Westjet Regional To Liberate Canadians From Ac Monopoly

[Kip Powick]

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MONTREAL

"WestJets new regional service set to launch next year will spur passenger demand by offering fares at up to half the level charged on those routes by monopoly operators such as Air Canada", chief executive Gregg Saretsky said Monday.

The head of the Calgary-based airline told the Canadian Club in Montreal that WestJet Encore will "liberate" Canadians who live in smaller communities from the high cost of travel.

He said representatives from small towns pitched WestJet to launch service in their communities because the airline has a history of driving down fares when it comes to town.

Shunning the moniker of price war, Saretsky said ,"more rational pricing; will create new demand by encouraging people to take more air trips each year."

"This isn't about carrying the same number of people at half the price. It's about growing the market by 100, 200, 300 per cent and allowing Canadians access to more affordable airfares"

While Air Canada may reduce its cost base, Saretsky doubts it will ever get as low as non-unionized WestJet and also match its corporate culture.

"So all things being equal, if our fares are the same, I still believe that consumers will prefer to fly WestJet because of the type of experience that our culture enables" he told reporters.

After 16 years of success, including 30 consecutive quarters of profits, Saretsky said he’s conscious about being very careful as WestJet morphs its business model by adding premium economy seats and a new regional service. That's why it set up WestJet Encore as a wholly owned subsidiary that will fly Bombardier Q400 turboprop and allow the mainline carrier to fly one type of jet.

During the lunchtime speech, Saretsky also railed against federal taxes and fees that have driven millions of Canadians to fly out of U.S. airports near the border.

He said airport improvement fees can be reduced if the government allocated some of those proceeds to Canadian airports instead of using that money for its general revenues

[Don Hudson]

"...monopoly operators such as Air Canada..."

[melcrothers]

YXY, YXC, YYF, YQL are Jazz only operations - there have to be a few more in Ontario.

[Don Hudson]

malcolm;

Well, it's no big deal but really, AC, a "monopoly"?

I'm not sure what Mr. Saretsky intended by calling Air Canada a "monopoly operator" but the statement itself is pretty clear. Boost a new service etc all one desires but the statement IS laughable for anyone to make let alone a CEO.

AC isn't a monopoly. For proof I cite the absence of the Federal Government's Competition Bureau in AC's offices and in the media.

RE, "So I guess the announcement really means that they will beat the heck out of the fares to / from YYF."

[Fido]

When I first read the announcement I thought maybe Gregg had succumbed to the cliched Westjet rhetoric of old and then I remembered that CEO's get someone else to write this ****.

[AME]

When I first read the announcement I thought maybe Gregg had succumbed to the cliched Westjet rhetoric of old and then I remembered that CEO's get someone else to write this ****.

Don't forget he is launching a brand new company so the tried and true rhetoric that Clive used may be just what is needed to get everyone on board. (pun intended)

[Thebean]

"tried and true" translation = Business BS.

Definitional semantics aside, I suspect Gregg is referring more to the very high walk up fares that one finds on a number of regional routes throughout Canada, whether they are operated by a major airline or a smaller operation.

As was the case in the mid 90's, WestJet will likely target a significant number of those routes with a lower cost structure giving them the ability to sustainably offer significantly lower fares.

That should stimulate considerably more traffic and expand markets, just as it did during WJ's first decade. I wouldn't be at all surprised if all airlines experience traffic growth in the various markets.

It's not just guys on expense accounts in suits with briefcases that need to travel last minute and the new cost and fare structure will dramatically address that issue.

The difference is some airlines will be profitable at the new fare levels regardless of traffic levels and others won't.

This will lead to changes in the marketplace, again, no different than the changes that WJ forced on the marketplace over it's first 10 years or so.

Analysis makes it pretty obvious that 45 tails is a conservative estimate of the total fleet Encore could eventually operate by the end of the decade.

[GTFA]

YXY, YXC, YYF, YQL are Jazz only operations - there have to be a few more in Ontario.

Mel... None of those routes or any other for that matter are JAZZ, they are Air Canada. Jazz does a few charters for itself but everything else, unfortunately, is under the ownership and control of Air Canada.

Just sayin'... again...

[Seeker]

WestJet President Greg Saretsky tells the Globe and Mail the airport authorities making bids had to pass a financial test, proving their route can be profitable. In some cases, he says that might be the result of airport authorities offering reduced landing fees, lower terminal costs or even marketing dollars.

I can barely contain my anger over this BS! After years or decades of charging Air Canada one rate it suddenly becomes possible to provide a lower rate to Westjet? All I can say is I better not ever meet any Westjetter in person spouting off about how "Encore" lowered the price of airfares.

[Guest]

I can barely contain my anger over this BS! After years or decades of charging Air Canada one rate it suddenly becomes possible to provide a lower rate to Westjet? All I can say is I better not ever meet any Westjetter in person spouting off about how "Encore" lowered the price of airfares.

How many millions did AC stiff airport authorities in 2003. It's probably good business for small airports to diversify their clientele.

And don't kid yourself... Pretty much every airport offers incentives to any new carriers or carriers operating new routes, etc...

Carriers also dangle the opportunity for new routes in hopes of getting existing landing fees reduced.

In my time at AC, I processed a few rate discounts for proposed and new routes so the AC hands aren't exactly clean.

[Bryon Mask]

Does this mean they will provide all year service to places like YQY instead of summer service only and with reduced fares to boot? If so that will make going back and forth from the cottage to Ottawa much more easier next year.

[Jumpy]

Seeker....seriously? After years of monopolizing airfares there are many airlines about to face a new reality.....they can either adapt or choose to be mired in realities of the past....

[Seeker]

Just did the math on the pay rates for Encore; Capt's - 10K less per year (corrected for inflation) than I earned at Bearskin as a Metro skipper back in the 90s. I'm thinking that decision to vote "yes" doesn't look so good now. Of course the non-pilot employees will be rubbing their hands with glee - "yay, profit sharing!" Wouldn't want to be a middle of the pack FO waiting for an upgrade though.

[Jumpy]

Seeker, unless you have an inside knowledge of the total compensation, you are once again incorrect. Also begs the question that if it was a sustainable and gainful compensation, why you aren't still flying a metro at Bearskin....?

[thor]

Just did the math on the pay rates for Encore; Capt's - 10K less per year (corrected for inflation) than I earned at Bearskin as a Metro skipper back in the 90s. I'm thinking that decision to vote "yes" doesn't look so good now. Of course the non-pilot employees will be rubbing their hands with glee - "yay, profit sharing!" Wouldn't want to be a middle of the pack FO waiting for an upgrade though.

25 years ago at the ripe old age of 27 I was making $48k flying light piston twins and I gladly took an F/O job making $24k annually. It took about 2.5 years before I caught up. No regrets. Seeker I don't recommend that you apply.

[CD]

Seeker, unless you have an inside knowledge of the total compensation, you are once again incorrect.

There is discussion of compensation over on the junior board:

AvCanada: Encore WACON released and surprise, it sucks

[Dork]

Compensation rates for pilots are no longer competitive in Canada. Get the job, get checked out on type, put in the minimum time and run.

Take your skills elsewhere and get paid properly.

No further discusion is required.Simple as that.

Dork

[vanishing point]

And just where is one supposed to "run" to? Not everyone wants to be on the "away" team and spend their careers offshore.

[xmikes@imap.cc]

My buddy in Asia flew 128 hours in 28 days, he usually does 110 - scheduled. Great lifestyle, NOT.

[Maverick]

Compensation rates for pilots are no longer competitive in Canada. Get the job, get checked out on type, put in the minimum time and run.

Take your skills elsewhere and get paid properly.

No further discusion is required.Simple as that.

Dork

So what are you still doing here then?

[Dork]

I'm gone . At first it was a difficult decision but well worth it in the end.

I couldn't afford the Employee subsidized CEO package anymore, nor the pension risk.

The pilot race to the bottom is generated by pilots themselves. They never leave their buddy's behind.

Flew with many great folks, they know where to find me. Enjoy the pathetic show here..it will be an ugly one.

The new lads will not stick around for this nonsense. Give it 4 years is my guess.

Dork

[Maverick]

I'm gone . At first it was a difficult decision but well worth it in the end.

I couldn't afford the Employee subsidized CEO package anymore, nor the pension risk.

The pilot race to the bottom is generated by pilots themselves. They never leave their buddy's behind.

Flew with many great folks, they know where to find me. Enjoy the pathetic show here..it will be an ugly one.

The new lads will not stick around for this nonsense. Give it 4 years is my guess.

Dork

With absolute sincerity I say good on 'ya! It's one thing to bitch and moan and another all together to put your money where your mouth is!

Good luck and let us know how it turns out.

[Dork]

Thanks Mav...I always wanted to say that. I do wish those still working here at any Canadian company all the best. We do have amazing all weather pilots at all of the airlines here.

Best part is I fly AC, Porter and Westjet..whoever happens to have a seat avaliable to buy. Tomorrow morning it's Westjet, Ac the next.

Dork

[Johnny]

Best Wishes Dork, good on you for getting the hell out. It is a sad side show what is (has) happened to this Profession in Canada.

200+ foreign Pilots at Sunwing, just so the Airline doesn't have to spend a red cent on training - pathetic. Followed by; Sky Regional, Encore and Rouge all paying Starbucks Wages.

We are about to see the entry level Airline jobs go to 250 hour Pilots, all in the name of keeping the salaries at the Poverty Line. Following the end game of funneling money to a very select group of " One Percenters."

I can't get out, soon enough!

Cheers

[Dork]

Johnny,

You said it all. It is sad to watch the destruction of the profession here in Canada. I don't leave angry just disgusted.

It is no easy walk where I am going, the scheduling rules will be similar to the proposed LCC nonsense here. The only real difference is the pay is double the previous mainline rate and anything over 80 hrs attracts a large overtime premium.

Mostly 49 yr olds going to these jobs, however there are some 29 year old airbus skippers from Europe who have been kicked around in a system thati s being proposed here. They bailed out as quickly as possible and will be retired before 45. I must say they are great guys and sharp. Ahh to be 29 again...but I digress. That is the reason I believe the youth here will bail as well.

All the best. I look forward to the rediculous posts from Dagger explaining why pilots don`t need to be paid and I will laugh..all the way to the bank.

Dork