WestJet’s CEO talks rising air travel costs, new ultra-low fare & Boeing’s woes

The high cost of air travel in Canada – and one airline’s response – made headlines last week as WestJet’s CEO Alexis von Hoensbroech publicized measures that he hopes will bring down travel costs.

For starters, there’s a new low-fare category that WestJet will soon launch. This is for budget-conscious travellers who want to fly at cheaper prices and are fine with forgoing carry-on bags.

Then there’s the new policy recommendations WestJet has sent to the federal government. Among them is a demand to freeze mandatory imposed government fees, charges and policies that increase the cost of travel.

READ MORE: WestJet to unveil new fare for travellers willing to fly without carry-on

The airline is calling for a review of Canada’s user-pay system for aviation infrastructure and, notably, wants Ottawa to stop collecting airport rents.

“We operate in a very expensive and user-paid infrastructure environment that significantly drives up ticket prices for the everyday Canadian and hinders competition,” von Hoensbroech said in a press release last week.

O (expensive) Canada 

The CEO explained his position further in a Q&A with CBC’s Loren McGinnis that was posted Sunday (May 26).

In the interview, he says Canada is “more expensive than in many other countries” because of its vast size and high infrastructure costs, which includes rising fees for airports, security, and air traffic control, plus associated taxes and fees controlled by the government.

The government’s current system is only driving up ticket prices, said von Hoensbroech. 

Meanwhile, the rent Ottawa collects on airports is almost half a billion dollars per year, the CEO said, saying how this money is going to the federal budget instead of being used to actually improve airports and lower fees (which would, in turn, lower ticket prices).

“This is actually a subsidy if you want to call it so, from the travellers to the government because this money just goes into the federal budget. It’s not supporting infrastructure,” von Hoensbroech told CBC. 

New reduced-fare category

As for WestJet’s new ultra-low pricing tier, which is set to launch in a couple of weeks, it’s all part of a plan to get ticket prices as low as possible and provide customers with more choices, von Hoensbroech said. 

Those who purchase WestJet’s new reduced fare – an option that’s already used at ultra-low-cost carriers like Flair Airlines – will have less legroom and will not have access to overhead bins on the airline’s aircraft. 

READ MORE: WestJet to densify cabins, serve “broader spectrum of guests” following Swoop closure

“We have very different types of passengers…we have passengers that actually are guests [who] want a premium service or want premium seats and want lots of flexibility and then they get it, but obviously at the higher ticket price. And then we have other guests that actually want the lowest possible transportation,” von Hoensbroech told CBC.

It’s a model von Hoensbroech began hinting at last year when the integration of Swoop, WestJet’s now-defunct low-cost carrier, took place. In April 2025, Sunwing Airlines, which WestJet now owns, will undergo a similar process.

READ MORE: Swoop shutdown will expand low-cost reach to “broader network,” says WestJet CEO

The integrations of both airlines will result in aircraft reconfigurations – a move that will densify cabins to distribute costs across more seats.

As PAX first reported, WestJet’s 737-800s and MAX 8s, including legacy WestJet, Sunwing and Swoop planes, will be reworked to feature 180 seats – up six seats from the current configuration – including 12 Premium seats.

WestJet’s Max 10s – there are 70 on order for the next five years – will also add 13 seats, totalling 212.

The idea is to not segment customers by airline, like WestJet did with Swoop, but segment them within the aircraft.

High hurdles

It also isn’t the first time von Hoensbroech has highlighted the challenges (and high costs) that come with running an airline in Canada.

Speaking at a luncheon hosted by the Toronto Region Board of Trade last October, the CEO, who is from Europe, said he was “surprised” to see how expensive it is to provide air travel in Canada.

Citing high airport fees and taxes, he shared an example of how a flight from Calgary to Toronto will ding $160 in charges “before you actually reach your seat on the airplane.”

READ MORE: WestJet CEO wants Ottawa to freeze ticket fees, stop collecting airport rents

Add the cost of fuel, and “the first $300 is being spent before you actually start paying pilots, flight crew, aircraft and so on,” he said.

“This is a pretty high hurdle,” the CEO said at the time. “If you see an airline offering you a $59 ticket across the continent, then you know one thing: this airline will be far better off handing you out $59 for not flying and taking you aboard. That’s a fact.”

von Hoensbroech summed up this “user-paid system” as a “choice” the Government of Canada has made.

“You hear about the $35 airport improvement fee. [However], the one thing they don’t do with airport improvement fees is improve the airports because [airports] have to use this money to pay rent, pay down debt and interest rates,” von Hoensbroech said.

As for Boeing…

In his interview with CBC, von Hoensbroech also addressed WestJet’s deal with Boeing to buy 42 737 Max 10 jetliners and Boeing’s ongoing safety, PR and financial woes.

The CEO recently returned from Boeing’s production line in Seattle, met with the executives, “and I think they have a very good understanding on what is not well in their production. And they are fixing this from the very root cause,” he said.

READ MORE: Boeing posts $355M loss amid ongoing safety concerns

Boeing’s problems, however, are slowing down aircraft deliveries, which is “causing an issue,” von Hoensbroech said.

Still, the CEO commended Boeing for producing “great” and “safe” airplanes, noting that WestJet is flying more 140 of them right now.

“Every two minutes, one of these planes takes off or lands somewhere,” he told CBC. “And these are all great and wonderful and safe airplanes that are well manufactured and well maintained by our maintenance team.”

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