10 July 2008

Southwest planning first international flights

With a new deal with CanadaÃ¢â¬â¢s WestJet, Southwest Airlines is planning its first international service.

Southwest said it has taken the first step toward striking a so-called code-sharing agreement and planned to announce schedules and other features of the WestJet partnership by late next year.

The agreement is subject to review by US and Canadian regulators.

The proposed program will use a code-sharing agreement.

Southwest Chairman and Chief Executive Gary Kelly has often talked about offering service to nearby international destinations using a partner airline.

"We are confident that we've found a perfect fit with WestJet, and we are excited to work toward opening our expansive US network to include Canadian destinations," he said in a statement.

The two airlines have similar histories, pointed out the AP.

Southwest started in the 1970s ferrying passengers around Texas on three planes. It later expanded to both coasts and now serves 64 cities with about 3,400 daily flights and 34,000 employees.

Dallas-based Southwest has never offered international flights, and a code-sharing service to Hawaii ended when partner ATA Airlines failed.

WestJet was created as a regional carrier serving five cities in western Canada and has expanded to 49 locations in Canada, the United States, Mexico, and the Caribbean. Like Southwest, it uses Boeing 737 aircraft.

WestJet CEO Sean Durfy called the Southwest deal "a defining moment for WestJet." He said an agreement would significantly improve the reach of both airlines. It should also generate new revenues for each participant.

Report by David Wilkening

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Winning by breaking the rules

Southwest pioneered the low-cost model, a formula that has been repeated all over the world, in some cases with spectacular success. Until now, offering point-to-point and domestic flights only has been one of the key principles of a successful low-cost cost operation. Obviously this avoids a lot of complexities and costs. The only problem with this policy was that the massive value of combined route networks remained untapped. But with two leading low-cost airlines deciding its time to break the rules other carriers might soon be following their example. The challenge will be to connect without infusing new complexities and costs. Dohop's Connection Platform is a solution that's now being considered by a number of low-cost carriers. It will be interesting to see how other low-cost carriers react to the Southwest - WestJet announcement. If connections are becoming part of the low-cost model then it can only mean more market share will be going their way.

By frosti sigurjonsson, Friday, July 11, 2008