WestJet and London: A mess or a success?
Airline's expansion has put bums in seats but company struggling with delayed, cancelled, diverted flights
As WestJet struggles with the operation of its Canada-to-London routes, the last thing the airline needed was another grounded flight.
But that's just what happened Tuesday, when a WestJet flight from London's Gatwick Airport to Toronto was diverted to Greenland because of a potential mechanical problem. Passengers were given meal vouchers, and two aircraft were sent to Greenland to bring them to Canada.
This has become a familiar story for the airline. Earlier this month, two flights from Toronto to London were cancelled. According to flight-tracking website Flight Aware, a further three from London to Toronto were cancelled the same weekend.
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Three weeks before that, a WestJet flight from London to Edmonton was diverted to Iceland, once again because of a mechanical issue.
As airline analyst Ben Cherniavsky, of financial services company Raymond James, wrote in a research report earlier this month, "The passengers were accommodated in hotel rooms, two 737s were flown in to retrieve them to YEG [Edmonton] and a new engine was delivered (on a chartered 747) to repair the plane."
In addition, everyone on board was entitled to 600 euro compensation, according to European Union regulations.
In September, WestJet's chief executive Gregg Saretsky told the audience at a Calgary business conference that his airline's expansion into London was one of the best decisions WestJet has ever made.
In terms of number of seats sold, WestJet's expansion to Europe has been a huge success. But in terms of operations, it's been a mess.
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In his report, Cherniavsky found that over a five-week period starting September 1, nine per cent of WestJet's flights between Toronto and Gatwick were cancelled, and 40 per cent were on time. For Air Canada Rouge, flying the same route over the same period, closer to 70 per cent were on time.
WestJet said that from August 1st until October 18th, 14 flights were cancelled and four diverted, one of those for medical reasons.
Who pays for mechanical issues?
These long delays and cancellations can be traced back to mechanical issues with the four Boeing 767s that WestJet purchased from Qantas through a deal with Boeing Capital. They have an average age of 24 years, which is not out of the ordinary in the airline business, but does pose challenges.
"The 767s have been giving us lots of grief, lots of mechanical problems," Saretsky said in an internal video from June, adding that he hoped reliability would improve by early July.
The airline has put the blame for the mechanical problems on the repair facility in Louisiana that refurbished the aircraft after WestJet took possesion of them. A spokesperson for WestJet told CBC News that there have been talks with Boeing about whether the airline is due some compensation.
On the flip side, WestJet has proved that Canadians are fine with having to buy their meals and pay for baggage on a trans-Atlantic flight as long as the fares are cheap. There is not much question that the airline has put bums in seats and that is why it is calling London a success.
"Many laughed at WestJet, saying, 'They don't really understand long-haul travel, because every other international airline does a free meal.' I'd like to say we understand travellers very well, because no one else sells London for $299," Saretsky said at his speech in Calgary in September.
In fact, Ben Cherniavsky estimated that WestJet's load factor on those flights has been close to 90 per cent, stimulated by very low fares.
In his report, he wrote that WestJet has shown that there is significant market opportunity for the airline in London, but he's not calling it a win yet.
"Although we expect WestJet's Q3 revenue to reflect the 'commercial success' of LGW [London-Gatwick] we struggle to gain confidence in the airline as an investment until LGW also proves to be an 'operational success,'" Cherniavsky said.
In the meantime, the airline says it thinks its passengers have been happy with their trips.
In an email to CBC News, WestJet spokesperson Lauren Stewart wrote, "As we end our first summer season of travel to Gatwick (with the exception of Calgary and Toronto, which now have year-round service), we are certain the experience was enjoyed by the approximately 320,000 guests who had the opportunity to visit both sides of the pond at prices rarely seen."