WJ gets big bucks from Barbados

[Kip Powick]

Peruse the Screenshot..little cherry picking by the Green Machine??

[Guest rattler]

Here is a quote from the Minister regarding traffic increase in general, note the mention of AC and their contribution.

The Minister stressed that airlift out of Canada was up, with seat capacity expected to grow by 64 per cent in 2010. Describing Canada as a success story, Sealy said the expansion was spurred by two direct flights by Air Canada out of Montreal every week, as well as more flights and capacity between Toronto and Barbados on both Air Canada and West Jet.

http://www.barbadosadvocate.com/newsitem.asp?NewsID=7049

Cherry picking by Westjet? Perhaps just smart business. I wonder if AC was to ask for the same (perahps with a threat to pull out) what would happen?

[13820]

little cherry picking by the Green Machine

Not sure how you would see this as cherry picking? Do subsidies not get paid out when loads do not meet a predetermined level??

Not sure just asking.

[Kip Powick]

Not sure how you would see this as cherry picking? Do subsidies not get paid out when loads do not meet a predetermined level??

Not sure just asking.

I don't know about all the "deals" airlines make but I do recall another issue, I believe it was in PEI with WJ.

AC could be guilty of the same thing in other places..I just don't know.

Did AC ever get a subsidy for start-up in Barbados?..dunno.......anyone ???

Cherry picking...one airline goes into an airport already being served by a carrier and wants gaurantees that if the loads don't aren't as good as the authorities predict, the authorities will pay $$ to ensure the airline does not loose money.

In this way, an airline can "try" another destination at very little risk and if the first year or so are lean, or until well established, little loss of revenue.

Certainly not like an airline that losses money for the first few years, at the same destination, has no subsides, and takes more time to see better days after being established.

Sweet deal for the "new" airline .............receiving subsides.

[Mitch Cronin]

to ensure the airline does not loose money.

Got ya! ...tsk..tsk...stk...

[13820]

[AME]

Kip

There are certain phrases that will raise the ire of each group here.

1) WestJet - Cherry Picking

2) Air Canada - Government bail out

3) Ex- CP - We saved you

4) Regional (AKA Jazz) - Bottom feeder

I'm sure there's more, but regardless of the context, the use of these pharses will automatically raise the hackles of everyone within the group.

[13820]

There are certain phrases that will raise the ire of each group here.

1) WestJet - Cherry Picking

2) Air Canada - Government bail out

3) Ex- CP - We saved you

4) Regional (AKA Jazz) - Bottom feeder

True.

We could start a list.

[Thebean]

Although it's a nice chunk of change, if you look at what it costs to operate a -700 r/t from YYZ to Barbados, it's a drop in the bucket. It'd probably underwrite about 3 weeks of service.

Besides, what do you care about how the Government of Barbados does to stimulate tourist traffic to their country? It's their #1 industry. They aren't spending your tax dollars.

How is it different than the GoC and GoO throwing subsidies at the auto manufacturers?

BTW, WJ never took a nickle of public funds offered by PEI.

The market responded precisely as was expected / advertised and the thresholds that triggered a subsidy were never met. In fact, as it turned out, it wasn't even close.

It's a matter of public record.

Everyone won. WJ has a viable market and consumers in PEI and the ROC gained a second choice and sustainable low fares when flying to Canada's smallest province.

Who could possibly complain about that sort of win - win scenario?

Last I heard, Quebec was the only province doleing out subsidies to airlines, and then, only to very small markets.

[inchman]

Besides, what do you care about how the Government of Barbados does to stimulate tourist traffic to their country? It's their #1 industry. They aren't spending your tax dollars.

How is it different than the GoC and GoO throwing subsidies at the auto manufacturers?

BTW, WJ never took a nickle of public funds offered by PEI.

The market responded precisely as was expected / advertised and the thresholds that triggered a subsidy were never met. In fact, as it turned out, it wasn't even close.

It's a matter of public record.

Everyone won. WJ has a viable market and consumers in PEI and the ROC gained a second choice and sustainable low fares when flying to Canada's smallest province.

Who could possibly complain about that sort of win - win scenario?

Last I heard, Quebec was the only province doleing out subsidies to airlines, and then, only to very small markets.

Good spin.

The reason why the subsidies in PEI didn't kick in is because AC pulled out in protest of the deal. So, it gave WJ the market all to itself. There was no magical market response to the fabulous WJ arrival.

As far as Barbados goes, I suppose that it would be good for the BGI government if the WJ flights actually increased the number of tourists to their island, but more than likely it just watered down AC's loads and caused two airlines, one of which is subsidized, to waste fuel and lose money. A million bucks is the difference between making money and losing it. Doesn't matter how many weeks of flights it converts to.

Even though it's not tax dollars, it does cost Canadians money when a foreign government subsidizes WJ's competition with Air Canada. It means that AC's other passengers have to make up for the revenue lost on that route so that the airline remains "profitable" despite having those few seats that make the difference between a profitable route and a losing one being siphoned off by a subsidized airline. In this case, AC just didn't roll over and play dead.

BTW, you must know by now how many millions of your predicted extra (new) tourists that the summer WJ service to Yellowknife provided. Care to share that information with the uninformed masses?

[Guest rattler]

Good spin.

BTW, you must know by now how many millions of your predicted extra (new) tourists that the summer WJ service to Yellowknife provided. Care to share that information with the uninformed masses?

I too doubt that the addition of Westjet resulted in additional traffic but since you seem to have some knowledge regarding this, how about you sharing the information?

[inchman]

I too doubt that the addition of Westjet resulted in additional traffic but since you seem to have some knowledge regarding this, how about you sharing the information?

The Bean said, when the discussion was going on about WJ cherry picking Yellowknife service, that it would result in significant NEW traffic. I disagreed and, in this post, was just asking him for the actual numbers since he seems to have them before the rest of us.

[Guest rattler]

Ah so, then we await the Beans numbers.......

but one result has been:

Canadian North (Yellowknife) is cutting some flights from Yellowknife due to increased competition. The carrier will drop the Yellowknife-Calgary route on October 10 and the Yellowknife-Hay River route on October 25.

News link:

www.cbc.ca/canada/north/story/2009/09/24/cdn-north-cuts.html?ref=rss

[chockalicious]

Barbados put the hard sell on WS to start service there. A lot of talk about the old CP service that used to operate from Western Canada direct.

If a subsidy is what it took to get WS to go there then the govt obviously felt that it was the cost of doing business. Competition to Barbados drove down prices and might have let more people go then otherwise would have.

AC was free to complain and ask for the same subsidies however if Barbados thought AC was doing a good enough job they may have not felt the need to pursue another airline.

As far as WS and PEI goes obviously WS did something right because they are still there and never received a dime of public money.

[Guest rattler]

Are you sure they never received a cent of the $1,000,000.00 quoted?

As far as service direct from Western Canada, if thet is what was purchased, it doesn't exist..... Unless you equate direct with a very long overnight connection , but as I said before but perhaps not in so many words, good for Westjet for squeezing out the extra money, too bad for Barbados if AC says "me too"......

Departs  Arrives  Stops  Duration  Aircraft  Price  Seats Remaining 

652

  Westjet

Calgary , AB , CA (YYC)

YYC 12:35 AM

Toronto , ON , CA (YYZ)

YYZ 06:17 AM 0  3 hours

42 minutes  Boeing 737-800  Base Fare: $639.00 CAD 

GST-HST: $1.83 CAD 

AIF: $21.00 CAD 

US-Intl Taxes and Fees: $1.57 CAD 

Other Taxes and Fees: $32.50 CAD 

Total: $695.90 CAD 

$639.00 CAD

Regular Fare 

2512

  Westjet

Toronto , ON , CA (YYZ)

YYZ 09:40 AM Barbados , BB (BGI)

BGI 03:57 PM

0  5 hours

17 minutes 

[chockalicious]

Are you sure they never received a cent of the $1,000,000.00 quoted?

As far as service direct from Western Canada, if thet is wha was purchased, it doesn't exist..... Unless you equate direct with a very long overnight connection

You may want to re-read the post. I said WS never got any PEI money.

The talk was about the service that happened in the past from Western Canada. I never meant to imply that direct service is happening now.

[Guest rattler]

and here I thought the topic introducted by Kip was all about Barbados...... Silly me......

However to quote your post:

Barbados put the hard sell on WS to start service there. A lot of talk about the old CP service that used to operate from Western Canada direct.

If a subsidy is what it took to get WS to go there then the govt obviously felt that it was the cost of doing business. Competition to Barbados drove down prices and might have let more people go then otherwise would have.

AC was free to complain and ask for the same subsidies however if Barbados thought AC was doing a good enough job they may have not felt the need to pursue another airline.As far as WS and PEI goes obviously WS did something right because they are still there and never received a dime of public money.

so not sure why you added in PEI......... Water getting very muddy!!!!

[chockalicious]

I mentioned PEI because it noted earler in the thread and somewhat relates to subsidies.

Are you wearing your thread cop hat tonight?

[Thebean]

Ah so, then we await the Beans numbers.......   

but one result has been:

 

Airlines don't report domestic numbers to Stats Can anymore. They haven't since about 1999.

The YZF Airport Authority has all the data and will release the traffic numbers, I would imagine, sometime in the first quarter of 2010.

Whatever thresholds required for a subsidy from PEI service were never met as the market expanded as it typically does, with fares that allowed WJ to make money given it's cost structure. The service subsequently increased to daily in the summer months, and went from summer seasonal to year 'round, (3x weekly in the winter), well after the subsidy window closed.

If it was a matter of simply redistributing the existing passenger pie, it's likely one or other would have blinked. As usual, the Southwest /WestJet effect kicked in and there are more than enough bums to fill everyone's capacity.

The market is now well-served by a number of airlines and I think you'll find that there is far more traffic flying out of the airport there now than there was pre-WestJet. I don't see how anyone has lost here. Pure win-win.

As for BGI, its a pure leisure market, (ie, how much does it cost?) and well suited to WJ's low cost structure, which, last winter, was under 12 cents a mile over 930 mile asl. The unit costs would be far less than that over 2,400 miles on that sector, likely around 7 cents a mile. That translates into sustainable low fares in perpetuity.

All Barbados wants is lots of warm bodies with fat wallets to fill hotel rooms and restaurants. They probably figure that the most sustainable way of accomplishing this is to incentivize the airlines that have the lowest cost structures, who can therefore sustainably offer the lowest fares. That makes good business sense for the taxpayers of Barbados who are paying for this. WestJet, jetBlue, and I would imagine at some point Air Tran, fulfill this strategy.

The last thing the Gov't of Barbados wants to see is reduced competition resulting in the remaining airlines serving the Island to jack up their fares, therefore diverting traffic to other islands and causing their economic base to further suffer.

Ever tried to get a cheap flight to Grand Cayman?

[Kip Powick]

Kip

There are certain phrases that will raise the ire of each group here.

1) WestJet - Cherry Picking

2) Air Canada - Government bail out

3) Ex- CP - We saved you

4) Regional (AKA Jazz) - Bottom feeder

I'm sure there's more, but regardless of the context, the use of these pharses will automatically raise the hackles of everyone within the group.

Perhaps.....but it does invoke spirited posting and I am at a loss to explain how any airline would lose in a situation as described by the loosely worded article in the Barbados paper......

there ya go Mitch..

[Mitch Cronin]

Now I know you know I knew you knew.

[Thebean]

Now I know you know I knew you knew.

This nicely illustrates what's at stake for Barbados.

---------------------------------------------------------

WestJet flight welcomed as key

partner for Canadian market

PHILIPSBURG--Commissioner of Aviation Frans Richardson and Princess Juliana International Airport (PJIA) operating company PJIAE President Eugene Holiday welcomed the first seasonal non-stop WestJet flight to St. Maarten on Sunday.

They praised the airline as the island’s newest partner for the Canadian market, St. Maarten’s second largest source market.

WestJet Flight 2652 with 116 passengers on board touched down at PJIA just before 4:00pm on Sunday. The airline will fly between Toronto, Ontario, and St. Maarten three times per week, non-stop, from now until April 29, 2010. Flight time each way is about four 4½ hours.

Commissioner Richardson noted that bookings for the airline were looking very well and efforts were made to increase the numbers, which possibly would lead to WestJet increasing the number of flights to the island.

He lauded the economic spin-off the new service will have for St. Maarten in all tourism-related sectors. He said preliminary figures indicated that the WestJet service could account for US $5.5 million for the island’s coffers from November 2009 to April 2010.

Richardson told the WestJet executives in attendance that the airline could count on commitment from his office and the St. Maarten Tourism Bureau in making the business relationship between the airline and the destination a resounding success. He also made special mention of Tourist Bureau head Regina Labega as the driving force behind making the service to St. Maarten a reality.

“Figures made available by the St. Maarten Tourism Bureau indicate total expenditures by U.S. and Canadian visitors in St. Maarten of more than US $39 million during the first six months of this year.

“If we look at projections now, we need to take into account an 80 per cent projected load factor of seating capacity on WestJet flights. In terms of income for St. Maarten, it would mean an increase of almost 50 per cent of what we bring in from the Canadian market annually,” Richardson said.

“As Commissioner responsible for Tourism, Economic Affairs and Aviation, I was thrilled to hear some time ago that bookings for flights to St. Maarten were doing extremely well. Load factors are said to already be in excess of 80 per cent for the first three months of bookings,” he added.

Holiday said the inaugural flight came at a critical moment. The economies of the United States and Canada have reported growth for the first time since the second quarter of 2008. He said consumer confidence was returning and people were expected to start travelling again.

“It comes at a time when our focus is on the end of the recession and the opportunities ahead. This flight therefore comes at a possible turning point in the global economy. Thus, as I looked at WestJet Flight 2652 taxiing towards the terminal, I realised that this new service coincides with expectations of changing economic outlook for the better.

“But above all, because you previously served PJIA as a charter carrier, I realised that this new service expresses a strengthening of WestJet’s confidence and commitment in destination St. Maarten,” Holiday said.

Through this service out of Canada, Holiday added, “We expect to continue to realize our goals as a regional leader offering an extensive network of connections between North America, South America, Europe and the Caribbean. We are therefore pleased and proud to have WestJet join our airport family; we are because we believe that the decision of WestJet to include St. Maarten in your itinerary is expected to play an important role in the realization of our mission.”

[AME]

They praised the airline as the island’s newest partner for the Canadian market, St. Maarten’s second largest source market.

I'm confused WestJet was in SXM back in 2005 when I was working there? or was that simply charter work?

p.s. stay away from the golden eye

[chockalicious]

I'm confused WestJet was in SXM back in 2005 when I was working there? or was that simply charter work?

p.s. stay away from the golden eye

Charter work for Transat Tours.

[Thebean]

The Tourism Minister's comments likely reflect the region's general frustration at the high fares traditionally on offer by various airlines based in North America that were perceived as stiffling their vital tourism industry. They are now enticing low cost, low fare airlines such as Air Tran, Spirit, WestJet and jetBlue to ensure that competition keeps fares low and room occupancy rates up.

==================================================

The inaugural flight of Canadian airline West Jet touched down on the tarmac at the Grand Bahama International Airport yesterday directly from Toronto, carrying 120 persons on-board the 136-seater aircraft.

Government officials and other tourism stakeholders gathered at the airport at 1 p.m. to welcome the passengers, including several executives of West Jet.

During his remarks, Minister of Tourism Vincent Vander-pool-Wallace said:

"Many people don't recognize that about four decades ago, Grand Bahama island had non stop flights from Toronto into West End. Since that time, we've had very few visitors coming in non stop from Canada when in fact this island is one of the closest warm weather island destinations to Canada," he noted.

For a long period of time, however, Grand Bahama found itself in a situation where the distance between Toronto and Freeport was not reflected in the airfare, he said.

"So we have lots of other destinations where people could fly beyond us and find themselves with lower cost airfare and better deals. We think this is the beginning of the end of that. From here forward, Grand Bahama will be far more competitive than it ever was."