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WestJet's 737s: Too big, too small or just right?

WestJet Airlines Ltd. is facing mounting pressure to acquire larger planes for its Hawaii route and smaller aircraft for short-haul flights as its rivals step up service.

Founded in 1996, WestJet has been a disciple of the single-fleet strategy, devoted to workhorse Boeing 737s. WestJet has 95 of the planes, and 40 more are on order over the next seven years.

But some analysts say those Boeing 737s, which seat from 119 to 166 passengers, are misfits on certain routes. The criticism is that the single-aisle planes are too small for leisure service between Alberta and Hawaii, and too big for the Eastern Triangle battleground of Toronto, Montreal and Ottawa.

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Air Canada has been ramping up flights on the Hawaii route with Boeing 767s, which can seat more than 210 passengers. The country's largest airline also on Sunday launched service between Billy Bishop Toronto City Airport and Montreal's Trudeau Airport, deploying 70-seat Bombardier Q400 turboprops. Porter Airlines Inc. also flies the Q400 from its base at the Toronto island airport, which attracts many corporate travellers.

Further competitive pressure will build next winter under Air Canada's plans to launch a discount leisure carrier, which will put the heat on Calgary-based WestJet in markets such as Mexico and the Caribbean.

Hugh Dunleavy, WestJet's executive vice-president of strategy and planning, said having a single fleet served WestJet well in the past, but it's time to seriously evaluate options.

In an 11-week experiment that ended Saturday, WestJet flew a 193-seat Boeing 757 on the Edmonton-Hawaii and Calgary-Hawaii routes. Overcoming mechanical issues that posed problems in the early going, Mr. Dunleavy considers the test run of the leased plane to be a success for expanding WestJet's passenger traffic. "It met our expectations in terms of the attractiveness of the product," Mr. Dunleavy said from Calgary, where on Tuesday the company held its annual meeting.

He oversees a strategic planning group that has been examining different planes, though no decision will be made this year on permanently adding a second type of jet to the fleet. WestJet already flies 737s from Vancouver and Victoria to Hawaii.

Mr. Dunleavy said WestJet doesn't want to be drawn into a "frequency game" against Air Canada and Porter, which are able to schedule more flights with the smaller Q400s between Billy Bishop and Montreal. WestJet flies from Toronto's Pearson International Airport, where it beefed up service Monday against Air Canada.

WestJet executives say the focus on the Boeing 737s has its benefits. Mechanics know the popular jet, referring to the same manuals. And WestJet retains its flexibility in scheduling pilots trained in the 737 cockpit.

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"I think the long answer is that, yes, at some point we will be into another fleet type, but it's not going to happen in 2011," WestJet chief executive officer Gregg Saretsky said during a conference call with analysts.

Mr. Saretsky also played down the threat posed by Air Canada's low-cost carrier plans, saying his rival's new division "could be as big as 50 planes but it could be nothing as well." He added that if there are labour disruptions at Air Canada this summer, WestJet could have extra flights, though it hasn't developed contingency plans. "We'll face that music if and when we have to," he said.

Mr. Saretsky made the comments after WestJet reported a $48.2-million profit in the first quarter, compared with $2.4-million a year earlier. Its share profit rose to 34 cents from 2 cents, exceeding forecasts. Analysts said WestJet has hiked airfares to offset rising fuel bills, and so far, travel demand has held up.

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About the Author

Brent Jang is a business reporter in The Globe and Mail’s Vancouver bureau. He joined the Globe in 1995. His former positions include transportation reporter in Toronto, energy correspondent in Calgary and Western columnist for Report on Business. He holds a Bachelor of Commerce degree from the University of Alberta, where he served as Editor-in-Chief of The Gateway student newspaper. Mr. More

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