities

-stick to western Canada

-not engage in alliances with foriegn carriers that would negatively impact AC

-move everything back to YHM, out of AC's way

-forget about business travellers

-fight for the lowest yeild traffic with JetsGo, while leaving the higher yield traffic to AC

Did I miss anything? Fold up the tent and just go away, maybe?

Well...Christmas is coming. Might as well dream big!

Your right, please don't do any of those things. Keep doing exactly what you've been doing lately. Please.

CA

[dagger]

Let's see, WestJet should;

-stop adding aircraft (Got nowhere to put more profitably)

-stop adding amenities (Aside from LiveTV, what are you adding?)

-stick to western Canada (Making money anywhere else?)

-not engage in alliances with foriegn carriers that would negatively impact AC (Won't hurt AC a bit...)

-move everything back to YHM, out of AC's way (You hurt AC more at YHM)

-forget about business travellers (Aren't getting many anyway except the in the West)

-fight for the lowest yeild traffic with JetsGo, while leaving the higher yield traffic to AC (See above...)

[E-HANDLE]

Calling me a twit was a nice touch. Ya shudda left it in.

If short haul out of YHM was such a good deal Canjet wouldn't have sh*tcanned flights to YUL, and cut back on other routes.

I disagree that there aren't any profitable routes left to put more airplanes on. WestJet will be doing a little hub-busting of it's own, I'm thinkin'.

I think WestJet is making profits from YYZ to Halifax, Moncton, Newfoundland.

I'm not at all sure AC is invinsable on international flights. An alliance that provides feed from Canadian cities to gateway cities might cause some discomfort to AC.

TV's, buy on board food, maybe web check-in.

I suppose we will keep doing what we have been doing. Try something, evaluate, change as neccesary.

[dagger]

Calling me a twit was a nice touch. Ya shudda left it in.

If short haul out of YHM was such a good deal Canjet wouldn't have sh*tcanned flights to YUL, and cut back on other routes.

I disagree that there aren't any profitable routes left to put more airplanes on. WestJet will be doing a little hub-busting of it's own, I'm thinkin'.

I think WestJet is making profits from YYZ to Halifax, Moncton, Newfoundland.

I'm not at all sure AC is invinsable on international flights. An alliance that provides feed from Canadian cities to gateway cities might cause some discomfort to AC.

TV's, buy on board food, maybe web check-in.

I suppose we will keep doing what we have been doing. Try something, evaluate, change as neccesary.

Canjet doesn't have a national network, and that's why it hasn't done better at Hamilton. But it could do a lot better if it added a few spokes there. WJ certainly had a much bigger network in Hamilton.

WJ will do a little hub-busting of its own? Maybe, but if you look at the triangle reductions, some of your hub-busters are being withdrawn.

I'm sure WJ has some profitable routes down east out of Toronto in the summer, but not right now, not with its loads and not with current yields. It's problematic whether it can make money on those routes except in the summer. Those summer profits may justify summer capacity.

Nobody is invinceable in any market. But most people flying to Asia - for sake of argument - are coming out of two markets. One, YVR, needs no feed, and the other, YYZ, will be influenced heavily by the addition of nonstop routes. How many Toronto-Asia flights are there on other carriers? CX and who else? How many Latin American carriers? Nada. There might be select opportunities to Europe, but the foreign carrier has higher costs so it has to price a combination fare with WJ significantly above what AC can price for a through fare.

AC is the carrier most likely to add YYZ-Asia routes. There are at least two in the queue for next summer. The key is that AC's lower costs give the airline a distinct cost advantage over many of its foreign competitors, which is why AC is bringing in eight widebodies for 05, and likely more in 06.

Interline feed is notoriously low yield, and in the summer, WJ can get a better yield off domestic traffic than it can feeding someone from, say YUL to YVR. To Europe, there are a lot of nonstop charter options from a lot of cities and I presume in some markets people are already flying on the cheapest WS or SG fare to the hub to get a charter or foreign carrier. So you are not likely to gain very much...

Live TV - others will have in-seat entertainment

Buy on board food - AC already has it

Web check-in - AC and Jetsgo already have it

[beaverboy]

Live TV - others will have in-seat entertainment

Yes, others will have entertainment, but will they have wireless internet on board?

[dagger]

Yes, others will have entertainment, but will they have wireless internet on board?

You won't either. Not in 2005 anyway.

[beaverboy]

You won't either. Not in 2005 anyway.

Do not be too sure about that! You may have your "inside" information for AC, but I do not think that you know too much about the workings of WJ.

[dagger]

Do not be too sure about that! You may have your "inside" information for AC, but I do not think that you know too much about the workings of WJ.

Well, I'm certainly off Mark Hill's Christmas card list. But then again, wireless internet is not part of the DirectTV install. Boeing's Connexion is a separate install, and a mighty pricey one at that which is why very few airlines are biting. It would be a retrofit for most of your fleet. But hey, if you would rather spend your profit sharing on wireless internet, be my guest. Most other airlines will mull the option but wait until Boeing comes to its senses and brings the cost under seven figures per aircraft.

Right now, no airline can afford to offer it as a free service. It's being marketed by ANA on select intercontinental widebodies for a cost of US$20 per flight, or about $10 for the first 30 minutes if you want to pay as you go. Of the five airlines commited to the product in 2005, the most recent signators have agreed to a very slow introduction in order to test whether customers are willing to pay for the service. The assumption is that on 300-seat and 400-seat aircraft, flying Europe-Asia or Asia-North America, you can find enough paying customers to offset the cost of operating the service on that flight. No airline to my knowledge has ordered the product for a narrowbody operating flights as short as Westjet's average stage length. Wireless internet will have its day, but it's destined to be a niche product for the next year or two. Unless the Mad Hatter is your new chief financial officer, all you are doing in the wireless internet area is kicking tires.

[beaverboy]

Well, I'm certainly off Mark Hill's Christmas card list. But then again, wireless internet is not part of the DirectTV install. Boeing's Connexion is a separate install, and a mighty pricey one at that which is why very few airlines are biting. It would be a retrofit for most of your fleet. But hey, if you would rather spend your profit sharing on wireless internet, be my guest. Most other airlines will mull the option but wait until Boeing comes to its senses and brings the cost under seven figures per aircraft.

I think that you are being very defensive regarding WJ getting internet aboard their aircraft before AC. But then again, you are probably steamed that WJ has the rights to live tv for the next five years up here in Canada!

[dagger]

I think that you are being very defensive regarding WJ getting internet aboard their aircraft before AC. But then again, you are probably steamed that WJ has the rights to live tv for the next five years up here in Canada!

Not at all... I'd rather have video on demand, just like my Movie Channels, than Live TV on most flights. There are occasions when Live TV would be attractive. Simple as that. But you don't build a schedule around the times when there is breaking news on CNN.

And given my choice of having LiveTV or 81 new intermediate sized jets coming in over the next 36 months, I'd take the jets for all the added convenience of new nonstop routes and timely frequency additions that will enhance the AC product by reducing total trip time and airport wait time so I can get home faster, take my shoes off, grab a cool one, and watch live TV on my 60-inch plasma screen.