WestJet’s chief government officer Alexis von Hoensbroech says Canadian flyers can count on extra offers on airfares this winter and subsequent summer time, as pent-up journey demand moderates and productiveness improves within the airline business.
“There are markets which have seen sturdy pent-up demand that drove pricing, as a result of there was an imbalance between provide and demand, essentially the most outstanding being on (transatlantic routes) over the summer time,” von Hoensbroech mentioned in an interview with Yahoo Finance Canada.
Whereas journey demand has remained resilient, he says it’s now extra according to capability, which has helped carry costs down. On the identical time, von Hoensbroech says productiveness ranges are bettering because the airline overcomes a pilot scarcity, serving to drive operational prices down.
“I believe there might be a lot of discount choices for this winter and likewise subsequent summer time,” he mentioned.
Sturdy pent-up demand following the pandemic mixed with capability that continues to be beneath 2019 ranges resulted in greater airfares, significantly when it got here to worldwide journey. In keeping with knowledge from FlightHub, the typical value for a world flight topped $1,516.71 in July, a 35 per cent improve in comparison with the earlier yr.
However that pent-up demand seems to be really fizzling out. Statistics Canada reported this week that airfares plummeted 19.4 per cent in October in comparison with the identical month final yr, as airways increase capability and travellers rethink journeys as a consequence of greater prices.
Nonetheless, von Hoensbroech says demand stays resilient. WestJet, which is a non-public firm owned by Onex Corp. and doesn’t publicly disclose its monetary outcomes, has reported a revenue within the first three quarters this yr, he says. The airline is on monitor to surpass pre-pandemic capability ranges subsequent yr.
Strategic shift to concentrate on Western Canada, leisure journey
WestJet is within the midst of a strategic shift that has seen it concentrate on service in Western Canada – “returning WestJet to its roots” – whereas additionally increasing its leisure and solar vacation spot choices by the assistance of its acquisition of Sunwing.
“It doesn’t imply it’s a 180, or that WestJet goes again to the very starting,” von Hoensbroech mentioned of the change in technique. The airline first launched in 1996 as a low-cost service and did not fly east of Winnipeg till 2000.
“It’s about specializing in the issues which have made WestJet sturdy prior to now, and likewise stopping issues that really weren’t that profitable.”
A type of issues contains some regional journey inside Jap Canada. For instance, in October the airline suspended service between Toronto and Montreal by the winter.
“We determined we wished to be energetic within the markets the place we are able to truly win and lead,” von Hoensbroech mentioned. These markets are primarily in Western Canada, the place the airline already has a dominant foothold, and in leisure journey, a section of the market which has seen demand absolutely get better.
And whereas WestJet plans on rising its leisure journey footprint, von Hoensbroech says the corporate is taking a “moderately cautious” method relating to intercontinental flying with its wide-body fleet. Previous to the pandemic, the airline had set its sights on vital worldwide enlargement, however scrapped that plan post-pandemic, cancelling its remaining order for Boeing 787 Dreamliners and dismantling its hubs in Toronto and Vancouver. The airline now flies its seven Dreamliners out of Calgary, utilizing them to fly to Europe and Asia in the summertime, and south within the winter.
The leisure journey section, primarily to solar locations, is the place von Hoensbroech sees alternative.
“That is the opposite space the place we expect we not solely could be a sturdy primary but additionally develop and broaden our footprint,” he mentioned.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Comply with her on Twitter @alicjawithaj.
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