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WestJet to launch ULCC???


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My sense is that the Westjet announcement is a defensive measure that will launch - or not - depending on the development of the marketplace. i.e. new entrants, or moves by AC. My hunch is there will be no rush to launch if there is no obvious benefit. So if new entrants don't get off the ground, or expand current schedules, it can be delayed, but left out there as a deterrent. 

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10 minutes ago, dagger said:

My sense is that the Westjet announcement is a defensive measure that will launch - or not - depending on the development of the marketplace. i.e. new entrants, or moves by AC. My hunch is there will be no rush to launch if there is no obvious benefit. So if new entrants don't get off the ground, or expand current schedules, it can be delayed, but left out there as a deterrent. 

That might well be the case but it does appear that the announcement has caused quite a ripple of reaction/concern from present WestJet employees and in particular those who believe that their only protection will be unionizing. 

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2 hours ago, Malcolm said:

That might well be the case but it does appear that the announcement has caused quite a ripple of reaction/concern from present WestJet employees and in particular those who believe that their only protection will be unionizing. 

Well, sometimes actions lead to unexpected consequences. But I don't think this would spark people to join a union who weren't already considering it

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39 minutes ago, dagger said:

Well, sometimes actions lead to unexpected consequences. But I don't think this would spark people to join a union who weren't already considering it

but it might just sway the "fence sitters".  Anyway, I wonder if the new(if it happens) carrier will adopt the Samoa weight charge model? :D

 

Quote

 

Welcome to Samoa Air

"Where you pay by weight"

Thank you for your interest in Samoa Air services.

 

 

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51 minutes ago, CanadaEH said:

I beg to differ. 

Sorry guy, did not mean it to be named after you but .... I do think the name would be suitable to a Canadian Ultra Low Low Cost product being spun off from an airline who has always boasted about their Low Cost Fares.  My name choice was prompted by 

Quote

IT'S A CANADA DAY PROMO CODE, EH! Save an extra 10% off new online bookings for travel between Canadian cities. Discount applies to base fare excluding taxes and fees.

Bookings must be made by July 2, 2012 (9:59 p.m. MT) and travel must occur by October 27, 2012. Blackout dates are from August 1-8, 2012 and October 4-9, 2012.

For full details, terms and conditions: http://fly.ws/PromoCodeEh

 

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Quote from another forum. The writer's tone and style might seem familiar to some of the more seasoned members of this venue ;-)

-T9

 

"It's probably safe to say YHM will be front and center with high density east - west trunk routes in the summer and Florida, SoCal and the Deserts in the winter, from both east and west. 

I've yet to see an airline within airline concept such as this truly succeed. 

Too often, their "success" is a function of creative internal cost and revenue allocation, densification, to a certain extent ,juniority, and more recently, $50 or less oil pricing. 

But then again, I've yet to see one that's been set up properly from the getgo. I'm eager to see WJ's take on this. 

Will WJ be the first to get it right? How many people are left at WJ that even truly understand what an LCC is, let alone a supposed ULCC? 

They are easy terms to throw around, but, as countless airlines have discovered, lot harder to actually achieve.

Regardless, in spite of all the brave talk, the appetite to invest in any of the other paper ULCC's that have been trying to raise capital for the last 3-4 years just got infinitely harder. 

I suspect that is the point of the exercise in the first place."

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And here I was wondering if Mark Hill might be involved.

A WS pilot told me today that the theory circulating is they're going to offer to trade the 10 738s 1:1 for additional widebodies to get them on-board. He said individually he doesn't really know what to make of it and only that WS is going to look very different in two years.

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Ashley Nunes is an Atlanta-based researcher in transportation safety, regulatory affairs, and behavioural economics.

Very exciting. That's how WestJet describes its plans to bring ultra low-cost travel to Canada. Its new no-frills service is expected to launch later this year with a fleet of Boeing 737s. WestJet says the new offering "will provide Canadians a pro-competitive, cheap and cheerful flying experience from a company with a proven track record."

Not everyone is smiling though. Some see the move as a race to the bottom. What frills are left to take away from flying, they wonder. Seats? Toilets? Oxygen? Others contend that "no frills" adequately describes the current WestJet experience. One person on social media suggested the airline should – in light of its new venture – be renamed "LessJet." Flying wasn't always like this. Legroom used to be plentiful, alcohol free-flowing, and haute cuisine the norm. These luxuries made getting on an airplane the envy of millions. Few could afford it though. Government kept a tight grip on which airlines could fly, where they could fly and when. This all translated into sky-high prices for passengers.

Deregulation transformed the industry by unleashing the forces of competition, and competition has given passengers what they value most: cheap fares. The result? Ticket prices that have – in real terms – fallen by nearly 50 per cent over the last three decades and millions of Canadians who have reaped the rewards of low-cost connectivity.

What remains unchanged, however, is the high cost of running an airline. Airplanes – like the ones flown by WestJet – run upwards of $100-million each. Add to that figure fuel, labour, maintenance, insurance, depreciation, taxes and fees, and flying becomes exceedingly costly. In fact, the hourly tab for a Boeing 737 runs into the thousands of dollars: hardly a workable prospect if passengers on board are paying rock-bottom fares.

 

The solution? Pack in more passengers and charge them for extras. More passengers mean more revenue. By one estimate, eight extra seats alone can generate more than $1-million in added earnings for an airline. WestJet aircraft currently seat 168 passengers; they can seat up to 189. Should the airline choose to do so, a financial windfall awaits.

Unbundling fares – the practice of charging passengers for everything from food to drinks to newspapers – is also important. These fees help offset financial losses airlines incur by offering cheap tickets. Such à la carte pricing promotes fairness by only charging passengers for the services they use in exchange for a lower ticket price. Case in point: WestJet's luggage fees.

The airline drew public ire in 2014 when it started levelling a $25 fee for luggage. But carrying those bags is a cost (think fuel, labour and insurance). So who does the airline pass along those costs to? The bags' owners alone? Or should the cost also be borne by the one in four WestJet passengers who fly without any luggage.

Most important is the fact that unbundling fares discourages passenger behaviour that drives up operating costs. Ryanair, Europe's largest carrier, charges passengers for turning up at the airport without printing their boarding pass. That may anger some. But unprepared passengers mean longer lines, more delays and extra attention from costly staff: all of which makes offering cheap fares a difficult endeavour.

WestJet's foray into the world of cramped quarters and à la carte pricing is hardly new. Air Canada did it years ago when it launched low-cost subsidiary, Rouge. Passengers complained back then about being packed in like sardines and being "fleeced" for seemingly mundane amenities. Yet Rouge today is a financial success, credited in helping Air Canada's fortunes soar.

Canadians are clearly willing to put up without some creature comforts in exchange for a cheaper fare. That's exactly what WestJet promises to deliver. If passengers want something better, they are, to quote one airline executive, "more than welcome to pay for it."

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WJ adding a ULCC product just makes no sense. Diluted brand. Taking a mostly base level product and degrading it even further. Confusing customers. Logistical inefficiencies.

I subscribe to the notion that the mostly vague corporate announcement was meant to poison the well for the other ULCC players trying to attract capital. The WJ 'threat' should give ULCC investors pause for thought.

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21 minutes ago, rudder said:

 

I subscribe to the notion that the mostly vague corporate announcement was meant to poison the well for the other ULCC players trying to attract capital. The WJ 'threat' should give ULCC investors pause for thought.

And, posted on other forums, the possibility that it is meant to affect employee wage and benefit discussions and/or pro-union sentiments.

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46 minutes ago, Malcolm said:
 

What remains unchanged, however, is the high cost of running an airline. Airplanes – like the ones flown by WestJet – run upwards of $100-million each.

 

If Westjet is paying 100 million each for their aircraft - that's the problem.  Obviously they aren't, the guy who wrote the article is clearly uneducated.

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15 minutes ago, seeker said:

If Westjet is paying 100 million each for their aircraft - that's the problem.  Obviously they aren't, the guy who wrote the article is clearly uneducated.

B737NG lease pricing has remained firm but purchase pricing has been all over the map depending on circumstance. Boeing in particular has offered some deep discounts to either secure a new customer or to block an order from an existing customer for a competing product. 

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Everyone that currently flocks to Westjet for the "cheapest" flight will flock to Less Jet now for the cheapest flights.  there is no brand loyalty unless you offer a premium product like Business Class with the associated program.  Race to the bottom.  

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This feels like a bottom here, the announcement I mean. Obviously you can't identify a trend reversal from one week of events, but given the United, American, Air Canada and other news on this bumping stuff, it sort of feels like the public is reaching the point of maximum pain vis a vis what they are willing to endure for cheap flights? Like, maybe people will start to apply normal value judgements on airfare purchasing decisions, like you get what you pay for, for example. Eh maybe not, it's almost impossible to underestimate the public's tolerance for poor service as long as they get a cheap price. You can always complain to CBC later! And there are other soft benefits to WJ for merely announcing this and leaving it stillborn as those above have pointed out.

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Is it possible that the plan to put 189 seats into the  10 737s is merely a test under the guise of ULCC and then lead to the conversion of all 737s in the WS mainline fleet into the high density?  If passengers accept the tighter seating, then maybe that's the way to go on mainline.

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On 4/25/2017 at 9:23 AM, rudder said:

Diluted brand. Taking a mostly base level product and degrading it even further.

I don't get the "brand" thing when it comes to airlines.

AC lectures us at length about "brand", and I think they're wasting time and money.  People don't feel an emotional connection to the carriers that fly them off to the DR for their cheap all-inclusive resort vacations.  They buy based on price and schedule.  I don't think anybody shopping for travel on Expedia says "This itinerary is $80 per person more expensive than the other, but we're going to buy it because it's AC and we just love that brand!"

What does an airline's "brand" even represent?  Hardly any airline has a consistent product.  On the same carrier you might get a comfortable seat in a clapped-out old cabin, or a cramped, uncomfortable one in a snazzy new cabin.  You might pay for checked baggage or you might not.  You might be fed at no extra cost, or you might not.  You might get free booze and free earphones, or you might pay for both.

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FA@AC, I agree that price is the largest motivator when choosing a flight (if the schedules are the same)  but right close behind that is the onboard service given by the Cabin Crew.  

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