WestJet says it plans to have wide-body planes in the sky by fall 2015
CALGARY - WestJet Airlines Ltd. (TSX:WJA) said Monday it aims to have its own wide-body aircraft in the sky next year, setting the stage for a possible international expansion.
The bigger planes will offer greater range than WestJet's current fleet of Boeing 737s and allow it to compete with Air Canada (TSX:AC.B) on more routes.
The Calgary-based airline said it plans to operate four of wide-body planes initially, with their first flights going between Alberta and Hawaii during the 2015 winter season.
The carrier has been using two Boeing 757-200 planes operated by Thomas Cook for its Alberta-Hawaii winter service, but that agreement ends next spring.
"This is the natural, next-step evolution for WestJet," said CEO Gregg Saretsky.
"It's made possible by our low-cost business model, growing network strength, airline partnerships and our award-winning brand driven by the efforts of our more than 10,000 WestJetters from coast to coast."
The company says it's in the advanced stages of sourcing the aircraft. The wide-body plan has the backing of WestJet's pilot association and board of directors.
In addition to the 737s, WestJet's Encore regional service flies the Bombardier Q400 turboprop.
WestJet began flying between St. John's, N.L., and Dublin last month.
RBC Capital Markets analyst Walter Spracklin said the move paves the way for an expansion into more overseas destinations.
"With still profitable growth available from WestJet's existing operations, we believe some investors might have preferred a focus on the 737 and regional fleet before expanding internationally," he wrote in a note to clients.
"However, we believe management sought to act sooner rather than later given the apparent strength in the international demand environment. Arriving too late might have put WestJet at a sizable disadvantage to competitors that could have blanketed the most profitable routes with newer aircraft."
As WestJet's operations become more complicated, Spracklin said "maintaining a cost advantage, as well as successfully executing, will be tantamount in our view."
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