WestJet (A Low Cost Carrier) Is Launching A New Ultra Low Cost Carrier

They've recently had some significant competition from NewLeaf. I think that is spurring this.

Point of information - 190 seats on a 737-800 is not possible. The type certificate is only for a maximum of 189 seats.

It's possible WJ is looking at this being their core business model moving forward, if successful.

As Heather mentioned newleaf is the main source of ULCC competition and there is another ULCC carrier that has been planning to launch out of Vancouver called Jetlines. So reactive to newleaf (although WestJet already has by launching flights to Mesa Arizona which pushed out newleaf before they even started their Mesa routes) and proactive to Jetlines

Why are they doing this? You answered it here: They’ll hire employees under separate contracts with a lower pay scale

Is charging for bathroom access essentially illegal?

Westjet is NOT a low cost carrier. It may had been founded as one, but today Westjet is a regular carrier just like Air Canada with fares mostly identical to Air Canada.

This is a cannon aimed directly at NewLeaf and other planned startup ULCCs in Canada. There will a couple token standalone routes, then everything else will be in direct competition with competitors. It will remain in existence as long as there is a threat of new competitors stepping up.

Echino is right. Westjet is a low service airline at a standard price point. They started low cost, but now they match Air Canada's prices as a duopoly on all major routes, and have for over a decade. Their main competitive advantage in their current market is, "we're not Air Canada", which is losing steam in the face of Newleaf and the potential startup of Jetlines.

I suspect they're preparing to join an alliance. They'll add a more 'real' Premium cabin to mainline Westjet, so they can function properly in Oneworld or SkyTeam (my money's on OneWorld), but their junior line will have recliners up front (Premium Economy for international flights, "business" for domestic, as Rouge does).

Canada has only one carrier in an alliance: Air Canada (StarAlliance). Westjet already codeshares with numerous partners but it's always been nobbled by the absence of a Premium cabin. Westjet has always been at a disadvantage in that it doesn't get the travellers that play the Points and Miles game, doesn't get premium business travellers, doesn't get Alliance benefits. Their route network and schedule are robust, so they have a lot to offer an Alliance.

Newleaf and Jetlines. Will see how it plays out. People in Canada tend to have a high regard for WS service (think JetBlue) so having their brand associated with something like Spirit will be interesting.

i don't see the value of WS anymore. When they're charging the same fares as AC, the consumer is coughing up just as much dough without any benefits of frequent schedules or an alliance.

Can we bring our own oxygen so we can breathe on the plane or we have to buy from them before they close the doors?

AC Rouge was the best marketing scheme I've ever witnessed and I assume that now WS wants a piece of that too.
AC created Rouge by converting mostly old aircraft (not all) to higher density without J, stepping down the service, and converting almost all leisure destinations to this new brand. It's a low-cost carrier, except the cost is the same as it was when the routes were legacy AC! So basically they invested some money in the conversion and now they generate more revenue per aircraft (more seats) while maintaining similar expenses. And we suckers keep paying the premium on this sub-par product.

Plenty of revenue opportunities:

1) A booking fee
2) A payment type fee (credit card, debit card, paypal)
3) A printing-your-boarding-pass-at-the-airport fee
4) A "personal assistance" fee (e.g. a FA helping you label your bag)
5) A seat selection fee
6) An extra legroom fee
7) A carry-on/overhead bin fee
8) A underseat storage fee
9) An on-board bathroom fee
10) Beverages for sale
11) Snacks for sale

Great quick analysis Lucky. Spot on. My guess is that Westjet may also transform into more of a traditional carrier as well.

I wonder if Westjet is going to capture more of a premium market and perhaps unveil more business class like seating.

Lucky, I would love a review of Westjet now that you can book them through Delta miles.

Chances are we won't see business class seating. The new seats they are putting on the 737MAX and on their existing fleet are already set in place and they state the costs would be too high to go to a true business class seat. See this FlyerTalk post for details http://www.flyertalk.com/forum/westjet-westjet-rewards/1831169-ws-adding-seats-existing-fleet.html

I feel like buying a 737 with 189 seats and bolting a folding chair to the floor just to see the look on Sean M.'s face.

My hope is the governments start banning 'you' fees- aka airlines charging us for -their- problems. I'm all for unbundling, but we gotta talk about some of these-

1. Booking fees / Payment Fees -
Booking / Payment are kind of essential to what an airline does. Charging me a fee to take my money and do business with me makes zero sense. That's a -you- fee.

2. Water Fees -
As long as there's a TSA Liquid ban, at least drinkable water should be required to be provided free onboard. I can live without a coke, but it's not cost effective to have potable water tanks, that's a -you- fee for bringing bottles of water onboard.

3. Print-your-ticket fees-
Spirit charges $10.00 , Frontier charges $5.00 . Unless they're printing it with unicorn blood, the correct cost should be closer to 50 cents, which is still 5 times what Kinko's charges. Again, that's a -you- fee.

And the WS pilots just announced there will be a vote to unionize.

The other way low-cost airlines have cut costs is to fly to "regional" airports. Southwest used to fly into MacArthur (Islip), not JFK or LGA; SkyBus flew into Stewart of the standard NY airports, and into Gary, Indiana instead of ORD or Midway.

This is the same technique used by RyanAir. They fly flights out of "Paris" that don't use CDG or ORY, but use Beauvais-Tillé instead.

Matter of time before WS realised their 174 seat 73H couldnt compete with TS or WG 189 seat aircraft. 189 is type certificate max for NGs.
Startling coincidence that their "main line" pilots just applied to join ALPA. Can the F/A be far behind?

The westjet pilot's association filed union cards for ratification with the CIRB today. This announcement was simply an effort to bust up the union organization efforts or, failing that, then to shift existing aircraft to a new operating certificate and hire new staff at ever lower wages. Business analysts should really investigate this aspect of the announcement.

The westjet pilot's association filed union cards for ratification with the CIRB today. This announcement was simply an effort to bust up the union organization efforts or, failing that, then to shift existing aircraft to a new operating certificate and hire new staff at ever lower wages. Business analysts should really investigate this aspect of the announcement.

I won't fly on an airline that charges to use the rest room. First of all it discriminates against those with small bladders and drinkers, whom are paying too much for alcohol anyway. Ryan air, as well as, Spirit has ruined people's holidays by being cheap. Ryan air has actually put lives in danger by not filling up with enough petrol. Scared my young daughter to death over Spain.

@Lucky - Norwegian announced their long haul direct flights from London Gatwick to Singapore changi for only S$199! https://www.bloomberg.com/news/articles/2017-04-20/norwegian-air-takes-on-asian-rivals-with-230-fares-to-singapore

Ed,
Nice list, but Ryanair has it focused down even further.
They sell their own lottery tickets and perfume and "duty free" junk...and push the stuff relentlessly the whole time you are one the plane. Not just one 'opportunity,' but four lengthy hardsells per 90 minute flight.
"We have a winner here in Row 12, a twenty-five pound voucher for any Ryanair flight!" Oh, you've won before! Wonderful! What a lucky lady."
They take meal orders as the plane taxis out and "serve" the meal to you in a microwave heated box just by passing it over the crowd with a plastic fork and spoon. It was too hot to even hold much less eat. Oh well, we'll just take that for you; order something different next time.
I wouldn't worry about being charged to use the toilet. There was so much commerce going on with so many attendants (sellers) there was not a hope in hell of getting to any toilet or even having a line form.
Btw, Ryanair outsources locally for people to look at your boarding pass. They know nothing about anything; just push you onto the plane and that not very well. My last trip on Ryanair, after one ground person made us all line up by seat number, someone else came along and made the brilliant decision to help one person on board (he did need a lot of help) in the front and have the other 188 people enter from the rear. What chaos.
Oh there are a lot of opportunities to make money by charging less and to make flying fun in the process.

My fear, being a huge WS fan and user is it will eventually become Rouge all over again. No cheaper for a cramped seat and poor service. Then they will run all the sun flights (LAX, LAS, PHX etc) from their YYC hub through the crap airline and no longer have the choice to fly the "regular" WS. Bummer

I'm only flying if they'll bring WS' Kargo Kids along.

Nobody has mentioned Air Transat. That's the real competition for Rouge, though AC has now "Rouged" a bunch of not-really leisure destinations e.g. YYZ-SAN. So yes, NewLeaf and Jetlines are part of it, but their capacity is tiny. Competing with TS is the real driver behind both AC Rouge and to a great extent this move by WS. Pure leisure airlines like TS are not typically on the radar of the miles-and-points set - they don't offer any, let alone showers in the sky 😉 - but TS represent a ton of capacity transatlantic in the summer and southbound in the winter.

If hotels can create unique brands why can't airlines?

@ Stuart -- Well many airlines have tried to create unique brands/low cost carriers. But the reason it doesn't make as much sense is because airlines operate the planes themselves, and own/lease them directly. Meanwhile the hotel business is more about franchising/management, so their goals are different.

WestJet is a limited-service airline, not low-cost. They try to compete against Air Canada's economy class (though I greatly prefer AC).

People regularly call it low-cost, but the only difference is they do not have business class.

You are looking for reasons to launch an ULCC in Canada? Compare the price of the short hops between YUL and YYZ and prices offered by European (true) LCC for similar flights! There is room to lower the prices and generate new demand!! And as mentionnes above AC Rouge is mainly competing with TS (transatlantic and winter south routes). TS has very few flights between Canadian cities. There is no real LCC for domestic flying!

Three points:

1) Before Rouge there was Tango (was an airline within an airline, now a fare class);
2) No one seems to have worked out that you could charge for OLCI;
3) Low cost doesn't necessarily mean low price.

Friends don't let friends fly Wetjet.

WestJet is more of a traditional airline than a low cost carrier. They will actually debut a lie flat business class product on their 787-9 flights that will start in 2019-2020!