WestJet - Strategic Analysis and Outlook Report (2026)

WestJet Airlines is the Calgary-based carrier. A combination of strategic partnerships and fleet modernization is reshaping its competitive standing, even as financial headwinds present ongoing challenges.

Let’s analyze the airline in detail.

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Table of Contents

• Operational Excellence: A Remarkable Turnaround

• Financial Position: Navigating Leverage Challenges

• Fleet Modernization and Cabin Enhancements

• Strategic Partnerships: Strengthening Global Conne …

• Network Expansion: Building International Reach

• Labor Relations and Operational Challenges

• Outlook for 2026 and Beyond

• My Final Thoughts

Operational Excellence: A Remarkable Turnaround

WestJet’s operational performance trajectory throughout 2025 represents one of the most significant turnarounds in recent North American airline history. The carrier achieved a milestone in October 2025, posting an 84.66% on-time performance (OTP) rating that placed it first among North American carriers, according to Cirium analytics.

This achievement becomes more striking when contextualized against the airline’s performance just over a year prior, when WestJet was posting approximately 71% on-time arrivals across nearly 192,000 flights, positioning it near the bottom of major North American carriers.

The progression throughout 2025 demonstrated consistent month-over-month improvements, with September already showing strong momentum at 84.5% OTP before October’s record-breaking performance.

The operational discipline required to maintain such performance levels across WestJet’s network, which spans major hubs in Calgary, Toronto Pearson, and Vancouver, reflects systematic improvements rather than temporary gains.

According to industry data, April 2025 marked a turning point, with the airline ranking fifth among the most on-time major North American carriers, establishing a foundation for subsequent improvements.

2025 OPERATIONAL HIGHLIGHTS

Total Passengers Carried: 22.6 million
Total Flights Operated: 215,397
Destinations Served: 139
Inaugural Flights: 36
Peak Month: August 2025
October OTP: 84.66% (1st in North America)

Leadership under CEO Alexis von Hoensbroech, who joined WestJet in February 2022, has emphasized shared accountability across operations and schedule discipline as foundational principles.

Von Hoensbroech, whose background includes a physics PhD from the Max Planck Institute and sixteen years in senior roles at Lufthansa Group, has consistently credited operational teams for the carrier’s performance gains, fostering a culture that treats reliability as non-negotiable.

Financial Position: Navigating Leverage Challenges

While operational metrics tell a story of improvement, WestJet’s financial position presents a more complex picture that warrants careful analysis by aviation industry professionals.

Both Fitch Ratings and S&P Global Ratings revised the carrier’s outlook to negative in mid-2025, citing increased leverage and near-term demand softness.

Source: S&P Global Ratings and Fitch Ratings

According to Fitch’s June 2025 analysis, WestJet’s leverage increased due to weaker margins and higher lease-related charges. The carrier has heavily engaged in sale-leaseback transactions in recent years, raising significant liquidity through and beyond the pandemic period.

However, this strategy drove up lease-related charges, with lease liabilities rising to CAD 3.5 billion at March 31, 2025, from CAD 2.2 billion at year-end 2022, partially attributable to the weak Canadian dollar.

The revenue forecast for 2025 stands at approximately CAD 7.132 billion, with EBITDA expected at CAD 929 million, representing a temporary decline from 2024 levels. Rating agencies anticipate recovery beginning in 2026, with EBITDA projected to reach CAD 1.146 billion by 2027 as refurbished aircraft return to service and network expansion initiatives gain traction.

Fleet Modernization and Cabin Enhancements

WestJet’s largest-ever aircraft order, announced in September 2025, signals long-term commitment to fleet renewal and capacity growth.

The order includes 60 Boeing 737-10 MAX aircraft (with options for 25 additional units) and seven Boeing 787-9 Dreamliners (with options for four more), with deliveries extending through 2034. This order will double the carrier’s widebody fleet and raises its overall order book to 123 aircraft with 40 options.

The strategic timing of this order reflects WestJet’s confidence in long-term demand recovery and positions the airline to replace aging narrow-body aircraft while expanding long-haul capabilities.

The carrier currently operates seven 787-9 Dreamliners, which connect Canadian travelers with destinations across Europe, Asia, and Latin America. The additional widebody capacity will support continued international network expansion.

Parallel to fleet expansion, WestJet launched a comprehensive cabin reconfiguration program affecting 43 Boeing 737-800 and 737 MAX 8 aircraft, with completion targeted by year-end 2025. The upgraded interiors feature:

CABIN CONFIGURATION DETAILS

Premium Cabin: 12 seats (2-2 configuration)
- Same model as 787-9 Dreamliner fleet
- Ergonomically contoured cushions
- Reclining backs with large adjustable headrests

Extended Comfort: 36 seats
- Additional legroom
- Adjustable recline capability

Economy Class: Standard seating
- Maintained affordability positioning

Connectivity: Free Starlink WiFi for WestJet Rewards members

This cabin enhancement program addresses product differentiation needs while maintaining WestJet’s value-oriented positioning.

The addition of Premium seating to previously all-economy aircraft creates revenue diversification opportunities, particularly valuable as the airline expands international operations where premium cabin demand typically runs higher.

Strategic Partnerships: Strengthening Global Connectivity

October 2025 marked a transformative development in WestJet’s ownership structure and strategic positioning.

Onex Partners completed the sale of a 25% equity stake to three major global carriers: Delta Air Lines (12.7%), Korean Air (10%), and Air France-KLM (2.3%). The Onex Group retains 75% ownership and control.

This partnership structure creates multiple strategic advantages:

Transborder Connectivity: Delta’s investment strengthens connectivity between Canadian and U.S. markets, with potential for enhanced codeshare arrangements and reciprocal frequent flyer benefits. The partnership provides WestJet with deeper access to Delta’s extensive domestic U.S. network.

Asia-Pacific Access: Korean Air’s stake facilitates connections between Canada and Asian markets, particularly valuable as WestJet operates 787 Dreamliner service to Asian destinations. This partnership can optimize connecting traffic flows through Vancouver and other Western Canadian gateways.

European Network Integration: Air France-KLM’s participation creates opportunities for improved European connectivity through transatlantic route coordination and potential joint commercial initiatives.

These equity partnerships represent a more integrated approach than traditional codeshare agreements, aligning financial interests and creating incentives for operational coordination.

This structure suggests WestJet is positioning itself as a key North American partner for SkyTeam alliance carriers, even without formal alliance membership.

Network Expansion: Building International Reach

WestJet’s summer 2026 network expansion demonstrates aggressive international growth ambitions. The airline announced six new international destinations, with particular emphasis on transatlantic and Latin American markets:

From Toronto:

• Medellín, Colombia (4x weekly)

• Cardiff, Wales (4x weekly)

• Ponta Delgada, Azores (4x weekly)

From Halifax:

• Lisbon, Portugal (pending government approval)

• Madrid, Spain (pending government approval)

• Copenhagen, Denmark (pending government approval)

From Western Canada:

• New Reykjavik (Keflavík) service from Edmonton (1x weekly, June 26, 2026)

• New Reykjavik service from Winnipeg (1x weekly, June 27, 2026)

• Winnipeg transatlantic service return

This network strategy reflects several calculated decisions.

The deployment of Boeing 737 MAX aircraft on transatlantic routes, rather than exclusively using widebody equipment, demonstrates confidence in the aircraft’s long-range capabilities and economics.

Routes such as Toronto to Cardiff and Ponta Delgada target underserved markets with ethnic travel demand and tourism potential, while Halifax’s European expansion leverages that airport’s geographic advantages for transatlantic operations.

The most frequently booked domestic routes in 2025 underscore WestJet’s continued strength in Western Canadian markets:

Labor Relations and Operational Challenges

While operational performance improved dramatically, labor relations remain an area requiring executive attention. Throughout 2025, WestJet navigated union negotiations with flight attendants and faced criticism regarding planned call center outsourcing to El Salvador.

The union representing WestJet flight attendants served notice to begin contract negotiations in September 2025, with negotiations extending into 2026.

Key issues include compensation for unpaid work and broader workplace conditions.

Additionally, Unifor criticized WestJet’s plans to transfer hundreds of Calgary-based call center positions to El Salvador, characterizing this as a betrayal of Canadian workers and potentially impacting customer service quality.

For airline executives analyzing WestJet’s trajectory, these labor dynamics represent both operational and reputational risks. The carrier’s ability to maintain its improved operational performance while addressing workforce concerns will be critical for sustained success.

Outlook for 2026 and Beyond

WestJet’s trajectory through 2026 and beyond presents a study in contrasts.

Operationally, the airline has demonstrated remarkable improvement, achieving North American leadership in on-time performance and systematically addressing historical reliability issues. The strategic partnerships with Delta, Korean Air, and Air France-KLM create genuine network advantages and potentially unlock revenue synergies unavailable to purely independent carriers.

Fleet modernization initiatives position WestJet for long-term competitiveness, with new-generation Boeing aircraft offering improved economics and passenger experience. The cabin enhancement program addresses product gaps that previously limited revenue optimization opportunities, particularly on international routes where premium cabin demand justifies investment.

However, financial challenges persist.

Elevated leverage ratios and near-term EBITDA pressure require disciplined capacity management and cost control.

The weak Canadian dollar amplifies lease liability burdens and complicates international expansion economics.

Rating agencies’ negative outlooks signal that financial performance through 2026 will be closely scrutinized, with particular attention to whether operational improvements translate into sustainable margin expansion.

For aviation industry professionals and executives, WestJet’s evolution offers important lessons about turnaround execution.

The carrier has demonstrated that operational performance can be systematically improved through leadership focus and cultural change.

However, translating operational excellence into financial resilience requires time, particularly when navigating high leverage and currency headwinds.

The 2026-2030 period will test whether WestJet’s strategic investments yield expected returns.

• New aircraft deliveries will require absorption into the network while maintaining cost discipline.

• International route launches must achieve load factor and yield targets to justify allocation of scarce widebody capacity.

• Labor agreements must be reached that balance employee needs with financial sustainability.

My Final Thoughts

WestJet’s competitive positioning within the Canadian aviation duopoly alongside Air Canada remains fundamentally intact, with the carrier maintaining strong presence in Western Canada while expanding Eastern gateway operations.

The strategic partnerships provide tools to compete more effectively in international markets, while fleet modernization ensures product competitiveness.

As we evaluate WestJet’s prospects, the key question centers not on whether the carrier can maintain operational excellence, which appears firmly established, but whether improved operational metrics can be leveraged to drive the financial performance necessary to reduce leverage and restore rating stability.

The answer will unfold over the next 24 to 36 months as new aircraft enter service, network expansion matures, and the benefits of strategic partnerships materialize.