WestJet offering more seat sales in “intensely competitive” environment

WestJet Airlines Inc. (TSX:WJA) is offering a lot more seat sales to travellers than it has in the past as recession-weary consumers scrutinize every dollar they spend, says the chief executive of the Calgary-based carrier.

Array

CALGARY — WestJet Airlines Inc. (TSX:WJA) is offering a lot more seat sales to travellers than it has in the past as recession-weary consumers scrutinize every dollar they spend, says the chief executive of the Calgary-based carrier.

“We have felt over this recession how discretionary the buying of an airline ticket really is,” Sean Durfy told analysts on a conference call to discuss his company’s third-quarter results.

WestJet and chief rival, Air Canada (TSX:AC.B), have been vying for customers by aggressively pricing their fares, a factor Durfy said had led his company to post lower third-quarter revenues.

“It is intensely competitive in this marketplace,” he said.

And it appears the recession is playing a much larger role in consumers’ spending decisions than the H1N1 flu scare.

The virus first surfaced in Mexico in the spring, scaring travellers away from holidays in that region for a time.

However, that does not appear to be the case anymore, Durfy said.

“Because we did have an issue with H1N1 in Mexico a while back, you would think there would be some skepticism from the travelling public but . . . we’re not seeing it,” he said.

“I can’t associate any booking declines with the H1N1 scare.”

On Tuesday, WestJet added a twice-weekly flight to Ixtapa/Zihuatanejo, Mexico, bringing the number of cities it now travels to in that country to six. The airline also recently introduced several other routes to various Caribbean holiday destinations.

Earlier Wednesday, WestJet reported profits of $31.4 million, or 24 cents per share, down from $57.9 million or 45 cents in last year’s third quarter. Revenue fell to $600.6 million from $718.4 million.

Analysts polled by Thomson Reuters were, on average, expecting earnings per share of 27 cents and revenues of $603 million.

Last month, WestJet overhauled its reservation system, which in its initial few days caused headaches for some travellers. The airline’s website crashed, and its call centre was overwhelmed with an onslaught of callers.

“That won’t happen again. These are one-time events,” said Durfy.

There are still a few more wrinkles to iron out, like how to handle customers who booked with WestJet before the new system came into effect, but scheduled to fly afterwards.

Migrating the entries from the old system to the new one was no problem, but making changes to those flights has been tricky.

WestJet chose to install a new reservation system, called SabreSonic, to pave the way for code-share agreements with a number of other airlines worldwide.

Code sharing means a traveller can transfer from one airline to another seamlessly, which essentially gives WestJet access to markets around the world.

WestJet is working with Texas-based Southwest Airlines on bringing their code-share agreement into effect, though the timing is uncertain, said executive vice-president Hugh Dunleavy.

Interline pacts, which lay the ground work for code-shares, with Air France and Dutch carrier KLM are working out well so far. Next month, WestJet plans to increase the number of Canadian cities that can connect to those European airlines.

“Look forward to 2010 with three or four additional announcements in terms of partnerships being put into production at WestJet,” said Dunleavy, without disclosing which other airlines are involved.

The airline also reported separately that its load factor had improved last month compared with October 2008 when the magnitude of the U.S.-led global recession began to be felt by Canadian consumers.

For October, WestJet’s load factor increased to 77.3 per cent, up 1.5 percentage points from the year-earlier period.

For the July-September quarter, WestJet’s load factor was down 1.7 points at 79.7 per cent from 81.4 per cent in 2008.

Shares in the airline were 14 cents higher at $11.23 in afternoon trading on the Toronto Stock Exchange.

Just Posted

Celebrating 4-20 in Red Deer

For years, 4-20 was a time to protest for the legalization of… Continue reading

Optimism remains for Red Deer hospital expansion

Red Deer’s incoming UCP MLAs both have been strong supporters of expansion

Sport of axe throwing growing in Red Deer

True North Axe Throwing wants sport to be ‘Canadian version of darts’

RDC cancels championship-winning golf program due to tight finances

Short season, small number of student golfers were also considerations

WATCH: An ‘Eggstemely Fun Easter’ at Bower Place in Red Deer

Bower Place mall made sure Red Deer families were able to have… Continue reading

Dozens hurt in collapse of deck during wedding celebration in Langley, B.C.

LANGLEY, B.C. — Police say dozens of people were injured, some critically,… Continue reading

No winning ticket for Friday night’s $25 million Lotto Max jackpot

TORONTO — No winning ticket was sold for the $25.5 million jackpot… Continue reading

Uber driver charged in two sexual assault investigations: Toronto police

Toronto police say an Uber driver is facing sexual assault charges in… Continue reading

PEI Green party candidate Josh Underhay and son killed in canoeing accident

CHARLOTTETOWN — With only a few days before voters were to go… Continue reading

Egyptians vote on changes that would extend el-Sissi’s rule

CAIRO — Egyptians cast their ballots Saturday on the first of three… Continue reading

Ex-Marine arrested in North Korea embassy attack in Madrid

WASHINGTON — A man suspected of involvement in a mysterious dissident group’s… Continue reading

New bout of heavy fighting in Yemen kills dozens

SANAA, Yemen — Yemeni officials say heavy fighting in Yemen’s southern Dhale… Continue reading

Most Read