Swoop, Westjet's ULCC offshoot, has placed its fourth aircraft into service--a three-year-old Boeing 737-800 that continues the pattern of building the subsidiary's fleet with some of WestJet's youngest aircraft.
The new aircraft, C-FONK, was originally delivered to WestJet in October 2015. It joins three other 737s delivered between April and July 2015 and transferred to Swoop this year, Aviation Week Fleet Discovery data show. The ULCC launched June 20.
Calgary-based Swoop will use new aircraft to support previously announced seasonal service between Abbotsford and Winnipeg. Swoop, which recently announced its first transborder routes, plans to be operating six aircraft by year-end and 10 by fall 2019. The primary factor in how fast it can expand is how quickly it can add aircraft, and CEO Ed Sims says WestJet is looking at adjusting those plans.
The carrier may accelerate the delivery of aircraft into Swoop and take the full advantage of the ULCC's lower-CASM platform, Sims said on a recent earnings call. "We obviously have reconfigurations in the higher-density to consider. But we're actively looking to see if can we grow faster from the six to ten aircraft that we've already foretold," he says.
Swoop's aircraft are 189-seat, single-class 737-800s transferred from WestJet and reconfigured to the low-cost carrier's brand. The mainline carrier operates a 123-aircraft fleet, including 44 737-800s. WestJet owns 20 of its 737-800s (plus the four now with Swoop, technically under leases)--a sub-fleet that averages about four years of age per aircraft. Its leased aircraft are considerably older, average close to 10 years of age, Aviation Week data show.
The mainline carrier plans to take delivery of six 737-8s next year and has leases expiring on six 737NGs. Executives have pointed to the leases as tools they can use to manage capacity--flexibility that extends to Swoop. If mainline lift is needed, WestJet could still ramp up Swoop's fleet without cutting into overall growth plans by renewing some leases, for instance.
WestJet plans to grow Swoop to as many as 40 aircraft, and its cost target for the ULCC is 30-40% below mainline expenses. WestJet's CASM-ex fuel and profit sharing for the first half of the year was C10.44 cents, or about eight U.S. cents.
Ramping Swoop up more quickly will mean reaching this cost target sooner, as the operation will be able to spread its fixed costs over a greater number of seat miles. Relying on younger aircraft should help, as the carrier will benefit from a longer maintenance honeymoon.