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WestJet to launch regional carrier

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WestJet Airlines Ltd. (WJA-T) plans to start a short-haul regional carrier for flights to and from smaller Canadian cities next year by acquiring 40 turboprops, marking the company's first move away from Boeing 737 jets.

WestJet chief executive officer Gregg Saretsky called it a crucial decision for the airline, which launched operations in 1996.

The company will unveil further details to employees, dubbed WestJetters, at a town hall in Calgary on Monday and other meetings this month.

"We are meeting with WestJetters throughout January to get their input on this watershed decision," he said in a statement. "One of the cornerstones of our success is engaging with employees early on in key decisions and I am confident they will see the strategic value of this initiative. Once our employees have had the opportunity to share their input, we will be in a better position to make a sound decision rooted in employee feedback and engagement."

Saretsky said in an interview last month that WestJet is considering acquiring the 70-seat Bombardier Q400 turboprop, though the ATR 72 turboprop is also a possibility.

"A short-haul aircraft combined with WestJet's brand, balance sheet strength and low-cost structure will allow WestJet to profitably accomplish four main goals: Introduce WestJet's friendly and caring service to many smaller communities who have asked for our service; optimize the size of aircraft to efficiently increase frequency; create new connections between existing WestJet markets; and build additional feed to our current 71-city network so that we can continue to profitably grow and add shareholder value."

WestJet chairman Clive Beddoe welcomed the shift to regional service. "This new airline, powered by our low-cost model and strong corporate culture would greatly benefit the guests we serve, their communities and our shareholders. Our single fleet of Boeings will be joined by a sister company operating a single fleet of turboprops to maintain maximum efficiencies for both airlines," Beddoe said.

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