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WestJet exploring used plane market after Boeing delays delivery: CEO

The Canadian Press
   

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One possible source of used planes that WestJet is keen on to fill its unmet demand are the nine Boeing Max 8 planes previously leased by Lynx Air.

WestJet has its eye on a number of used aircraft it hopes to add to its fleet to offset delays on pending aircraft deliveries from Boeing, the CEO of the Calgary-based carrier said.

Alexis von Hoensbroech told a Calgary business audience on May 22 that WestJet is in the market for used planes in the wake of the ongoing situation at the embattled U.S. aircraft manufacturer.

The airline has a firm order for 58 new Boeing airplanes to be delivered between now and 2028, but a door plug blowout on a Boeing Max 737 plane flown by Alaska Airlines in January prompted U.S. regulators to halt a production expansion at the U.S. aircraft maker until an investigation can be completed.

Von Hoensbroech said WestJet remains confident in the safety and quality of Boeing airplanes, but the manufacturer’s challenges are inhibiting WestJet’s own plans to grow its fleet and add new routes.

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“It’s slowing us down right now. We were supposed to receive eight aircraft this year and right now we are down to four (expected) and my best guess is we’ll get probably two,” he said.

One possible source of used planes that WestJet is keen on to fill its unmet demand are the nine Boeing Max 8 planes previously leased by Lynx Air.

Lynx was a Calgary-based discount carrier that shut down in February, a few days after receiving creditor protection and less than two years after launching its first flight.

Von Hoensbroech said he is optimistic WestJet will be able to obtain “at least a share” of those planes.

“We are trying to get through this (Boeing delay) from the used market. And I guess over the next couple of weeks we’ll probably have some news that we’ve been successful,” he said.

“I think we will be able to deliver the growth that we have foreseen.”

Last month, United Airlines said a deal with Boeing would provide the carrier with “credit memos” for future purchases to compensate for financial damages done by a three-week grounding of its 737 Max 9s and rescheduled deliveries.

Credit memos are written acknowledgments that the buyer is owed money back.

On May 22, Von Hoensbroech said “the public space” is not the place to discuss any compensation agreements that WestJet may have with the aircraft supplier, but suggested the carrier has not been left entirely hanging.

“You can expect that the contracts that we have with Boeing would always cater to the eventuality that the airplanes have been delivered late,” he told reporters.

Von Hoensbroech added he recently personally met with Boeing executives and walked the firm’s entire production line in Seattle to better understand what is going on with the company.

“I can say with utmost confidence, they make really great airplanes — and they know where they screwed things up,” he said.

“They do have to fix a couple of things on their production line, there’s no doubt. And I’d rather them take a slower pace than have them not fixing the problems that they have.”

Von Hoensbroech also took the opportunity on May 22 to call for a full federal government review of the way airports and aviation infrastructure in Canada are funded. The WestJet CEO said Canada’s “user pay” model for aviation infrastructure needs rethinking in light of ongoing public concerns about air travel affordability.

Currently, Canada’s major airports are all operated on federally owned lands by private, not-for-profit organizations that pay rent to the federal government based on a proportion of their revenues.

Airports earn money by charging fees to airlines, to businesses such as restaurants, and to passengers through ticket surcharges such as “airport improvement fees.”

Von Hoensbroech said these charges drive up the cost of flying in Canada, as do federal taxes on airfares, security surcharges and other mandatory fees that are currently tacked on to the price of a plane ticket.

WestJet believes the federal government should freeze aviation-related surcharges and fees and stop collecting airport rents in order to make travel more affordable.

“When millions and millions of Canadians have no way to travel except by air, I think it’s a reasonable ask,” he said.

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