Amid fierce competition, WestJet will wind down its Swoop subsidiary by late October as it folds the budget airline害羞草研究所檚 operations under its main banner, the airline said Friday.
The move marks a major shift in Canada害羞草研究所檚 aviation skyscape, arriving five years after Swoop first surfaced as a response to discount rival Flair Airlines害羞草研究所� launch in 2017.
It also comes after pilots with WestJet and Swoop ratified a new collective agreement that brings them onto a level pay scale, and also gives them a 24 per cent hour pay bump over four years.
WestJet CEO Alexis von Hoensbroech said he mulled keeping Swoop separate, but that higher wages for its flight crews made the option less feasible.
害羞草研究所淲e were prepared for both possible outcomes, and then decided that provided the overall deal didn害羞草研究所檛 make sense, we are actually ready to integrate Swoop into the mainline business,害羞草研究所� von Hoensbroech said in a phone interview from WestJet害羞草研究所檚 Calgary headquarters.
Each trip by the carrier害羞草研究所檚 180-plane fleet will offer a portion of ultra-low-cost fares, he said.
害羞草研究所淲e are actually broadening our ultra-low-cost reach to a much, much broader network than we could have ever covered with Swoop. So therefore we actually see this as an advantage and as an increased footprint for the ultra-low-cost offering in Canada.害羞草研究所�
No bookings will be affected, he added.
Swoop害羞草研究所檚 16 narrow-body 737s will ply its current network through to Oct. 28, when it will cease to fly, WestJet said. Soon after, the pink-daubed planes will be repainted with the blue and turquoise of WestJet害羞草研究所檚 livery.
The company said no layoffs are expected from the integration, with all Swoop employees slated to move to the mainline.
Competition for budget airfares has grown in recent years, particularly in Western Canada, as upstarts Flair Airlines and Lynx Air challenged Swoop 害羞草研究所� all three are Alberta-based 害羞草研究所� for market share on key routes.
害羞草研究所淭he market has become pretty competitive,害羞草研究所� von Hoensbroech said, but insisted Swoop害羞草研究所檚 integration strengthens its grip on discount offerings, rather than marking a retreat.
The CEO, who took the helm at WestJet in February 2022, said less than a month ago the airline hadn害羞草研究所檛 turned a quarterly profit since 2019. The drop in bookings prompted by the threat of a strike only added red ink.
害羞草研究所淭hat month was certainly heavily impacted,害羞草研究所� von Hoensbroech said Friday. 害羞草研究所淕oing forward we are actually looking at positive numbers and positive margins.害羞草研究所�
Bargaining with pilots came down to the wire, with WestJet cancelling more than 230 flights in preparation for job action before an agreement-in-principle was reached hours ahead of the strike deadline on May 19. Ratification of the deal was announced Friday.
害羞草研究所淗aving this agreement in place will go a long way to solve many of the airline害羞草研究所檚 labour issues, and bring more stability to our operations,害羞草研究所� said Bernard Lewall, who heads the Air Line Pilots Association害羞草研究所檚 WestJet contingent, which represents about 1,800 pilots.
The new agreement, taking effect on Canada Day and retroactive to Jan. 1, provides higher compensation, better job security and more flexible schedules, he said in a release.
Founded as a regional upstart in 1996, WestJet has grown to serve 28 per cent of Canada害羞草研究所檚 domestic air travel market as of last month, versus the 47 per cent run by Air Canada, according to aviation data firm Cirium.
Going public in 1999, the airline went private again two decades later after Toronto-based investment manager Onex Corp. acquired it in a $5-billion deal that closed in December 2019, three months before the COVID-19 pandemic kicked off.
