WestJet's new boss has international ambitions
Tony Seskus | CBC News | Posted: April 23, 2018 8:00 AM | Last Updated: April 23, 2018
Ed Sims envisions 'no limit' to the opportunities abroad but analysts see headwinds in cracking new markets
WestJet's new boss says he can see "no limit" to the international opportunities for the Calgary-based airline, eyeing potential growth in Asia, Europe and Latin America.
CEO Ed Sims says that with advances in fuel efficiency and airplane technology, there's opportunity not only to take more Canadians abroad, but to attract more travellers to Canada.
"We only have a population of 35 million here, but we have the opportunity to fly to populations of three billion," Sims told CBC News.
"There is absolutely unlimited opportunity ... to tap in to vast markets in Asia, still huge markets in Europe, an enormous market in Latin America, with unlimited opportunity to boost tourism to this country."
WestJet first made a name for itself as a low-cost domestic airline. Over the years, it has expanded to destinations in Mexico, the Caribbean and, most recently, Europe.
But last year, the company placed a firm order for 10 Boeing Dreamliners, which will have the range and fuel efficiency to reach more distant markets.
WestJet's first Dreamliner 787s are expected to be delivered between the first quarter of 2019 and December 2021.
The airline also has an option to buy an additional 10 Dreamliners to be delivered between 2020 and 2024.
With a range of up to 14,000 kilometres, the jets are said to be as much as 20 per cent more fuel efficient than WestJet's current fleet of 767s.
Sims said the most significant element of the company's growth plans focuses on Canadian travellers, but he said that they would also look to bring international guests to Canada.
"Whether that's from Guangzhou, whether that's from Rio de Janeiro, whether that's from London, we can effectively build a Canadian experience in conjunction with partners, like Destination Canada, from the moment somebody walks on board our aircraft," he said.
"That's a phenomenal opportunity."
The company is going to have to come to the table and try a little bit harder... - Rob McFadyen, Air Line Pilots Association
Airline analyst Fred Lazar said there are a lot of opportunities for inbound tourism from Asia, but added that the market is crowded and difficult to crack.
"They're going to prefer their own airline — that's common around the world," said Lazar, a professor at York University's Schulich School of Business in Toronto.
"Unless he partners with more Asian carriers he's not going to make any major inroads into attracting travelers in that part of the world."
Instead, Lazar expects WestJet to use its Dreamliners primarily on European runs and maybe some South American flights.
"I'm sure they have an idea where they're going to deploy the first five or six," he said. "Beyond that, they're probably still thinking about it."
Domestically, Sims said the launch of WestJet's new ultra-low-cost carrier, Swoop, remains on schedule for June 20.
Sims also sounded positive in discussing the state of talks between the airline and its pilots, who are seeking their first unionized contract with the company.
"I am confident that at around the time that we come to launch our ultra-low-cost carrier, Swoop, that we will have terms of agreement," Sims said.
"There's certainly more that unites us than divides us. When rational people continue to sit round a table, you generally find a rational outcome."
Rob McFadyen, chairman of WestJet's Air Line Pilots Association (ALPA) master executive council, said negotiations are going better than in the past.
Earlier this year, when Gregg Saretsky was WestJet's CEO, the union said talks between the two sides were going "poorly." Saretsky retired in March and was replaced by Sims.
McFadyen said he's looking to make significant progress, but added that they've had two negotiating sessions now where they haven't passed any tentative agreements on any section of the contract.
"The company is going to have to come to the table and try a little bit harder so we can get this done," he said.
The two sides will sit down again this week for three days of conciliation talks beginning Monday.
AltaCorp Capital analyst Chris Murray said the talks are important because it will set benchmarks for a number of WestJet's new initiatives, including its wide-bodied aircraft and Swoop.