Needless to say the existence of many routes operating in and out of Africa are steeped in historical ties – Air France for instance is very strong in West Africa. However, such historical ties are only a small factor in the broader picture. The formation of global airline alliances, armed conflicts, the discovery of natural resources and a host of other factors make the picture far more complex.

If we compare the footprints of the alliances side-by-side we can see that the Star Alliance has the broadest reach. Notice in particular how the major centers that dot the coast of the continent are well served.

Not far behind the Star Alliance is SkyTeam. Air France and KLM’s long history in Africa coupled with Kenya Airways’ growth and success are the major factors behind this second place.

This leaves OneWorld in third but not by much.

Let’s not ignore non-alliance players. The collective presence Emirates, Qatar Airways and Etihad put forward is no longer negligible. You might argue that the gulf trio only affords three non-stop destinations outside Africa – Dubai, Doha and Abu Dhabi – but I would argue that one-stops at the right price are just as good or better than direct services.

With Ethiopian set to join the Star Alliance shortly, the list of African carriers ready to be rolled into major alliances drops to zero – either for lack of quality or lack of size. A lack of carriers however does not mean a lack a opportunities. The difference now is that anyone who wants a piece of the action will have to really put some skin in the game, not simply agree to a codeshare. Brussels Airlines is already doing this by setting up an operation in Lubumbashi (to be called Korongo) but they will not be the last. Numerous European and Middle Eastern carriers have half an eye on such joint ventures as do the new darlings of African politicians - the Chinese and the Indians.

WestJet’s Care-antee logojet by Dave Subelack

Recently I blogged about the challenges facing the top brass at WestJet. In the time that has passed a couple of interesting things have happened.

A change at the top
Sean Durfy’s resignation announcement has paved the way for Gregg Saretsky to assume the reins as CEO. While this caught me by surprise the reason given – the desire to spend more time with his family – seemed perfectly plausible. However, the cynics of this world were not quite so willing to accept this, with a number of people choosing to believe he was shown the door for the less-than-elegant adoption of the new reservation system. You could forgive the cynics for their speculation as CEOs have been at the centre of upheaval at WestJet in the past. Whatever the case may be I think it’s a win for all concerned. Durfy gets to live life at a smell the roses pace for a while. WestJet benefits from the experience and energy of a new CEO who already understands the inner workings of the company and has a stellar track record to boot. It’s great to see somebody with a sincere passion for aviation leading the charge – there are far too many “suits” running the show at other carriers.

A new dance partner
For years we’ve heard about potential tie-ups between WestJet and Southwest. It’s one of those stories that just won’t go away – murmurs about codeshares and ground handling agreements seem to flare up periodically and then vanish as quickly as they appeared. WestJet themselves have fueled this fire on a number of occasions with ambiguous statements declaring interest but only ever offering vague timelines. Personally I’ve always felt that the synergy potential between WestJet and Southwest is overblown. Though they were founded on similar business models WestJet is for all intents and purposes a full service carrier. It seems I’m not the only one with this mindset; this weekend WestJet went public with the fact that they are courting Delta with a view to drumming up US traffic through codeshares. WestJet is set to receive 5 slot pairs at LaGuardia (subject to regulatory approval) which will allow them to exchange traffic with Delta. Indications are that theses slots are to be used for flights to Toronto and Montreal. The folks at Delta must be happy about this; additional feeder traffic to LaGuardia (where they are trying to grow their presence) without using any of their own planes and crews and without signing a capacity-purchase agreement. All of this in exchange for slots they would likely have been forced to give up anyway. Talk about getting something for nothing.

Walk. Don’t run.
Despite WestJet’s friendly demeanor towards Air France/KLM and this new cozying up towards Delta I remain confident that they are not positioning themselves to enter SkyTeam – there’s simply not enough in it for either party. SkyTeam currently plays second fiddle to the Star Alliance in Canada and adding WestJet would do little to change that. What it would do is tie WestJet’s hands in terms of partner opportunities with OneWorld carriers. It’s far more likely that they will cherry pick codeshare partners from both SkyTeam and OneWorld under the “my enemy’s enemy is my friend” mantra with a view to building a robust codeshare network à la Alaska Airlines. Did I mention Saretsky used to work there?

An infographic summary of the three global alliances

While staff turnover, fleet size, and destinations are constantly in flux at all major airlines (and the alliances they belong to) I think the infographic above paints an interesting portrait of the three global alliances. This picture is set to look quite different by this time next year as no less than 10 carriers are in the final stages of negotiation or joining one of these three.

While these carriers play an important role in global aviation one can not discount the titans of the middle east (EK, EY, QR) or the many LCCs around the world. These additional carriers merit an infographic of their own. Coming soon…

A WestJet 737 (C-GQWJ) heads back west from YOW. Photo by Ayush Yash Shrestha

Every day hundreds of WestJet pilots face a critical choice. At decision speed (last moment at which an aircraft can stop its take-off) they must decide and commit to a course of action. As a corporation WestJet is approaching a series of critical decision points of its own and it’s time for their executives to choose and commit. The question is will they be able to handle these decisions with as much skill and lucidity as their pilots?

Fleet commonality: strength or weakness?
The single biggest factor propelling WestJet towards this critical decision is their fleet. WestJet operates a homogeneous fleet comprised entirely of 737 aircraft – albeit with three variants in the mix (-600,-700 and -800). While this approach does not provide a tremendous amount of operational flexibility the benefits are clear; lower maintenance costs, lower training costs, lower certification costs and a valuable bargaining chip come fleet renewal time. The problem however is that WestJet may well be running out of city pairs between which the 737 is viable.

Due to Canada’s low population density and sparse urban centers, domestic opportunities are limited and probably close to saturation both in terms of frequency and capacity. That essentially leaves the United States, the Caribbean and Mexico.

 

Current WestJet route map

A glance at their route map suggests that there are still many opportunities between Canada and the US. Large commercial centers such as Chicago, Houston, Philadelphia and Dallas remain untapped. However, getting into those markets is going to be extremely difficult. The Star Alliance has a firm grip on the first three and Dallas is dominated by OneWorld. Given how established the alliance carriers are in these markets and the number of frequencies they offer it will be a costly and risky exercise to enter and compete – one that may very well end in a bloodbath.

I’m not saying that there are no further possibilities to and from the US, there are, but all are challenging – there is no low hanging fruit left. Similar challenges exist for other destinations within the 737′s operating range outside of the US. Most sun destinations favored by Canadian tourists are already well served – at least in peak season – by Canadian operators; hardly solid ground for significant expansion. This forces the question, is a 737-only fleet still the right fit? Is it time to add a second, smaller aircraft type to address secondary markets or perhaps a bigger aircraft type to deliver capacity to proven markets or even go long haul? While both of these possibilities hold some merit I think WestJet will take the softly, softly approach of making small adjustments throughout their network while trying to drive new traffic to their hubs through codeshares.

New technology, new possibilities.
Despite some teething problems and short term pain the process of transitioning to the SabreSonic reservation system is complete. This leaves WestJet free to start code sharing at will and their memorandum of understanding with Air France/KLM seems to indicate that codeshares are the way forward. Let’s just hope that these are implemented more effectively and with more urgency than has been the case with the great Southwest “codeshare.” It is important to understand that cozying up to Air France/KLM is not necessarily an indication that full SkyTeam ascension is in order. OneWorld offers more enticing possibilities: deeper and broader global coverage as well as more direct flights to Canada from points of interest. Given that Canada has a significant (and growing) immigrant population the value of this reach should not be underestimated. With all of that said it is important to stay in touch with reality, after all this is a real life business not a game of Risk – an alliance membership is not going to allow WestJet to take over the world. In all likelihood WestJet will pick and choose codeshare partners with a view to getting more people to enter Canada through their gateways of choice while remaining alliance-agnostic.

Victims of their own success.
In terms of domestic market share, WestJet is gaining ground on AC. Fast. Their domestic market share at the end of December 09 was revealed to be approximately 38% (up 2% from 08) versus Air Canada’s 55% (down 2% from 08). WestJet have stated that they believe they can replace Air Canada as the largest domestic operation within the next five years. While this is a possibility I would say that it is going to be incredibly difficult without serving smaller communities – communities that cannot currently be served profitably with a 737 of any flavor. Back to the single aircraft type problem we go, perhaps this will see the birth of a subsidiary – WestJet Jazz perhaps?

Despite a well oiled, on-the-ball PR and Marketing arm WestJet is not the media darling it once was. This just comes with the territory. The bigger you get the more detractors you attract. Throw in some corporate espionage stories and some bad blood with former employees and the “we care” corporate facade suddenly takes a back seat. Certainly in eastern Canada WestJet is no longer viewed as the little airline that could. That moniker has now been passed on to Porter, who recently pushed WestJet out of the number two spot in the Toronto-Ottawa-Montreal triangle. No prizes for guessing who sits at number one.

If WestJet play their cards right we may see some serious upheaval and reshaping of the Canadian aviation scene. Now if only the federal government would make running an airline in this country less of a financial nightmare, things could get really interesting.