February 1, 2018 / 10:56 PM / 7 months ago

UPDATE 1-WestJet's Swoop to take flight in Canada, announce new routes in June

(Recasts with planned U.S. flights, adds comments by airline executive, other details)

By Allison Lampert

MONTREAL, Feb 1 (Reuters) - WestJet Airlines Ltd’s new ultra low-cost carrier will in June launch weekly flights in Canada and announce new trans-border routes, in a move aimed at attracting budget-conscious Canadian passengers both inside the country and away from U.S. rivals, a company executive said on Thursday.

WestJet, Canada’s second-largest airline, last year announced the planned launch of its ultra low-cost carrier, Swoop. On Thursday, it fleshed out details of the separate no-frills carrier.

Swoop will target the equivalent of 40 planes a day of Canadians who fly out of U.S. border airports in the winter to destinations like the southern United States and Mexico, Bob Cummings, WestJet’s executive vice-president of strategy, said in a phone interview.

“The opportunity for us with respect to the southern flying is significant,” he said.

Earlier on Thursday, WestJet said Swoop will launch 12 weekly domestic flights in Canada starting on June 20, with additional routes to be added during the summer.

Swoop’s cross-border strategy comes as U.S. ultra low-cost carriers are already facing pressure on fares amid increasing competition for the business of economy-minded passengers.

Canadian carriers have long struggled to compete with their U.S. rivals on ticket prices because Canada charges significantly higher fees and taxes on air travel.

Cummings declined to give a target for how much cross-border traffic Swoop aimed to swipe from U.S. rivals.

Average Swoop fares will be 30 percent lower than WestJet’s regular economy fare, said Cummings. Passengers are expected to pay extra for items like food, additional leg room and bringing baggage on board.

Cummings would not disclose expected margins for Swoop.

While Swoop could attract passengers from larger rival Air Canada’s leisure line Rouge, AltaCorp analyst Chris Murray said by email he does not “expect much near term pressure given the scale for now and the route network.”

Starting in June, Swoop will charge base one-way ticket prices for domestic flights that cover a seat and a small personal item for between C$39 and C$99 ($80.69), the company said. ($1 = 1.2269 Canadian dollars) (Reporting by Allison Lampert; Editing by Bill Rigby and Matthew Lewis)

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