WestJet recently announced the name of its Ultra Low Cost Carrier, or ULCC for short, set to take off in early 2018 and the chosen name, Swoop, left me quite underwhelmed.
For a company with an excellent track record in its first two decades and hit a home run with the moniker of its regional airline, Encore, naming this new division something more befitting a liquid laundry detergent brand seems a misstep for WestJet. While the name wasn’t to my or a number of my friends, family & co-worker’s liking the name was chosen for a reason according to Bob Cummings WestJet Executive Vice-President, Strategy and the executive member responsible for the launch of Swoop in this press release. “The name Swoop denotes exactly what we plan to do. It’s a powerful verb that demonstrates we plan to swoop in to the Canadian market with a new business model that will provide lower fares and greater opportunity for more Canadians to travel.”
ULCC’s typically flourish in markets with large populations aiming for a subset of leisure travellers wanting low costs above all and are willing to pay fees for additional services such as checked bags or advance seat assignment but given Canada’s large size and sparse population it remains to be seen whether there’s a large enough consumer base to draw upon to make Swoop a viable alternative. Other airlines have tried to go after this market including NewLeaf which in recent months morphed into Flair Airlines but none have had the big brand backing of such a major player in the Canadian aviation industry as WestJet and all the economies of scale that go with it.
Beyond the name, business model, and Calgary headquarters however little else is known about Swoop including possible routes. WestJet executives have said that they would target border airports in an attempt to capture Canadians flyers who cross the border to fly on U.S. ULLC’s but that trend is on the decline according to WestJet CEO Greg Saretsky noted in this article. “There is less leakage, mostly a function of the bargains having gone away with the weakening of the Canadian dollar,” Saretsky said. “It’s great to see Canadians flying from home and WestJet is benefitting from that.” The appreciation of the Canadian Dollar relative to its American counterpart in recent months may alter that falling cross-border traffic but is it really enough to feed a start-up ULCC?
In addition there’s the matter of route network as should existing mainline WestJet routes such as Edmonton – Winnipeg for example be replaced with Swoop operated flights it’s possible WestJet could simply be moving current customers from its full service brand to its no frills division rather than attracting new passengers.
There’s much that remains to be seen about this ULLC experiment but if there’s one thing I’ve learned in watching WestJet evolve over two decades it’s that it has a knack for defying the naysayers and charting its own course onward and upward so the gamble might just pay off despite the perceived pitfalls and clunky name.