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Old 17th May 2005, 21:37
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jumpy737
 
Join Date: Nov 2004
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I would disagree. The contract in place for Transat is just that, a contract. In a couple of years Transat could replace WestJet with their own equipment or contract it out again to another company. A situation with Zoom would ensure that WestJet has a steady and expanding charter business for some time to come. The situation at WestJet would be pretty grim right now without the Transat flying and the income that it provides. The last quater's loss would have been much deeper and future profit share would be diminished. WestJet needs to show growth over the long-term for shareholder growth and employee moral and I would think they would be looking at these kinds of mergers to keep the growth going. There isn't much more growth within Canada and the transborder growth has only been good in select markets. The only way to grow within Canada is if WestJet gets a smaller plane to provide feed from smaller markets. So far Clive has said publicly that this will not happen so the question is how do you grow. You either grow independantly or you aquire other companies and sometimes the latter makes more sense.
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