WestJet talking with Emirates for possible alliance

Kim Guttormson, Calgary Herald

CALGARY - WestJet is in discussions with Emirates Airline about a potential alliance, as part of the carrier's plans to expand its global reach.

Emirates - currently battling the federal government over its ability to increase flights to Canadian cities - is one of a number of airlines WestJet is talking to, CEO Gregg Saretsky said Monday.

"There's a list of 70 carriers that have expressed an interest in WestJet. We're working through that list in some priority, that priority being, really, the amount of revenue that we can expect to see from each of those carriers," he said. "Emirates is one of those 70 on the list.

"It covers one region we're talking about, Africa and the Middle East."

Emirates, which has also clashed with Air Canada about its desire to fly more planes into Toronto, as well as to land in Calgary and Vancouver, was the only airline specifically named by Saretsky when he spoke to a transportation conference last week about future plans.

WestJet, which expanded its relationship with Cathay Pacific this year and initiated a partnership with American Airlines, hopes to add similar agreements at the rate of one per quarter until it has deals with the remaining five global regions.

Those include the Middle East, Africa and South America.

A deal with Emerates would make sense, Canaccord Genuity analyst David Tyerman said.

"WestJet would obviously like to put more traffic onto their system and interline agreements or code-share agreements with any other airline, especially one that seems to be growing rapidly, has large ambitions etc., would be potentially positive for WestJet because it would add more traffic," he said.

While Emirates might be feuding with Air Canada, Tyerman doesn't believe that matters.

"The main thing is just get more traffic into your system," he said of WestJet. "They're not an international airline, with the exception of flying into the U.S. and Mexico and the Caribbean.

"It makes sense at this point in their evolution to look at partnerships like this, and even beyond this stage of their evolution. It's a logical thing for them to do, especially with the ambition Emirates has."

Emirates would also benefit from an agreement that would provide better connections in Canada, Tyerman said.

Saretsky agrees.

"They're looking for more access to the country and they've been blocked from that," he said. "So I think a partnership with us might help deliver some greater access."

The first step with any new partner would be an interline agreement, allowing one airline's passengers and baggage to transfer seamlessly onto connecting flights. WestJet signed an interline deal with American Airlines this fall, giving it better access to their extensive U.S. network.

It had previously had discussions with Dallas-based Southwest, but those broke off last spring, at the same time it was pursuing talks with Delta Air Lines.

WestJet already has interline agreements with Air France-KLM and China Airlines, and a memorandum of understanding with British Airways.

Code-shares are an expansion of those relationships - WestJet signed its first with Cathay Pacific last spring - where each airline can sell tickets on the other under their own brand.

Saretsky said Emirates would meet WestJet's standard for a partner, in terms of "high quality brand names that people recognize."

WestJet flew fuller planes in November than a year before, filling an average of 77.7 per cent of seats, an increase of 1.8 percentage points.

It also saw traffic jump 17.9 per cent on a capacity increase of 15.3 per cent, with 117,000 more people flying the airline.

Air Canada filled an average 74.8 per cent of seats last month, including on Jazz, about the same as the year before. Traffic rose 7.5 per cent on a 7.3 per cent capacity increase, driven by more efficient aircraft use.

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