WestJet still sees itself as Canada’s champion of low-cost air travel, but conceded on Thursday there’s plenty of pent up demand for cheaper flights.
“We see ourselves as the provider of low fares in the marketplace,” said Vito Culmone, the Calgary carrier’s head of finance.
Speaking at a conference, Culmone was responding to questions about the possibility of new so-called “ultra” low-cost air carriers launching services in Canada as early as next spring.
MORE: Western Canada ripe for new low-cost air service, report says
The executive said WestJet is ready for the arrival of lower cost rivals. “We expect competition,” he said.
Jetlines and Jet Naked have generated buzz in recent months by announcing tentative plans to offer air service at a cost that’s a fraction of average airfare prices advertised by WestJet and Air Canada.
A Conference Board of Canada report published this week suggested the buoyant economic conditions in Western Canada combined with the rising price on an average ticket have created an opportunity for lower-cost carriers.
“There’s a market there,” Culmone conceded.
WestJet already competes against ultra low-cost carriers in the United States, he said, noting six million Canadians “slip across the border” each year to take cheaper flights with carriers like Spirit Airlines and Frontier.
“That tells you price matters, fares matter,” Culmone said.
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Experts suggest new low-cost carriers in Canada could introduce ticket prices that are half the cost of the same flight sold by WestJet or Air Canada.
MORE: Air Canada matches WestJet on new baggage fee
Industry lift?
Still, the new competition could end up benefiting the industry by stirring up more demand from Canadians who might otherwise not considered a flight.
Speaking at the same conference earlier, Air Canada’s head of finance explained how WestJet’s regional service, Encore, has helped lift overall demand in routes formerly only serviced by Air Canada.
“Typically they go in and lower fares, but they stimulate traffic,” said Mike Rousseau, CFO at Air Canada.
“We match the lower fare and traffic goes up.”
WATCH: BYOP – bring your own pretzels. That could be the new standard when discount airline ‘Jetlines’ launches in Canada next year.
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