Optimism abounds at ultra low-cost arm of Westjet that the pandemic has reached bottom and the summer will see an upswing

Canadian ultra low-cost carrier Swoop plans to have its full fleet of nine aircraft in the air this summer as business starts to pick up post-pandemic.

“Based on our current forecasts and plans, they won’t be fully utilized,” said Swoop President Charles Duncan. “And by that I mean we used to fly 14 hours a day in July and August and it’ll be somewhat less than that on average across the fleet. But we will return to flying all nine airplanes. And the really positive thing.”

Compared to the depths the industry has experienced in 2020 and the first half of 2021, Duncan sounds downright giddy. He sat down for a virtual interview with Western Aviation News and laid out his vision for his ULCC arm of Westjet. It includes a future with 30 aircraft, with a domestic point-to-point network and sun destination flights from major cities.

“I think we’ve definitely called bottom,” he said. “And we know that there’s pent up demand and growth is coming. It’s a little bit of a question of is it July or a little bit after that. Gosh I would even love to be sooner, but we’re back to thinking about what what is the growth trajectory beyond the nine aircraft. And that’s exciting, you know for us. We’re not there yet when we first need to fully utilize the nine airplanes that we have.”

Charles Duncan on the future of Swoop

The following is a transcript of Charles Duncan’s interview with Western Aviation News. It has been edited for brevity and clarity.

WAN: Where is the restart when is the restart?

CD: It looks like June 28, or even a little bit ahead of that timeline. If we keep the same delivery of vaccines coming in I think it’s like 2 million a week right now for Pfizer, along with the other providers if we get and then we’ve got of course get them into people’s arms, but it looks like. Again June 28 was was the last analysis I saw and I think we’ve actually picked up the pace a little bit as we’re adding 12 year olds here in Alberta and so forth.

Since the interview was recorded, provinces have begun announcing their reopening plans, including Quebec, Swoop’s home province of Alberta, and British Columbia. While the details vary, they all contain relaxation of activity and travel restrictions.

WAN: So that would give July and August is perhaps travel months.

CD: Yeah, I think that’s the hope for us. But we do need lead time. We can’t announce this on June 29 that we’ve reached his magic numbers and now it’s okay to travel. We do need help from the government to lay out what that roadmap would be and to communicate it well in advance so that we can all – airlines, hotels, everyone in the value chain, and consumers – can plan and prepare.

Need help changing the narrative around travel

CD: We are certainly thinking that July and August will be stronger, and really becomes a turning point where the recovery begins. But we do need help from the government for sure to lay out that that that plan, and the timeline. I think following Dr Tam’s lead would be science and metrics based. And then we also need help just in changing the narrative around travel – being less punitive. We need to be encouraging travel, encouraging the economic rebound. We need to be opening the borders, we need to be eliminating quarantine hotels, reducing the 14 day quarantine. And I’m not suggesting we do all this in one go and do it recklessly. There’s a lot of work, we need a lot of support from the government and if this vision of even July, that I’m painting is trying to come true.

WAN: What kind of timeline would you like to see in terms of government messaging ahead of time?

CD: As soon as possible. We need it now, we should do what it takes, we need a couple of months lead time booking curves we talked about this before are compressed and so people are making travel decisions. Closer to travel day than historically they did before COVID.

WAN: Last time we talked, it was a month out.

CD: And I think that that’s still consistent, it’s even, maybe bifurcated a little bit. What we’re seeing is two types of bookings right now. People booking in the next two weeks, it’s very much essential travel people who’ve got to go. But then we’re also seeing people who are booking. You know Christmas travel, winter holidays. Six months out, but not very very little in between. I think people consumers are very comfortable that the restrictions will be lifted, and they very much want to get out and plan now for the coming winter. But there’s so much less certainty around next month in the summer that people are waiting. And I think understandably so.

The role of the ULCC in Canada

Rival Flair has been ramping up ultra low-cost domestic operations in May, adding routes and new destinations. The airline has also started acceptance trials of the first of its Boeing 737 Max on order.

WAN: Air Canada on their most recent analyst conference call said it’d be really competitive in the leisure business. Where do you see swoops rolling that ecosystem?

CD: This is what’s really exciting. We’ve been flying for almost three years now and the mission for me and the team is to ensure that we continue to be the leading ULCC in the market. And I do think that the recovery will be on the leisure end. People are looking for a good deal. We’ve done a really good job on costs [Cost per Available Seat Mile]. When we compare our results to the leading ULCCs in the U.S., we’re really happy with our performance.

Another exciting thing is that we have on our board of directors, Tom Fornaro, who was former CEO of Spirit Airlines down in the States. And he’s been really helpful in guiding me and our team on our strategy and execution. I just look what’s happening in the U.S. in particular. We know the rebound’s coming. We know there’s a ton of pent up demand that’s coming and we just need to get back to that help from the government to set that timeline, and tell us when it’s safe to travel. But I’m really excited about it because it will be our end of the market that rebounds first.

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