Guest M. McRae Posted September 9, 2003 Share Posted September 9, 2003 SEPTEMBER 9, 2003 - 08:30 ET WestJet Revenue Passenger Miles Increase 40.1% CALGARY, ALBERTA--WestJet announced its traffic statistics for August 2003 today, featuring a 40.1% increase in revenue passenger miles (RPMs) to 535,406,377, up from 382,285,837 in August 2002. Year to date, RPMs have increased 42.9% to 3,100,538,945 from 2,169,330,496 in the first eight months of 2002. Available seat miles (ASMs) grew 45.0% to 645,643,105 in August of 2003, up from 445,189,405 in August of 2002. Year to date, ASMs have increased 51.0% to 4,361,489,399, up from 2,889,222,929 in the same eight-month period in 2002. WestJet's load factor for August 2003 was 82.9% compared with 85.9% in August of 2002. During the first eight months of 2003, the company's load factor was 71.1% compared with 75.1% during the same period in 2002. WestJet serves the 25 Canadian cities of Victoria, Comox, Vancouver, Abbotsford/Fraser Valley, Prince George, Kelowna, Calgary, Edmonton, Grande Prairie, Fort McMurray, Saskatoon, Regina, Winnipeg, Sudbury, Thunder Bay, London, Ottawa, Hamilton, Toronto, Moncton, Halifax, Windsor, Montreal, Gander and St. John's. WestJet is publicly traded on the Toronto Stock Exchange under the symbol WJA. Link to comment Share on other sites More sharing options...
wrench Posted September 9, 2003 Share Posted September 9, 2003 Good for you. Good for you. There goes that horn again. Link to comment Share on other sites More sharing options...
Maverick Posted September 9, 2003 Share Posted September 9, 2003 Just a little FYI for 'ya, Malcolm is one of the most level headed posters here and actually doesn't work for WestJet. Just thought you'd like to know. Link to comment Share on other sites More sharing options...
Guest M. McRae Posted September 9, 2003 Share Posted September 9, 2003 Wrench...... I just believe in posting good news when it is reported. I guess you have a problem with that????? Maverick: thanks for the kind words..... Malcolm Link to comment Share on other sites More sharing options...
Guest Patrick Bergen Posted September 9, 2003 Share Posted September 9, 2003 Actually quite an interesting article. Westjet's strategy of lengthening out their stage lengths with the new 700's seems aparent. I thinks Westjet will take the slight hit on the load factors as it is trying to make hay while the sun shines with the market share. I wonder if the strategy is to try to start moving out of the shorter haul market and go head to head with AC on the longer ie. YYZ to YVR markets. Link to comment Share on other sites More sharing options...
Guest Banana Wind Posted September 9, 2003 Share Posted September 9, 2003 Not much hay in this scorched earth seat sale market. Link to comment Share on other sites More sharing options...
Guest Patrick Bergen Posted September 9, 2003 Share Posted September 9, 2003 "scorched earth" Clive, is that you? Link to comment Share on other sites More sharing options...
E-HANDLE Posted September 9, 2003 Share Posted September 9, 2003 Well, you can go tomorrow on Zip from Calgary to Abbotsford for $30. If that isn't scorched earth, then what is? Link to comment Share on other sites More sharing options...
Guest Patrick Bergen Posted September 9, 2003 Share Posted September 9, 2003 I agree, Reminds me very much of the startup days of Westjet. What was it, about $35 from YVR to YLW? Link to comment Share on other sites More sharing options...
E-HANDLE Posted September 9, 2003 Share Posted September 9, 2003 Actually, I believe it was $59, for less than half the distance of YYC-YXX. WestJet made money at that. Do you think Zip is making money at $30 walk-up on a 375 mile trip? Link to comment Share on other sites More sharing options...
Guest Patrick Bergen Posted September 9, 2003 Share Posted September 9, 2003 On those particular seats, I would tend to doubt it. My point though is that it is common to have a loss leader or to take a bit of a hit on ie. passenger loads to get into a market. I would imagine Westjet is trying to improve on market share as much as possible right now before competition heats up. Westjet has a pretty simple formula that others are now trying to emulate. They have done a fine job of it to this point. Link to comment Share on other sites More sharing options...
Guest Patrick Bergen Posted September 9, 2003 Share Posted September 9, 2003 Westjets same price YYC to YXX is $37. I guess all of the profit is the $7. Link to comment Share on other sites More sharing options...
E-HANDLE Posted September 9, 2003 Share Posted September 9, 2003 Nope, no profit in that. After Air Canada went to a Quebec court to have the Competition Bureau made powerless and redundant, the choice has become match the fares, or fold up and leave one route after another. Law of the jungle, scorched earth, call it what you want. The intent is the same. Link to comment Share on other sites More sharing options...
Guest M. McRae Posted September 10, 2003 Share Posted September 10, 2003 On Sept 10, Westjet is advertising a Airfare per / Guest $ 80.50 CAD Taxes & Fees / Guest (details) $ 59.71 CAD Subtotal / Guest $ 140.21 CAD Multiplied by 1 Guest $ 140.21 CAD fare from YOW - YHZ OW On the same day AC is selling their seats for $795.59 including taxes and fees. HMMMMMMMMMM (6) ( Link to comment Share on other sites More sharing options...
Guest Patrick Bergen Posted September 10, 2003 Share Posted September 10, 2003 Your post regarding market competition is fair enough. All of the low cost carriers are playing chicken with their fares in different markets. The choice is to regulate the industry as in the past or let market forces play out and see who blinks first. How is it that Air Canada swayed the Quebec courts and made the Competition Bureau powerless? Link to comment Share on other sites More sharing options...
Guest Patrick Bergen Posted September 10, 2003 Share Posted September 10, 2003 Is the earth still safe here? I lost track. Link to comment Share on other sites More sharing options...
Guest M. McRae Posted September 10, 2003 Share Posted September 10, 2003 Perhaps just "middle earth". Link to comment Share on other sites More sharing options...
Guest neo Posted September 10, 2003 Share Posted September 10, 2003 Web fares... truly the devil's playground. Link to comment Share on other sites More sharing options...
E-HANDLE Posted September 10, 2003 Share Posted September 10, 2003 I found two flights on the AC website that show the fare as $64 (AC1174 and AC8928) for tomorrow. At $80.50 one-way, WJ makes money. The cost per ASM from the last quarterly reults were $.11 per mile at a load factor of 69.9%. The last numbers I saw for AC were about $.17 or .18 per ASM, based on a 1200+ average stage length. Based on that, AC will lose money. Link to comment Share on other sites More sharing options...
E-HANDLE Posted September 10, 2003 Share Posted September 10, 2003 Air Canada took the Competition Bureau to court and had the bureau's ability to issue "cease and desist" orders recinded. When WJ complained to the bureau about AC's fares on it's routes from YYZ-YQM, it took 3 years for the Competition Tribunal to decide that AC had been selling below cost. Now they have to decide what harm was done. Probabley another 3 years. If AC loses, they will appeal. More years. If an airline with enough financial clout wants to drive out a competitor, whether it's WJ or AC, that competitor will be long gone by the time the case gets heard. Link to comment Share on other sites More sharing options...
Guest Patrick Bergen Posted September 10, 2003 Share Posted September 10, 2003 I would assume then that you would like fares regulated. I respectfully suggest that low fares by Air Canada, Jets go, Zip or any other carrier will continue. I quite frankly think it is ludicruous to keep suggesting that Air Canada has or is damaging Westjet given the financial shape of both companies or for that matter discount carriers worldwide versus the other carriers. Westjet is just beginning a war of fares that begun when discount carriers started in Canada. No judgement, that is just the way it is. Link to comment Share on other sites More sharing options...
Guest Patrick Bergen Posted September 10, 2003 Share Posted September 10, 2003 If AC is successful in restructuring and brings its ASM down to close to Westjets, does that then make it a reasonable fare? Link to comment Share on other sites More sharing options...
E-HANDLE Posted September 10, 2003 Share Posted September 10, 2003 I have no desire to see fares regulated. I would like to see an end to selling below cost in an attempt to drive the other guy out of business. But that isn't going to happen. I can assure you that it was not WJ that instigated the $30 fares between YYC-YXX, or the even more ridiculous $30 fare that Zip is charging from Edmonton to Victoria. What Milton hopes to accomplish with these fares is beyond me. I don't agree that the sort of low fares we are seing today will continue. As AC contemplates exiting CCAA they will have little choice, IMO, but to charge what is neccessary to make a profit. Link to comment Share on other sites More sharing options...
E-HANDLE Posted September 10, 2003 Share Posted September 10, 2003 If AC can make money at $.10/mile, then it would be reasonable for them to charge that fare. The best information I have would lead me to believe that AC's cost is in the $.20/mile range over that route. If Milton can cut AC's cost in half, then he can break even. Link to comment Share on other sites More sharing options...
Guest Patrick Bergen Posted September 10, 2003 Share Posted September 10, 2003 If you look at Canjet's everday low fares, it is $64 between YUL and YHZ. I completely agree with you that the fares should be at a rate that makes money. I also agree that we should avoid re-regulation. I reiterate that these types of fares by all carriers are going to happen for awhile to get a footing into the markets. You saw this in the startup years at Westjet as you came in at a low fare into a route (albeit one you could make a profit at) and gradually increased frequencies as Air Canada reduced frequencies and lost out. The only difference between then and now is the degree of fare reduction. You will notice that fares on average were quite a bit less in the West than in the East for the last few years until the emergence of low cost carriers in the East. Link to comment Share on other sites More sharing options...
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