New WestJet reservation system paves way for pacts with international carriers

CALGARY — A new reservation system introduced by WestJet Airline’s Ltd. (TSX:WJA) this month marks a key step toward the carrier’s foray into the international arena — and not a moment too soon, according to an airline industry analyst.

CALGARY — A new reservation system introduced by WestJet Airline’s Ltd. (TSX:WJA) this month marks a key step toward the carrier’s foray into the international arena — and not a moment too soon, according to an airline industry analyst.

“It would have been much better if it had come sooner, but it’s better than not at all,” said Rick Erickson, who is based in Calgary.

“Now WestJet can go out and become much more of a globally attractive partner than they had been in the past.”

The Calgary-based airline started using the SabreSonic software on Oct. 17. Its rollout was rocky for the first few days but most of the kinks have since been worked out, said WestJet spokesman Robert Palmer.

“Just the fact that we had to migrate almost one million passenger records from one system to another, and we did that successfully, is amazing,” he said.

“But at the same time we also know that it did mean longer than normal lineups at the airport and longer than normal wait times on the telephone.”

Over the weekend, WestJet customers were emailed an open letter from CEO Sean Durfy, thanking them for their patience and apologizing for the inconvenience.

“This is not the WestJet experience that you have come to know and expect from us and certainly not how we would like our airline to be recognized,” he said.

WestJet needed to upgrade its system for a number of reasons, Palmer said. Firstly, its current software provider was going to stop offering support as of December.

And the update is crucial to the airline’s growth plans — WestJet needed to have a state-of-the-art system to get future code-sharing agreements with U.S. carrier Southwest Airlines and European players like Air France and KLM off the ground.

A code-sharing arrangement essentially means two or more airlines collaborate with one another in such a way that passengers can seamlessly transfer onto one-another’s planes.

The ability for WestJet to expand its reach into international markets would further narrow the competition gap with Canada’s other major airline, Air Canada (TSX:ACE.B).

WestJet had unsuccessfully tried to write its own reservation software in-house, but ended up shelving that endeavour and taking a hefty writedown in early 2007.

“For whatever reason they just couldn’t make the dang thing work,” said Erickson. “It was an expensive little mistake.”

As a result, WestJet was not able to partake in the bump in demand that took place between 2003 and 2007, before the economic crisis hit.

“They missed out on revenue opportunities over those three or four years and of course you simply can’t recoup that,” Erickson said.

“WestJet is starting a little bit later on the game, but better late than never.”

Southwest had put its code-sharing plans with WestJet on the shelf earlier this year, saying it planned to pursue other opportunities first.

“That one has been put back on the front burner for 2010,” Palmer said.

Interlining agreements — which don’t go as far as a full code-share but see airlines collaborating on some activities — are already in place with Air France and KLM.

The startup of the SabreSonic reservation system paves the way for those two agreements to be firmed up. An agreement with British Airways could be next on the horizon.

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