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A new breed of traveller

Nearly a week after launching ticket sales for its ultra-low-cost carrier Swoop, WestJet Airlines Ltd. says it hasn't lost business at its main airline, suggesting it has found a new market of infrequent flyers.

"Clearly what we're seeing is that Canadians like low fares," Ed Sims, executive vice-president, commercial, told a conference call with financial analysts Tuesday to discuss the airline's fourth-quarter results.

"It's been six days since we went on sale. We're tracking Swoop's growth on an hourly basis and we're seeing no signs of cannibalization (of WestJet ticket sales)."

WestJet matched analyst expectations by posting earnings of $48.5 million or 42 cents per diluted share for the last three months of 2017, down from a profit of $55.2 million or 47 cents per diluted share a year earlier, as costs rose, particularly for fuel.

Revenue totalled nearly $1.12 billion, up from nearly $1.02 billion in the fourth quarter of 2016.

Last week, WestJet announced Swoop will launch on June 20 with flights between Abbotsford and Hamilton. It will add flights involving Edmonton and Winnipeg by the end of July for a total of 45 weekly flights.

Ticket prices are about 40 per cent cheaper than comparable flights, WestJet says, but its seats are more densely packed and there are fees for options like carry-on luggage, food and extra leg room. It's expected to compete with Flair Airlines and Canada Jetlines.

"Subject to regulatory approval, Swoop will expand outside of Canada later this year and could grow to a fleet of as many as 30 to 40 aircraft," CEO Gregg Saretsky said on the call on Tuesday.

He said Swoop will start with three aircraft in June, have six by September and will grow to 10 by the spring next year.

Pilot recruitment is progressing well, Saretsky said, adding his preference is to allow pilots from WestJet and WestJet Encore to seek promotions with the new airline.

He said WestJet is negotiating with the Air Line Pilots Association, International, the union that won the right to represent WestJet pilots last year, to maintain one seniority list for all of its pilots, thus allowing pilots to move from one brand to another without losing pay and seniority rights. Under the current contract, pilots can take a leave of absence to try flying for Swoop and still return to their old jobs, he said.



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