Airfares falling in west as WestJet Encore launches regional service in June
Gregg Saretsky, president and CEO of Westjet, addresses the company's annual meeting in Calgary, Tuesday, May 1, 2012. (Jeff McIntosh / THE CANADIAN PRESS)
Published Monday, February 11, 2013 8:39AM PST
Last Updated Monday, February 11, 2013 1:58PM PST
WestJet Airlines' new Encore regional service will take flight next June at its base in Western Canada as the carrier ignites new competition with rival Air Canada in a bid designed to drive down airfares.
The airline will begin with daily flights between Fort St. John, B.C., and Vancouver, and Fort St. John and Calgary with the first two 78-seat Q400 turboprops it receives. Encore will also serve Vancouver to Victoria and Nanaimo, B.C.. to Calgary.
Additional routes will be added as it takes delivery of five more planes by the end of the year.
WestJet (TSX:WJA) says lower-cost Encore will reduce fares by up to 50 per cent. The introductory fare on the Fort St. John routes are $109 plus taxes, or up to about $181.
Meanwhile, Air Canada's lowest one-way fares including taxes are currently at $439, falling to about $226 in July, when Encore enters the market.
Over the next six years, WestJet has firm orders for 20 Q400s and options for 25 more planes.
The head of the new airline called the launch a "historic moment."
"As Canada's low-fare leader, we look forward to introducing our award-winning guest experience to Canadians in smaller communities while connecting to our network of 85 destinations in 18 countries," said Ferio Pugliese, who is also an executive vice-president of WestJet.
WestJet said Fort St. John, the so-called Energetic City, creates a strong foundation for the new service as a centre for northeastern B.C.'s diverse economic base of oil, natural gas, forestry and agriculture.
Mayor Lori Ackerman said the municipality welcomes the additional air travel choices and connections to strategic cities in Western Canada that will be opened up with WestJet Encore.
"This announcement is another key indication of the vibrant and healthy investment environment in Fort St. John," she stated.
The Calgary-based carrier is facing increased competition from Air Canada (TSX:AC.B), which recently announced increased frequencies in Western Canada with its own fleet of Bombardier Q400s, operated by Jazz. It plans to increase its capacity between Vancouver and Fort St. John by 19 per cent as of May.
Air Canada is also preparing to launch its new low-cost carrier Rouge to destinations in Europe and the Caribbean on July 1.
After increasing its regional service in the west, WestJet plans to introduce Encore to eastern Canada in about nine to 12 months.
Launching WestJet Encore in the west was expected by industry analysts.
"It's good news for consumers," said Robert Kokonis, president of airline consulting firm AirTrav Inc.
An airline spokesman said starting in Western Canada is less about protecting its turf than making sure it is comfortable with starting a new service and a new fleet type from its home base.
"It allows us to have it closer to home and so to make sure we're comfortable with how we're operating it both from a guest experience as well as from an operations perspective before we roll out across the country," said Richard Bartrem.
About 300 employees will be hired by year-end to operate the first seven Bombardier aircraft. Up to 1,800 will be employed when the service is totally ramped up.
Employees will earn about 10 per cent less than what colleagues make at the mainline carrier, but wages are in line with a low-cost regional service, Bartrem added.
WestJet also announced Monday that it will deploy its fleet of Boeing 737 jets to two more U.S. destinations this spring and beef up its mainline service to several destinations in Canada, the Caribbean and Mexico.
Among the Canadian service enhancements is non-stop service between Toronto and Fort McMurray, Alta., a major centre for Alberta's oilsands industry.
In the United States, WestJet said it will launch non-stop service to Myrtle Beach, S.C., and Dallas, Texas, its 19th and 20th destinations in the United States, raising its total list of cities to 83.
Twice-weekly flights between Toronto and Myrtle Beach will start May 2, while service between Calgary and Dallas will begin April 29. Dallas-Fort-Worth is the home base and a major hub of partner American Airlines.
It will increase the number of flights between Toronto and Vancouver, Edmonton, Calgary, Saskatoon and Regina and will increase the frequency of flights between Calgary and Los Angeles, and Toronto to Orlando.
Year-round service will also become available to Aruba, Costa Rica, and Trinidad and Tobago, while extra weekly flights will be added between Toronto and Jamaica, Varadero, Cuba, St. Martin, Puerto Plata, Dominican Republic, and Cancun, Mexico.
On the Toronto Stock Exchange, WestJet's shares were down 15 cents at $21.24 when markets closed Monday.