Looking ahead, WestJet’s fleet could grow to as large as 135 aircraft by end-2018 or remain almost flat at 102 aircraft if the airline chooses to return the aircraft coming off their leases in the next six years.
The airline’s new aircraft deliveries from 2013 through 2018 are 737-700s, but Saretsky says WestJet is likely to convert most of them to -800s. “As long as the economy stays robust, we will probably convert most of those to -800s.”
Whether the airline decides to grow its fleet to 135 aircraft by end-2018 depends on its progress towards reaching a return on investment capital goal of 12% from 10.8% now, says Saretsky. “It’s moved up nicely from 8.7% over the last couple of years.”
WestJet is also keen on the 737 Max, and is in talks with Boeing on price tags, says Saretsky. “The savings are entirely in the fuel burn, which Boeing is saying is in the neighbourhood of 12%. So as long as the price isn’t 13% higher, then the math works.”
As to how many 737 Max aircraft WestJet could potentially need, Saretsky says it’s a “crystal ball”. There are many variables, such as what happens with the competition, or whether there are more airline failures or consolidations, he says.
Saretsky is also not ruling out converting existing 737 Next Generation orders to the 737 Max. “If it was possible, and if the price was attractive, that would be something we would be crazy to not be interested in.”