WestJet: The Pearson Decision

In early 2003, WestJet's management was reviewing its plans for growth, and specifically considering whether WestJet should move its eastern Canada base of operations from Hamilton's Munro airport to Toronto Pearson airport. WestJet had grown rapidly since its launch in 1996, and was now the second largest airline in Canada. WestJet had originally focused on Western Canada, but had entered eastern Canada in March of 2000, with an eastern base of operations in Hamilton, a secondary airport in the greater Toronto area. Pearson was Canada's largest domestic and international airport, the primary commercial airport for the greater Toronto area, and a hub of WestJet's largest competitor, Air Canada. Compared with Pearson, Hamilton was less congested and charged much lower fees. WestJet's operations had been closely modeled upon Southwest Airlines. The use of a secondary airport such as Hamilton as a base of operations was consistent with Southwest's low cost, high utilization features. With higher costs and longer turnaround times due to congestion, a base at Pearson was arguably not consistent with the Southwest business model, however, it was hard for WestJet to ignore the growth potential.