CALGARY — WestJet Airlines Ltd. is lagging behind short-haul carrier Porter Airlines when it comes to establishing its brand in Eastern Canada, the chief executive of the discount carrier said Wednesday.
“We do suffer in Eastern Canada from a low top-of-mind awareness,” Gregg Saretsky told a transportation conference in New York.
“I’m almost embarrassed to say that in the Toronto market we have a lower brand awareness than does Porter.”
Porter flies several planes a day between Toronto, Ottawa and Montreal, a crucial market for the business clientele that Calgary-based WestJet (TSX:WJA) has been working hard to attract.
Air Canada (TSX:AC.B) also has a strong presence on those routes, the so-called “eastern triangle.”
Robert Kokonis, president of consulting firm AirTrav Inc., agrees WestJet needs to catch up to Porter’s aggressive advertising efforts, but should also re-evaluate its single-fleet strategy.
Porter has 70-seat Bombardier Q400 turboprop planes in its fleet. Their small size allows Porter to fly every half-hour during peak periods on high-traffic routes like Toronto-Montreal.
“The business market is driven by having the right number of frequencies in the market,” said Kokonis.
WestJet flies Boeing 737s, which have twice as many seats as Porter’s planes, making it hard to fly as frequently at a reasonable cost.
“So far WestJet has been loathe to move beyond that aspect of the pure play, low-cost carrier model,” said Kokonis.
WestJet says having one type of plane in its fleet dramatically cuts costs on everything from maintenance to parts to training.
It expects to have 91 aircraft at the end of this year, and aims to grow that number to as much as 135 by 2016.
That should allow WestJet to fly more frequently in a bid to attract more business customers.
Saretsky figures WestJet currently has 18 to 20 per cent of the business travel market, though it’s hard to pinpoint the exact breakdown of business and leisure travellers.
“The opportunity for us is to clearly do a better job of penetrating the business travel segment,” he said.
A few recent initiatives — the introduction of a frequent-flyer rewards program and an RBC-branded Mastercard earlier this spring — have been doing well so far.
“We’re looking at capturing those folks who book at the last minute, which is typically more higher-yielding guests,” Saretsky said.
“I’m happy to report that the early returns on our new frequent flyer program are very, very encouraging. They’re tracking well ahead of our expectations.”