WestJet signs codeshare with Southwest Airlines
Tuesday, July 8th, 2008 - 5:27 pm
MOU Scheduled To Take Effect Late-2009
Southwest Airlines, despite its exponential growth since its founding in 1971, is still solely a domestic carrier. In 2007 it was the largest — by passengers carried — in the USA.
Southwest’s only previous codeshare agreement collapsed with the bankruptcy of low-cost-carrier (LCC) ATA Airlines in April 2008.
WestJet, founded in 1996, was modelled after Southwest, adopting the latter’s single-class cabin, all-B737 model fleet, and use of secondary airports to reduce costs. The codeshare, which will allow the two airlines to sell seats on each other’s planes, will be WestJet’s first. WestJet’s problematic computer reservation system upgrade has been until now a barrier to codeshares or joining airline alliances such as OneWorld. (Air Canada is part of the Star Alliance.)
WestJet currently flies mostly to holiday destinations in the USA. Given Southwest’s avoidance of major U.S. airports and heavy use of indirect routes, the alliance with WestJet is likely of greatest interest to leisure travellers. Business travellers generally favour the greater variety of destinations and service levels available from traditional legacy carriers (LCs).
With future confirmed deliveries for an additional 46 aircraft, bringing its fleet to 121 by 2013, WestJet says it will continue its growth strategy is spite of a predicted near-term downturn in passenger traffic. The Calgary-based airline says it is having some success in attracting business customers, having signed up about 1,000 corporate accounts over the past year.
WestJet today announced June traffic results with a 76.5 per cent load factor, an improvement in revenue passenger miles of 17.9 per cent, and a capacity increase, measured in available seat miles, of 23.1 per cent. The June load factor is down 3.4% from the same month in 2007, while the year-to-date load factor is off a less-worrying 0.7%.
WestJet hopes the Southwest alliance will help the Canadian airline increase its share of transborder traffic from its current 9% to 25% by 2013.
WestJet shares (TSX:WJA) rose more than 11%, to $14.10, by the close of trading Tuesday. (Sources: Southwest Airlines; WestJet press release; Globe and Mail, “WestJet strikes alliance with Southwest“)
Links: WestJet Route Map; Southwest Airlines Route Map
