WestJet has filed for government approval to fly to China, CEO Gregg Saretsky told the Greater Vancouver Board of Trade (GVBOT) June 1.
Seeking that approval was expected given that the airline announced May 2 that it would buy at least 10 Boeing 787 Dreamliner aircraft and as many as 20 of those long-haul planes, with delivery starting in 2019.
Executives had gone on record telling Business in Vancouver that flights between Vancouver and China would be a “natural” were the airline to buy those planes.
“Service between Canada and foreign jurisdictions is governed by bilateral agreements between the governments of those jurisdictions, so today we announced that we have filed for a designation to serve China,” Saretsky told Business in Vancouver after his speech to the GVBOT.
“Today is the beginning of a rather lengthy regulatory process but we’ve fired the pistol now, at the start line, and we’re anxious to see how quickly we can get through all of those things to make [flying to China] a reality.”
WestJet’s application is to the Canadian government. If the Canadian government approves the application, Ottawa will then “invite the Chinese to also approve [WestJet flying to China,]” Saretsky said.
Curiously, Saretsky would not specify which Canadian cities his airline would first launch China-bound flights if it gained all necessary approvals.
“We’re going to keep that close to our vests,” he said. “Obviously, it is competitive and we wouldn’t want anybody else to do anything to maneuver their own capacity around to make our entry more difficult than it would otherwise be,” he said.
“It could be any city. You heard me say these beautiful 787s can make it anywhere in the world from anywhere in Canada.”
WestJet may launch China-bound flights from many Canadian cities simultaneously, Saretsky said.
His optimism that the Canadian government will approve WestJet’s application stems from what he said was the Canadian government’s goal of doubling the number of Chinese inbound tourists to Canada by 2022.
He would not speculate on how long the approval process could be but he said that it is possible that it could take until 2019.
In addition to flights to China, WestJet has plans for other long-haul flights.
Saretsky showed a map of the world to the GVBOT audience with potential future routes stemming out of cities, such as Vancouver, to Sydney, Australia; Auckland, New Zealand; and New Delhi, India.
Saretsky would not reveal what non-Chinese long-haul routes he would prioritize but said the key would be for the route to make money.
“We have worked for 21 years to become an investment-grade credit [risk,] so obviously we sort those opportunities by how much money, how much profit they will make for WestJet, with the goal of making between 13% and 16% return on invested capital,” he said.
“These [Dreamliner aircraft] are $200 million assets so they have to make 13% to 16% and the priority order in which we will serve all potential destinations will be driven by where we think the economic opportunities are best.”
