This article from NYTimes.com has been sent to you by psa188@xxxxxxxxx /-------------------- advertisement -----------------------\ THE DREAMERS - IN SELECT CITIES FEBRUARY 6 Set against the turbulent political backdrop of 1968 France when the voice of youth was reverberating around Europe, THE DREAMERS is a story of self-discovery as three students test each other to see just how far they will go. "Pure Bertolucci," proclaims The New Yorker. THE DREAMERS makes its North American premiere at the 2004 Sundance Film Festival. http://www.foxsearchlight.com/thedreamers/index_nyt.html \----------------------------------------------------------/ Discounter From Out West Is Gnawing at Air Canada January 30, 2004 By BERNARD SIMON TORONTO, Jan. 29 - As a captain with WestJet Airlines, Allen Byl estimates that his salary is about one-third less than that of his counterparts at Air Canada. The only place outside Canada he occasionally spends a night is Cancún, and chances are slim that he will ever command a plane bigger than a Boeing 737. Yet Mr. Byl has no desire to fly for a different airline. "I don't think anyone comes here for the money," Mr. Byl said in a telephone interview from his home in Calgary, Alberta, where WestJet is based. "It's the way we do things and the way we work together." The way WestJet does things is sending fissures through the Canadian air travel model. Started by four Calgary entrepreneurs in 1996, WestJet is by no means the first airline to take on Air Canada, by far this nation's biggest. But Air Canada, based in Montreal, has either swallowed or crushed all previous comers. Much has changed in recent years. Like full-service airlines in many other countries, Air Canada has had to re-examine the premises of its business model. Burdened by high costs and heavy debt, it sought court protection from its creditors last April, and is now in the throes of a restructuring. Its fleet has shrunk by a quarter, and it has laid off thousands of workers. Air Canada registered a loss of 1.1 billion Canadian dollars ($830.1 million) in the first nine months of 2003. A new flock of low-cost carriers, with WestJet at the fore, are now gnawing at Air Canada's business. According to the transportation department in Ottawa, Air Canada's share of domestic seat capacity shrank to less than 60 percent at the end of 2003 from as much as 87 percent at the beginning of 2000. During the same period, WestJet's share grew from 5.5 percent to 24.6 percent. The other fledgling carriers, like Jetsgo of Montreal and CanJet Airlines, based in Nova Scotia, together have doubled their share of capacity to 15.5 percent. "Twenty years ago, the sentiment was that if you didn't take Air Canada, you might be taking a bit of a chance on the safety front," said Warren Everson, vice president for policy and strategic planning at the Air Transport Association of Canada. "That doesn't exist any more." Mr. Everson said that Canadians still show "enormous loyalty" to Air Canada when they travel abroad. But on domestic routes, he said, "There's been an increasing carelessness about which carrier you fly." WestJet is closely modeled on Southwest Airlines of Dallas, with a sharp eye on costs and an informal corporate culture. It flies only Boeing 737's, does not transfer passengers' baggage to other flights and has no business class. The airline has posted a profit for 28 consecutive quarters, with net income of 60.5 million Canadian dollars ($46.7 million) in 2003. WestJet's unit costs were 10.4 Canadian cents a seat mile in the fourth quarter, compared with about 18.5 cents at Air Canada. "Our costs will remain almost half of theirs and continue to decline," Clive J. Beddoe, WestJet's chief executive, told analysts last week. Like Southwest, WestJet has developed its own personal, informal mood. "Compared to Air Canada, the culture is vastly different," said Gerard Seijts, an assistant professor at the Richard Ivey School of Business, part of the University of Western Ontario. According to Mr. Seijts, who uses WestJet as a case study in his classes on organizational behavior, WestJet's culture is "spunky and enthusiastic." With no unions, he said, "There's a lot of peer pressure to do what's right for the company." WestJet's pilots and flight attendants regularly entertain passengers - called guests - with songs and jokes. One recent onboard announcement went like this: "In the unlikely event of a loss of cabin pressure, the panels above your head will open, and the cabin attendants' phone numbers will fall out." In a recent survey by KPMG and Ipsos-Reid, 255 chief executives chose WestJet as Canada's second "most respected" corporation, up from the No. 7 spot in 2002. The Royal Bank of Canada, the country's biggest financial institution, took first place. Mr. Beddoe, 56, who is also one of WestJet's four founders, said in an interview that his airline faced a bigger challenge than Southwest in containing costs because of Canada's relatively sparse and widely scattered population. For instance, on its busiest route, between Calgary and Vancouver, WestJet offers 11 round-trip flights a day - including two that make other stops. In contrast, Southwest offers 29 round-trip flights on weekdays between Dallas and Houston. WestJet has sought to overcome that cost disadvantage by paying lower salaries, but offering relatively generous profit-sharing and stock purchase arrangements. Employees can spend up to 20 percent of their salaries on WestJet shares, with the company matching their purchases. "It's pretty hard to lose on that deal," said Mr. Byl, the pilot. The airline's stock has risen more than sixfold since it went public in 1999. It gained 2.4 percent Thursday, to 28.35 Canadian dollars on the Toronto exchange. Currently, 87 percent of WestJet's 3,700 employees own shares; they spend an average of 13 percent of their salaries on stock purchases. As WestJet grows, it is making some compromises on its original strategy. It announced this month that it would move its main hub in the busy southern Ontario market from a small airport in the steel-making city of Hamilton, about an hour outside Toronto, to Toronto's international airport. The airline hopes that higher traffic will offset a significant increase in landing fees and other operating costs. It is also installing satellite TV on its planes, and giving passengers a couple of more inches of leg room. With WestJet's route network expanding in central and eastern Canada, its flights have become longer, raising costs over which it has little control, like fuel. Scheduled service to the United States is in the pipeline. "All the regulatory approvals are in place," Mr. Beddoe said, declining to say where WestJet would fly. The timing, he said, will depend on the extent to which domestic business is opened up by Air Canada's shifting its focus to international routes. John Reber, an Air Canada spokesman, said that "it doesn't make business sense to pursue market share growth" in Canada, meeting the no-frills competition head on. He added, however, that the airline "is not reducing in any fashion our business in the domestic market." Mr. Seijts noted that WestJet's offbeat culture could become a victim of the airline's growth. "If the company is getting another 5,000 employees across the country, will the people still be as enthusiastic?" Mr. Seijts said. The move from Hamilton to Toronto, he said, "is away from the original business model that makes them great." And WestJet, like Air Canada, faces a tougher market as other low-cost start-ups arise, he said. Responding to such concerns, Mr. Beddoe said that the carrier's continued success is "very much a function of who you hire and how intolerant you are of people who don't fit the culture." All four of WestJet's founders still work for the airline. About 1,000 job applications come in each week, and filling each job takes an average of 18 hours of interviews, Mr. Beddoe said. "We're very selective about whom we hire." http://www.nytimes.com/2004/01/30/business/worldbusiness/30westjet.html?ex=1076473470&ei=1&en=ab7cbabc3342a736 --------------------------------- Get Home Delivery of The New York Times Newspaper. Imagine reading The New York Times any time & anywhere you like! Leisurely catch up on events & expand your horizons. Enjoy now for 50% off Home Delivery! 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