Canadian low-cost airline WestJet has deferred delivery of 16 new Boeing 737NGs and agreed to order an additional 14 in order to smooth out its delivery schedule and help give the airline a more flexible fleet plan for the years through 2016.
WestJet has also agreed terms with aircraft leasing company Aviation Capital Group that allow it flexibly to return a number of 737s at the ends of their leases, or renew the leases.
The airline’s revised delivery schedule will see it receiving five more aircraft this year, giving WestJet a total of 86 aircraft in its fleet by the end of the year. In 2010, it will take five new 737NGs and its fleet will grow to 91 aircraft.
The carrier will then take seven new 737s in each of the years 2011 and 2012, increasing its fleet to 105 aircraft by the end of 2012.
In 2013, WestJet will take six more new 737s and has the choice of returning or renewing the leases of up to three 737s, giving it a total fleet size of 108 to 111 aircraft by the end of the year. In 2014, it will receive another six new 737s, upping its year-end fleet total to 114 to 117 aircraft.
Then, in 2015, WestJet will take delivery of 10 new 737s and also can decide whether to return ro renew leases on up to 12 737s, allowing the airline to size its fleet at anywhere from 112 to 127 aircraft.
In 2016, WestJet will receive another eight new 737s, and has the option to return or renew leases on up to another eight aircraft, so its fleet size at the end of the year could be anywhere from 112 to 135 737s. In all, WestJet will receive 54 new 737s and can decide to return or renew the leases on up to 23 other 737s by the end of 2016.
“Thanks to our strong partnerships with Boeing and Aviation Capital Group, we were able to revise our aircraft delivery schedule to better match our strategic plans,” says Sean Durfy, WestJet’s president and CEO.
“Our previously published schedule saw us growing to a fleet size of 121 aircraft by 2013,” notes Durphy. “The combination of deferred delivery dates on our existing orders, 14 new orders and 23 leases expiring between 2013 and 2016 ― each with the option to renew ― gives us the flexibility to end 2016 with a fleet size between 112 and 135 aircraft.”
WestJet says its revised fleet plan aligns with the current and planned launch of interline and codeshare partnerships, the continued rapid growth of its WestJet Vacations business and the airline’s plans to grow its share of Canada’s business-traveller market.
The carrier says it assessed aircraft buying opportunities in the current market and placed the order for the 14 additional aircraft from Boeing, to be delivered in 2015 and 2016, to help offset lease expiries and provide greater fleet flexibility.
With this revised fleet plan, WestJet says its capacity growth is expected to be between 5 per cent and 10 per cent in 2010.
“Our strong WestJet brand and loyal guests provide us with the confidence to keep expanding our network. We believe we will continue to increase our market share profitably,” says Durfy. “It is clear that additional aircraft are needed to meet our strategic growth plans, and we feel comfortable in the capacity and balance-sheet flexibility this improved fleet plan provides.”
Durfy adds: “Orders for new aircraft get placed years in advance of delivery dates and, as we have seen, the economic conditions can change rapidly. Shifting the new aircraft delivery dates allows us to spread our growth out more evenly between 2010 and 2016. It also helps to even out our pre-delivery payment schedule for aircraft deposits and gives us the time and flexibility to make decisions around our financing options for these aircraft. Our goal is to provide WestJet with maximum flexibility and our guests with one of the most modern fleet of aircraft in the world.”