In a statement WestJet Group CEO Alexis von Hoensbroech marked the milestone and also shared his outlook and strategy for the WestJet Group’s future.
Von Hoensbroech noted that profit share has been synonymous with the WestJet culture for 27 years. “The first three quarters of this year outpaced our earnings from pre-pandemic 2019 and I could not be prouder to celebrate and congratulate the team for the great work that led to a return to profit,” he said. He credited WestJet’s team, the company’s strong and sustainable business model, market momentum and pent-up demand, one that “resulted in one of the best economic environments for airlines that I have ever seen.”
While 2023 was a favourable environment that paved the way to a return to profitability, WestJet Group remains “cautiously optimistic” on its outlook for 2024. “The same uniquely Canadian cost challenges will continue, while the economy is weakening and higher interest rates are catching up to all of us, but we built considerable momentum as we head into the new year. We are growing, both in aircraft and in talent. We have the largest narrow body order book in Canada and are considering adding even more. Enabling this fleet growth are the most talented aviation professionals in Canada,” he said. “Our strategy to be Canada’s western leader and national leisure champion is working. Our revenue in the most recent quarter was the highest ever in our history.”
Von Hoensbroech said WestJet Group “will work hard to stay lean, improve our cost advantage over our competitors, and accelerate our growth.
And while the Sunwing acquisition “is of utmost importance” to WestJet Group’s strategy, Von Hoensbroech said that will be it for acquisitions for now: “I know integration is a heavy lift for our people, fortunately, as of now, we have no more need or appetite for further acquisitions.”
He added: “We know where we are going, we are maintaining our focus to keep our costs down, we have the order book required to deliver our growth and we have the most capable airline and tour operator team in the country. Today was an exceptional celebration of success for the WestJet Group. We have our eye on the prize and we are just getting started.”
He noted that following the pandemic, more than 60 airlines around the globe ceased operations. He also had something to say about airlines that survive on high demand during peak travel months: “Business models that make money in some months and lose money in others will find it tougher to survive and we saw the harsh reality of this during the pandemic.”
Von Hoensbroech addressed WestJet Group’s ultra-low-cost carrier strategy, following its integration of Swoop. “I am firm in my belief that the pure play ULCC model is heavily challenged in Canada, given its vast geography, small population and high cost of air travel infrastructure. We have tried and learned a lot from Swoop. Once you grow beyond 10 ULCC aircraft you are forced to tap into smaller markets that don’t support a whole airplane full of ULCC capacity. Others have tried and failed, and some are still trying and challenging us.”
He said WestJet Group’s strategy of adding ULCC-style fares and products within its mainline aircraft “is designed to give us flexibility to serve all Canadians, even the ultra-price sensitive ones, and to do so profitably.” Once introduced in the new year, WestJet Group will have a ULCC type product onboard its existing fleet of 180 aircraft. “This allows us to easily offer an equivalent ULCC capacity of 50 Boeing 737 sized aircraft, while providing each market with an appropriately sized offering. As we receive deliveries of our MAX10 aircraft, starting next year, we will gain an unbeatable seat-cost advantage, as these aircraft provide the most seating of any narrow-body aircraft in Canada with 212 seats.”
The final piece in the strategy? Integrating Sunwing Airlines “and the perfect complement” of Sunwing Vacations Group as the tour operator to WestJet Group’s business. “This year, one out of every two trips from Canada to the Latin Caribbean market will be on a WestJet Group aircraft. And equally on the tour operator side, one in two vacation packages sold in Canada will be sold through the various brands that make up our Sunwing Vacations Group. This gives us the scale and market presence to provide the most attractive vacation offerings to Canadians.”