Canadians look abroad

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Air Canada and WestJet are both slowing their domestic growth but are looking for opportunities abroad.

The international signals from Air Canada are unmistakable – in the same month that it placed an order worth up to $6 billion for long-range widebodies, it grew domestic capacity less than 2%. In a major statement about its future as an international airline, Air Canada's parent, ACE Aviation Holdings, has ordered 32 Boeing widebodies consisting of 18 long-range 777s and 14 787s with options for another 18 777s and 46 of the new 787s.

When the first three 777s arrive next year, Air Canada will start retiring its eight Airbus A330s, its 12 A340s, and finally its 45 ageing 767s. The Airbuses will go first. If it exercises its options and replaces all existing widebodies, its long-haul fleet will still grow almost a third from 65 to 96 aircraft. Robert Milton, chief executive of ACE, boasts that Air Canada will have "one of the youngest and most fuel-efficient fleets of any airline anywhere".

On the home front, WestJet boosted capacity much more sharply than Air Canada after the sudden collapse of Jetsgo. Its April capacity was up nearly 30% and as a result WestJet enjoyed a bigger spurt in traffic as Jetsgo passengers flocked to it. In the past month, however, traffic growth at WestJet and Air Canada has been equal.

Clive Beddoe, WestJet's chief executive, says: "We saw a huge surge in booking initially, but that demand has eased." WestJet has now scaled back domestic plans and Beddoe predicts it will grow only 20% for the entire year. The carrier has 16 new Boeing 737s arriving over the next 12 months, but it can adjust its growth by deciding how quickly to retire the 18 737-200s still in its fleet.

The low-cost carrier is also pondering whether to deploy some of its longer-range 737s abroad. Specifically, it is studying a new route to Hawaii, which it might launch in the fourth quarter.

DAVID KNIBB SEATTLE