All airlines have been adjusting their business strategy as they’ve faced increased competition, both in shorthaul and longhaul markets. For example, Air Canada has Rouge, which is a low cost carrier with tighter seats, fewer frills, crews on different (cheaper) contracts, etc. It allows Air Canada to compete more effectively in markets that traditionally have lower yields.
Over the years we’ve seen quite a few airlines start their own low cost carriers, but there’s something especially interesting about an announcement that come out today. WestJet, Canada’s second largest airline, which was founded as a low cost carrier in 1996, announced that they plan on launching an ultra low cost carrier by the end of 2017. The new airline will initially launch with 10 high density 737-800s. Here’s how WestJet describes the new airline:
“We have built WestJet from its low-cost, regional roots into a renowned, international airline with service to 21 countries and today it’s all about disrupting at the price-sensitive end of the market,” said Clive Beddoe, co-founder of WestJet and Chair of the Board of the Directors. “Launching a ULCC will broaden WestJet’s growth opportunities and open new market segments by offering more choice to those Canadians looking for lower fares.”