Former Investor Darling WestJet Struggles as Canadian Airline Seeks to Reinvent Itself
Photo Credit: WestJet is not just as simple all-Boeing 737 airline anymore. Pictured is the premium economy section that will go on the Boeing 787. WestJet
Skift Take
Investors sometimes ask why Southwest Airlines has avoided straying too far from its roots. They wonder if it should assign seats, or add a business class cabin, or sell meals on board. But Southwest almost always prefers simplicity. Given how much WestJet — once a Southwest clone — has struggled as it has evolved, we now understand why Southwest is so conservative.
For 52 consecutive quarters, Canada’s WestJet Airlines has posted a profit. But there’s reason to believe that impressive streak may end by June, even as many other North American airlines report near-record profits, despite rising fuel prices.
Canada’s No. 2 airline is struggling because of several factors, including aggressive moves by competitors, more expensive fuel prices, higher-than-expected costs related to a recent strategy shift, and labor unrest. WestJet's pilots have government permission to strike as soon as May 19 to protest low wages and what they are are unfair work rules, and some potential customers, fearful a strike might disrupt their travel plans, already may be booking elsewhere.“What we’ve seen over the last two weeks is a significant deferral of bookings, while some guests will either postpone travel plans or make other decisions,” CEO Ed Sims said Tuesday.
That news put a damper on WestJet’s fi
