28 SEP 2017: So WestJet announced that it is going to, “swoop into the market with a new business model that will provide lower fares and greater opportunity for more Canadians to travel.” I’m sorry but I could swear I’ve read this story before: Some time in the nineties perhaps. The plot certainly sounds awfully familiar.  

Whoa, wait a minute, I remember now. It went something like this:

Once upon a time in the kingdom of Canada, big bad airlines ruled the land and kept the people oppressed and unhappy. They charged high prices that the peasants could not afford and their servants were often disrespectful to those that did fly. Then in the prairie city of Calgary a little airline called Clive bravely took to the air with just three aeroplanes.

Young Clive was impish, agile and fleet of foot. He pledged to charge his countrymen much less money to fly than the big bad giant from far off Quebec and another, once big but by then weak and sickly airline from British Columbia. The brave little airline offered low airfares to all the people and had really happy servants that were nice to everyone they met.

In the beginning, Clive only visited a few cities in the west of the land. But as the glad tidings spread far and wide, more and more of the common people sang his praises so Clive got bolder and began to visit more places. Then, when the sickly airline in Vancouver became too weak to continue and went to live with the evil giant in Quebec, it left Clive all alone.

Now that the giant had only Clive to fight, it got really mean spirited. When Clive made friends with the people of Winnipeg - a city where the giant had once lived – the giant got very upset and, pretending to be good, offered the people lower fares than Clive’s. The people were fooled for a while and re-pledged their allegiance to the giant thereby vanquishing Clive from their city.

As soon as Clive was gone however the giant raised his fares again and all the good people of Winnipeg bemoaned their own foolishness. They soon begged Clive to return and promised they would never again fall for the giant’s false promises. Clive heard their pleas, returned to a hero’s welcome and the people rejoiced that they’d never again have to fear being overcharged by an evil giant.

Nice ending maybe but unfortunately the “happy ever after” bit is strictly the stuff of fairy tales.

WestJet may have got off to a great start 21 years ago when it first promised to “provide lower fares and greater opportunity for more Canadians to travel” – but along the way it kind of lost the plot. Now when a recycled version of the exact same speech is used to introduce little brother Swoop, the question has to be asked why WestJet ever stopped being low cost and low fare? Two of the world’s most consistently profitable carriers, Southwest and Ryanair, have succeeded by studiously sticking with the same one aircraft type, short-haul business model that WestJet has systematically abandoned.

And what about Encore? When that was launched in 2013 wasn’t it supposed to be the new low-fare regional carrier? Why add another brand and employee group with Swoop as opposed to just growing Encore?

Mr. Saretsky maintains that Calgary-based Swoop will operate strictly on secondary routes and will not compete directly with WestJet. That’s tough to fathom as if the new carrier does manage to offer significantly lower fares than WestJet then it is inevitably going to divert traffic. Canada’s not that big. Offer a lower fare from Abbotsford or Hamilton and you’ll pull some leisure travellers away from YVR and YYZ that might otherwise have flown on WestJet: It’s called self-cannibalization.

The next obvious question has then got to be how long will it be before Swoop is following the Rouge/Air Canada example and operating long haul international routes that compete with WestJet’s burgeoning overseas expansion?

Canada needs true unfettered competition if airfares are ever going to come down to the levels enjoyed in almost every other part of the world. The nepotistic, inbred structure we’re witnessing with the birth of Swoop, where the cry of “lower fares for all” is tempered by, “but we won’t compete with big brother” is a clear case of one step forward two steps back.

 

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David Tait

David Tait's insight and irrepressible humour give us an insider's take on the airlines and the industry in general. He doesn't pull his punches, and readers find his columns thoughtful, informative, amusing and infuriating – regardless, David's views on our industry are always original. 

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