Fortress Calgary: how Westjet came to dominate the Alberta market

Calgary International Airport opened its international terminal in October 2016. Westjet believes the Calgary market is underserved to overseas destinations. (photo: YYC)

Westjet was born of frustration. In the mid-1990s, Canada’s aviation industry was dominated by two airlines: Air Canada and Canadian Airlines International. And several prominent Calgary businessmen, led by Clive Beddoe, believed they were being overcharged, particularly on flights to Vancouver. They could not know then that two decades later, their low-cost solution would come to dominate the Calgary market.

Canadian Airlines is gone, absorbed by Air Canada, and Westjet is in the process of transitioning from its low-cost roots, to competing on the international stage.

And with each passing season, Westjet’s hold on fortress Calgary grows more complete.

To analyze just how dominant the airline has become at its Calgary hub, Western Aviation News turned to each company’s published schedules on their websites, to compare Westjet’s capacity with Air Canada’s for the week of July 8, 2019, at the height of the summer flying season.

Overall, Westjet plans to fly 1,011 flights from Calgary that week, compared to 610 for Air Canada. That provides capacity for 116,858 passengers for Westjet, and 68,234 for Air Canada.

The backbone of both Westjet’s and Air Canada’s route network from Calgary is aboard flights to Toronto and Vancouver. And there, the airlines fly essentially “wingtip to wingtip,” sending similar planes at similar times for similar fares.

A more in-depth look, however, reveals how Westjet’s use of its hub in Calgary helps the airline build its network and dominate the market.

“We continue to build the business around connecting and flow traffic,” said Ed Sims, Westjet’s President and Chief Executive Officer, on a recent conference call. “Our non-Alberta connections are now more than double the Alberta connections, and we continue to see that growth in connecting traffic to and from Calgary.”

To boost that connecting traffic, last year Westjet signed an agreement with Pacific Coastal Airlines to fly small planes from destinations in Alberta and British Columbia to Calgary, with operations starting in June 2018. The operation is called Westjet Link.

“Since its launch last June, Westjet Link has stimulated travel in the markets that it serves by approximately 70%, while lowering fares by 20%,” said Sims.

Those connecting passengers also have a greater variety of destinations in Eastern Canada to choose from, thanks to Westjet’s willingness to pioneer routes that had never been tried before, such as to London and Kitchener-Waterloo, Ontario. Air Canada has not matched those services. The only route Air Canada dominates is to its hub in Montreal.

Westjet is also showing its willingness to test routes to the United States, with new services this summer to Austin, Texas and Portland, Oregon. It is also deepening a joint venture with Delta Air Lines by offering daily flights to Delta’s mega-hub in Atlanta.

“These three key markets will also help to diversify Alberta’s economy, open new trade links and forge stronger connections between Alberta and these major U.S. destinations,” said Sims.

Westjet’s true ambition is to grow overseas routes. The airline is in the process of adding its first three Boeing 787 Dreamliners to the fleet, which will enter service from Calgary on routes to London-Gatwick, and to two new destinations from Western Canada for Westjet: Dublin and Paris.

Airline executives say they made a conscious choice to base the new planes in Calgary.

“We still firmly believe the Western Canadian and the Western North American markets are relatively underserved by contrast to the Eastern Seabord,” said Sims.

Air Canada’s summer schedule, meanwhile, features service to London-Heathrow as well as two destinations not served by Westjet: Frankfurt and Tokyo.

Interestingly, Westjet and Air Canada will each fly the same planes to London, the 787-900 Dreamliners. But because Westjet’s business class section is half the size of Air Canada’s, Westjet can fit more passengers per flight, giving the Calgary-based airline 10% more available seats per week.

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