LCC airline news: AirAsia bid draws scrutiny; WestJet goes upscale; M&A potential
There are two items of note for low-cost carriers that we find interesting:
- AirAsia’s bid to buy Batavia Air looks like it is to become a political football, according to this article in the Wall Street Journal.
- Canada’s WestJet is adding premium coach class to its long-standing single-class service. We find this one particularly interesting.
Then there is this analytical piece from Seeking Alpha about a variety of potential mergers.
Categories: Airlines
AirAsia, Alaska Airlines, Batavia Air, US Airways, WestJet
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Leeham News and Comment
- Video interviews with Emirates’ Clark, Delta’s Anderson May 24, 2013
- Odds and Ends: Who’s John Wayne? Air Show musings; Restoring the Dornier 17 May 24, 2013
- Odds and Ends: Dominating Wide-Bodies; Trying to save the 747-8; Delta waits; China OKs 787 May 23, 2013
- Boeing’s McNerney: Interest in 787-10, 777X high; “our airplanes are better than theirs” May 22, 2013
- Odds and Ends: Boeing ponders 787 rate hike; A350 fly-by at PAS?; EMB wins order for E-Jet May 21, 2013
WestJet is obviously changing its business model. They introduce a new Premium Economy; but they do this at the expense of Regular Economy. Im not sure if that is a wise move. Intuitively I would say it is not. If it’s not broken, don’t fix it!
WestJet had considerable success with the previous business model and I can’t see the pertinence of changing it. But this could also be interpreted as a preemptive move towards Air Canada, which is expected to create shortly a new LCC with A319 and E-Jets initially, but which would be replaced by CSeries aircraft later on.
In that context the WestJet new Premium Economy would be more attractive than the current offering. But on the other hand, with the CSeries Air Canada would offer considerably more comfort than the 737 Regular Economy on WestJet.
So if Air Canada does create a new LCC and operates it with the CSeries it will be difficult for WestJet to continue to prosper at the same pace it has been enjoying since it was created in 1996.