WestJet’s chief executive has been on the financial news circuit with news that Canadians should find plenty of good travel deals this winter and on into summer.
Speaking to Yahoo Finance Canada, CEO Alexis von Hoensbroech said travel demand is resilient and that he expects a strong winter season. But he also said capacity is up and that there are more options for travellers.
“There are markets that have seen strong pent-up demand that drove pricing, because there was an imbalance between supply and demand, the most prominent being on (transatlantic routes) over the summer,” von Hoensbroech said.
Demand is now more in line with capacity, which has helped bring prices down.
“I think there will be lots of bargain options for this winter and also next summer,” he said. “We do expect in the year to come that there will be some softness in the market.”
In its latest consumer price index report, Statistics Canada said the price of air transportation in Canada dropped 19.4 in October. According to Canadian Press, that follows a year-over-year drop of 21% in September, and 20% in August.
While some Canadians are trading down and booking less expensive resorts, WestJet still sees a robust winter travel season, von Hoensbroech said in an interview with BNN Bloomberg.
von Hoensbroech also said Calgary-based WestJet is seeing better cost-per-seat numbers than a year ago. The company’s profits for the first three months of this year were higher than in 2019.
“We feel that we are back, we have the pandemic behind us, and we are back in black, and we are very prepared for what is to come. I think we have costs under control and with that we hopefully will be able to offer plenty of affordable tickets.”
WestJet faced a pilot shortage for much of last year “but as we now get to the staffing levels we need we can fly more and distribute the costs across more seats,” von Hoensbroech told Bloomberg.
Asked about Sunwing’s integration with WestJet, von Hoensbroech said the combined company is now covering roughly 50% of the vacation market in Canada.
“So, we’re the clear market leader. And that’s coast to coast by the way, not just west but also east. This is a very strong position we have that should allow us to offer the most attractive product to Canadians.”
He also said Swoop is now fully integrated into WestJet.
It’s very difficult to operate a 16-plane ultra-low-cost carrier like Swoop in a big country with high costs, he said, so now WestJet instead offers ultra-low-cost tickets across its fleet, “but not on the entire plane.”
von Hoensbroech said WestJet’s renewed focus on Western Canada doesn’t mean it’s making a U-turn.
“It’s about focusing on the things that have made WestJet strong in the past, and also stopping things that actually weren’t that successful,” he told Yahoo Finance Canada. “We decided we wanted to be active in the markets where we can actually win and lead.”
von Hoensbroech said will take a ‘rather cautious” approach to intercontinental flying. The leisure travel segment, especially to sun destinations, is where WestJet sees opportunity.
“That's the other area where we think we not only can be a strong number one but also grow and broaden our footprint,” he said in his Yahoo Finance Canada interview.
