I wonder if those new routes include the northern routes to Yellowknife and Whitehorse that was being talked about earlier in the month?RVR6000 wrote:Old Ladies and New Routes to Spur WestJet Profit
Mon Jun 11, 2007 11:04 PM BST
CALGARY, Alberta (Reuters) - Charging "little old ladies" to carry excess baggage on its planes and adding new routes are some of the ways WestJet Airlines Ltd. (WJA.TO: Quote, Profile , Research) plans to boost its profit, the company's president said on Monday.
Westjet to be a global player by 2015
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There is no substitute for BIG JUGS!!
Charging for ancilliary services is doubtless a great way to build extra revenue, and Ryanair has taken this to the level where they make as much, if not more, from 'ancilliary revenue' than from the fares. GBP5 fares don't pay the cost to fly the passenger, and with headline grabbing fares like this, filling the seats is easy.
But then you have the charge to check a bag/more than one bag - the cost of which can be 10x the cost of the actual fare! Then add on paying for water inflight, paying for wheelchair or special services... Then there's the out of town airports, some of which are formerly abandoned air force bases. How do you get from said airport to the city you actually thought you were flying too? Oh - that's right. There's no public transit, no rental cars, you are out in the middle of nowhere, sometimes 50km or more from the 'city', so you have to take the Ryanair bus - again, the cost of the ground transport is several times the cost of the airfare!
Remove seat pockets, remove tray tables, put advertising on the seat backs and overhead bins...
WestJet may see this as the future, but it'd turn me off pretty quick.
Southwest has stayed consistently profitable, but it has also stayed true to it's original plan. One aircraft, and one only - the 737 - keeps maintenance costs and parts inventory down, and allows for great deals on aircraft options and purchasing with the volume for one airframe type.
Second - domestic service, no international/longhaul. I could maybe see Southwest expanding to Mexico or select Caribbean... but again, with same aircraft type and same cost structure.
Finally, Southwest offers a comfortable ride, free soft drinks, light snacks, and an uncomplicated frequent flyer rewards programme. No nickel and diming, or having to pay extra for checking a bag or requesting special assistance. All in all, a solid product, with a loyal and satisfied customer base.
WestJet, if it's looking to grow to international such as UK/Europe/Asia/South America (which it would have to to be in top 15 off all airlines worldwide), would no longer be in that tried and true Southwest model.
But then you have the charge to check a bag/more than one bag - the cost of which can be 10x the cost of the actual fare! Then add on paying for water inflight, paying for wheelchair or special services... Then there's the out of town airports, some of which are formerly abandoned air force bases. How do you get from said airport to the city you actually thought you were flying too? Oh - that's right. There's no public transit, no rental cars, you are out in the middle of nowhere, sometimes 50km or more from the 'city', so you have to take the Ryanair bus - again, the cost of the ground transport is several times the cost of the airfare!
Remove seat pockets, remove tray tables, put advertising on the seat backs and overhead bins...
WestJet may see this as the future, but it'd turn me off pretty quick.
Southwest has stayed consistently profitable, but it has also stayed true to it's original plan. One aircraft, and one only - the 737 - keeps maintenance costs and parts inventory down, and allows for great deals on aircraft options and purchasing with the volume for one airframe type.
Second - domestic service, no international/longhaul. I could maybe see Southwest expanding to Mexico or select Caribbean... but again, with same aircraft type and same cost structure.
Finally, Southwest offers a comfortable ride, free soft drinks, light snacks, and an uncomplicated frequent flyer rewards programme. No nickel and diming, or having to pay extra for checking a bag or requesting special assistance. All in all, a solid product, with a loyal and satisfied customer base.
WestJet, if it's looking to grow to international such as UK/Europe/Asia/South America (which it would have to to be in top 15 off all airlines worldwide), would no longer be in that tried and true Southwest model.
The southwest model was departed from some time ago by flying charters, flying to the States and into Nassau.
Westjet has also operated two types in the past (according to Tim Morgan) as the -200 and the -700 are nothing alike. The 200 required a different type rating and a different set of parts. The only thing that forced them into early retirement was the fuel price and the loss of RVSM, which increased the fuelburn further.
So two types is not out of the question at WS.
Westjet has also operated two types in the past (according to Tim Morgan) as the -200 and the -700 are nothing alike. The 200 required a different type rating and a different set of parts. The only thing that forced them into early retirement was the fuel price and the loss of RVSM, which increased the fuelburn further.
So two types is not out of the question at WS.
The single type argument evaporates after about a dozen aircraft in my opinion- and obviously Westjet is well past that by now. There is very little incremental savings to be had by adding, say the 13th, 14th...44th, or 56th aircraft. By the time you've got a dozen of 'em, your stores department, training department, dispatch, flight support, ground equipment etc. etc. etc. is pretty much operating as efficiently as it can; adding more aircraft just means scaling up the operation, not necessarily changing the way you do anything.
With that in mind, my opinion is that dogmatic adherence to the "one type fleet" plan is a hindrance more than a help when you go trying to fit your fleet type into a particular route that may be better served by something different. Just because you're a hyper-efficient 737 operator doesn't mean that you'll be able to turn a profit with your type on (say) YEG-YXS or YHZ-LHR. WJ is now at the point where fitting the proper type into their expansion plans makes more sense that jamming a 737 into every square, round, and triangular hole in the market that they identify.
With that in mind, my opinion is that dogmatic adherence to the "one type fleet" plan is a hindrance more than a help when you go trying to fit your fleet type into a particular route that may be better served by something different. Just because you're a hyper-efficient 737 operator doesn't mean that you'll be able to turn a profit with your type on (say) YEG-YXS or YHZ-LHR. WJ is now at the point where fitting the proper type into their expansion plans makes more sense that jamming a 737 into every square, round, and triangular hole in the market that they identify.
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gonefishin'
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Our vision is to be one of the five most successful international airlines in the world by 2016. By successful we mean the areas of revenue and growth, margins and cost, guest experience, and people and culture.
Our revenue continues to grow at a fast pace, our margins lead all of the airlines in North America, our costs are third behind JetBlue and Southwest (Southwest has a significant fuel hedge) and are dropping and will continue to drop, we rank high in OTP, lost baggage ratio and customer service satisfaction, and our culture has consistantly been recognized by various organizations, surveys, and awards.
Our executive team is smart enough to know what works and what doesn't. Some of you are getting ahead of yourselves by suggesting that by doing something different, WS isn't following "the model". There is no "model"; different strokes for different folks. The people running this airline aren't stupid and they'll do what's best to reach the goals they have planned for the airline. It's not like they've set these goals without a plan on how to get there.
Our revenue continues to grow at a fast pace, our margins lead all of the airlines in North America, our costs are third behind JetBlue and Southwest (Southwest has a significant fuel hedge) and are dropping and will continue to drop, we rank high in OTP, lost baggage ratio and customer service satisfaction, and our culture has consistantly been recognized by various organizations, surveys, and awards.
Our executive team is smart enough to know what works and what doesn't. Some of you are getting ahead of yourselves by suggesting that by doing something different, WS isn't following "the model". There is no "model"; different strokes for different folks. The people running this airline aren't stupid and they'll do what's best to reach the goals they have planned for the airline. It's not like they've set these goals without a plan on how to get there.
The incredible fuel hedge it has is the reason for that. They were paying $25/bbl last year while the rest of the world was paying upwards of $70/bbl. That's one hell of an advantage. I would argue that an airline has to evolve to survive. Westjet said it would never fly east of YYZ, never fly transcon, never add "frills", etc., etc. and look where we are now. Evolve or die.Southwest has stayed consistently profitable, but it has also stayed true to it's original plan. One aircraft, and one only - the 737 - keeps maintenance costs and parts inventory down, and allows for great deals on aircraft options and purchasing with the volume for one airframe type.
Westjet isn't looking to be Southwest. Quite the opposite actually.WestJet, if it's looking to grow to international such as UK/Europe/Asia/South America (which it would have to to be in top 15 off all airlines worldwide), would no longer be in that tried and true Southwest model.
That was a pile of BS from two brothers. The 737's don't need C-Checks; they do what's called phase checks which is basically a c-check over a long period of time. The structure of WS's leases are such that in the first few years interest rates are high while maintenance costs are low and in the last few years interest rates are low while maintenance costs are high. So instead of watching the cost of the aircraft spike over the period of its life/lease/whatever, it stays constant from day one.Wasn't that the final word in all that hubbub about how they accounted for D-checks a while ago? I might be mistaken but there might've been something in their lease structure for aircraft that fit that profile too. Basically it boils down to the accounting methods they use making profits appear higher during growth periods, so if Westjet stops growing their "magical success" could evaporate quite quickly.
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gonefishin'
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Bubbaganoosh
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