WestJet sees transborder flying as important part of Encore strategy

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WestJet sees a C$2 billion ($1.99 billion) market it will have access to by adding new Bombardier Q400 aircraft to its fleet through its new Encore regional carrier, said WestJet executive vice president finance Vito Culmone at the Canadian Imperial Bank of Commerce World Markets Whistler Institutional Investor Conference on 25 January.

"Two billion dollars is the size of the prize," said Culmone, specifying that the airline estimates C$1 billion coming from domestic routes within Canada and C$1 billion in transborder traffic from Canada into the USA.

WestJet serves 31 destinations within Canada, while Air Canada flies to 59 cities domestically. Culmone says that WestJet is not planning to match that number, but it will have several new opportunities to add new cities and stimulate traffic through the fares it will offer in those destinations.

"When you look at the narrowbody market in Canada, we estimate that to be about a C$4 billion market and we're effectively in the neighbourhood of 38 to 45 [percent] share in that market," said Culmone.

WestJet has made 20 firm orders for the 78-seat Q400s and plans to receive seven in 2013 and another seven in 2014. The carrier also has 25 options available starting in 2014 that it could choose to take.

WestJet plans to announce Encore's initial destinations in February.