BUSINESS

WestJet: Toronto Island Airport Slots Are In Our Sights As We 'March East,' CEO Says

06/06/2013 12:55 EDT | Updated 08/06/2013 05:12 EDT
TORONTO - After receiving two new Q400 turboprop planes from Bombardier on Thursday, WestJet says it is poised to claim a spot at Toronto's island airport, should one become available.

"Until today we haven't had an aircraft that can go into the airport so we've been an innocent bystander," said WestJet CEO Gregg Saretsky.

"Right now there are no slots available at the Toronto Island airport, but we're watching and we'll be ready when the opportunity presents itself."

The small island airport's main tenant is Porter Airlines, a Toronto-based regional carrier that flies that same family of Bombardier turboprop planes.

Saretsky made his comments at Bombardier Aerospace's Toronto plant, where Bombardier officially handed over the keys to the new aircraft built for WestJet, the first of 20 firm orders and 25 additional options.

WestJet Airlines Ltd. (TSX:WJA) will use the two 78-seat Bombardier plans to launch its new regional Encore service in western Canada on June 24.

Encore will initially add Fort St. John, B.C. to WestJet's network and also fly on routes between Vancouver and Victoria, as well as Calgary to Nanaimo, B.C. Additional routes will be added as it takes delivery of five more planes by the end of the year.

Saretsky said in about 18 to 24 months, the new Q400s will be flying in eastern and central Canada.

"We're on a march east," said Saretsky.

"So we're starting from our headquarters in Calgary and one province at a time, we're going to continue marching east."

Although the company's focus right now is on launching its Encore service, Saretsky wouldn't rule out the possibility of eventually flying larger planes farther distances, or buying up another airline, such as Porter.

"I've been in this industry 28 years," said Saretsky.

"I've learned never to say never. Would we fly one day to London, Paris, Shanghai and Beijing? Absolutely, that's possible. Would we buy another airline? That's possible too. Are our energies focused on either of those things right now? No."

However, he added that WestJet isn't likely to start flying larger aircraft for at least five years.

On Wednesday, the Calgary-based airline said its load factor for May was lower than in the same month last year, as passenger traffic increased less than capacity grew.

WestJet's load factor slipped 0.7 point from a year ago to 78.5 per cent in May, indicating slightly less of its total seating capacity was used. Meanwhile, WestJet's capacity rose by 9.1 per cent or 161 million available seat miles.

But Saretsky said it's no cause for concern, noting that WestJet is also seeing strong demand, with traffic up almost eight per cent in May. Encore's low prices should also create new traffic, he added, as passengers will be able to afford more trips.

"The way you make money is by the difference between your revenue per seat mile and your cost per seat mile," he said.

"This incremental capacity that we're flying comes at much lower cost."

The airline's main rival, Montreal-based Air Canada (TSX:AC.B), has increased frequencies in Western Canada with its own fleet of Bombardier Q400s, operated by Jazz.

It is also set to begin overseas flights next month on its low-cost carrier Rouge.

Note to readers: This is a corrected story. An earlier version said Air Canada had launched a regional service called Air Canada Express in February.

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