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WestJet's international expansion is risky business

Canadian low-cost carrier WestJet is known for its no-frills business model and comedic flight attendants, but it’s hoping to become a whole lot more. Last month the airline announced its first transatlantic route to London Gatwick starting next summer, and CEO Gregg Saretsky told the Wall Street Journal it will be one of many:
“We aspire to be a credible alternative to the existing international flight carrier from Canada. That means that all those geographies ultimately are within reason. Why not China? Why not India? Why not South America? Why not Europe? They’re large markets…that could be better served.”
But not everyone is on board with this new strategy, and West Jet is straying from its bare-bones mentality. The airline’s shares tumbled earlier this week, and analysts say the cost of flying new wide-body planes, and long-haul services like meals and a complimentary first checked bag are bound to eat up revenue (just ask jetBlue).
Even one of the company’s founding execs, Tim Morgan, is hesitant, telling WSJ:
“Going international isn’t something I would have done. If [flying to London] is the best way that WestJet think they can get better yields and the best bang for their buck, all the power to them.”
WestJet faces a host of other problems on the horizon: pilots who are looking to unionize, a sluggish national economy and rumors that a new ultra-low-cost carrier could be launched in Canada before the end of this year.
Taking on international bigwigs like Lufthansa and British Airways at London Gatwick won’t be easy, and WestJet’s arch nemesis AirCanada is also bringing heat. Days after WestJet announced its new flight, the flag carrier’s low-cost airline, Rouge, said it would also service Gatwick starting next summer.

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