Canada’s Westjet said it will cancel orders for 15 Boeing 737 Max aircraft as the pandemic continues to ravage the airline industry.
“WestJet and Boeing have reached an arrangement to adjust WestJet’s MAX firm commitments by 15 aircraft,” said airline spokesperson Morgan Bell in an email. “WestJet remains committed to our 737 MAX aircraft and have safely returned the first three of our 14 MAX to the fleet.”
The first Westjet Max flight happened January 21 after governments around the world grounded the type for almost two years. They took the action after a pair of deadly crashes that killed 346 people, including 18 Canadians.
The decision to cut Westjet’s order comes almost a year to the day aviation collapsed because of COVID-19.
Westjet has flown the 737 since its inception 25 years ago and still has 27 Max aircraft on order.
That only three Westjet Maxs have returned to service is a sign of the desperate shape of Canada’s airline industry. The airline is currently operating just 59 of its 178 planes.
Westjet’s Max aircraft are configured with 174 seats. They are more fuel efficient than older aircraft, but there simply aren’t many people filling those seats. Early data in 2021 show passenger levels down around 90% compared to January 2020. So it can be far more efficient for the airline to fly smaller -700 or -600 or even Dash 8-400s.
Rival Air Canada also cancelled orders for 11 737 Max aircraft early in the pandemic. On the flip side, ultra low-cost carrier Flair is leasing 13 Max planes to build it domestic fleet.
Competition concerns
At the same time, Canada’s airlines are facing increasing concerns over competition from south of the border. Southwest Airlines announced new service to Bellingham, Washington Tuesday, a stone’s throw from Vancouver.
“Following the reopening of the Canadian border, we expect a return of the value-minded travelers who already drive to this alternative airport to escape high fares and taxes,” said Southwest chief executive Gary Kelly.
That brought a quick reaction north of the border.
“Curious to know what additional impact this deliberate decision from Southwest will likely have on the already 23% drain of jobs, guests and goodwill from Canadian airlines to foreign competitors?” said Westjet President and Chief Executive Officer Ed Sims in a LinkedIn comment Tuesday. “Others seem to see an opportunity all too readily while our own government continues to walk past the threat.”
While negotiations are ongoing, the Canadian government has not announced any sector-specific aid for airlines. Ministers have instead repeatedly pointed to wage subsidies worth more than $1 billion as proof of their commitment to the industry.
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