Gregg Saretsky On ‘The WestJet Effect’ & Methodical Growth

Open Jaw
by Nina Slawek

Gregg Saretsky sporting custom WS tartan at YHZ inaugural

WS Tartan Tail arriving at GLA

As Open Jaw travelled with WestJet on its inaugural YYZ-GLA flight, there was plenty of time to chat with CEO Gregg Saretsky on the flight path that has taken the airline a long way from its genesis as a single aircraft type, domestic low-cost carrier.

“We're stretching our wings beyond anybody's imagination in 1996 and even 5 years ago," Saretsky said. “But we are being true to our foundation of providing low cost transportation. So these flights to Europe (DUB & GLA) are so successful largely because we offer tremendous value to the traveller. Low fares. Great friendly WS service. So we haven't really strayed from our model."

Saretsky says that even as WS evolves its product with the addition of larger aircraft and a Plus product with empty middle seats in the 1st 3 rows, it is remaining true to its roots.

“It is not business class. We are selling it as premium economy. This same product in Europe is sold as business class. If you fly BA or KLM without the middle seat it's a C class fare. But were' doing that on our economy fare which we think will also revolutionize business travel in Canada," Saretsky said.

Is WS creeping towards creating a full-fledged business class? Saretsky doesn't rule it out, but maintains that WS will always keep a focus on lower fares and value.

“I think you've heard me say never say never. There is an unmet need today in the Canadian business market for a business product at a fare that companies can afford. Our competitor has very high business fares in Canada and you're either sitting in business class or you're sitting behind their curtain – so, in our case, there is no business class. It is premium economy, so the whole curtain thing is not there."

Saretsky says that despite troubles in the oil patch, high capacity in the Sun market and reports from retailers that the industry as a whole has been soft of late, WS is still achieving solid performance.

“We are still turning out record results. Record loads. Growing our capacity this year by 4.5% to 5.5% and demand is strong. We are obviously seeing some softness in Alberta and in the oil patch. But some of the changes in the marketplace include the fact that these oil execs used to fly charter flights from east to west and that traffic is now on scheduled service. My guess is WS has gotten some of that boost. We are not feeling the full effect of what's going on in the oil patch."

Saretsky characterizes as “fantastic," the growth and success of regional carrier Encore.

“They reached their national footprint in April with service to YFC. It's been very well received there. That was a market where there was a monopoly and fares were very high. We've changed that dynamic and the marketplace has responded. We call it the Westjet effect, where you drop fares by 40% to 50% and traffic grows by 50% to 70%. People are making 2 trips for the same price they paid for 1 previously."

As of 15JUL, Encore will expand further into Atlantic Canada and Saretsky says the service will be welcomed.

“There are a lot of business people that travel between YHZ & YQY and that 45 min. flight with no competition is regularly $800+. So we are coming in all inclusive with taxes in at $137. People are over the moon."

Saretsky agrees that the winter Sun market remains plagued by excess capacity.

“We've seen one victim of that - CanJet Vacations. Very short stay in the market. Market forces always prevail. Transat is also struggling. We had a good season but not as good as in the past. Lots of capacity – a lot of that from rouge with wide-bodies in markets that only previously had narrow-bodies – so there are a lot of seats chasing a market which is pretty mature."

The launch of wide-bodies on domestic routes like YYZ-YYC and on flights to Hawaii is another step forward for WS, Saretsky told Open Jaw.

“These planes have ovens! So for almost the 1 st time in our 20 yr. history, we can serve hot food. And in the Plus section of 24 seats - these are Qantas business class seats – we can offer more leg room, leg rests and complimentary hot meal service. So it's quite a big change for us."

Saretsky says it won't be until September or October when an announcement is made on wide-body plans for 2016. There will be ocean crossings involved for sure, with the expansion of trans-Atlantic routes the most likely scenario.

“It's all baby steps," says Saretsky. “The service to DUB was a huge success. With the non-stop service and the right fares, we were full all last summer. And we learned how to sell in Euros. And this year we had to make our website available to sell in pounds Sterling, which of course takes care of all of the rest of Britain if that's something we might want to do down the road.

As WS continues its steady climb to higher altitudes, Saretsky continues to believe that slow and steady wins the race.

“We are going at this very methodically, very carefully."

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