Great. I'll try to give you brilliant and inspired answers, if I can.
Thank you very much, Madam Chair. I appreciate the opportunity and the invitation to speak with you today.
At WestJet we welcome the interests of this committee, any committee, and parliamentarians, of course, in the future of commercial aviation in Canada, an incredible driver of jobs and economic growth. These hearings on the government's global markets action plan and the success of these strategies is timely, given some of the exciting developments at WestJet and the ways in which we are bringing these agreements to life.
The international side of our business is less known than our domestic accomplishments, so I apologize in advance if you feel inundated by statistics.
Bilateral air agreements are helping to create jobs, expand the critical travel and tourism sector, and connect the world to Canada and Canadians to the world. Bringing these agreements to life is the work of strong, entrepreneurial, domestic carriers, and I'll be outlining how we are doing that and the multiple ways in which Canadians are benefiting.
This Friday we'll be celebrating our birthday. At 19 years of age, WestJet and all WestJetters are very proud of our accomplishments and our growth on the ground and in the air: from five destinations and three aircraft in 1996, to 19.7 million guests on our aircraft in 2014. There's a lot to be proud of.
Unfortunately, like on most birthdays, we have to take a bit of a look backwards, but this is a good story. In 2006, we began our international service to Nassau, Bahamas, and since then we've grown significantly. In 2015, we'll have over eight million seats on flights outside Canada: 5.5 million to and from the United States, which you've heard is our largest market for international travel, and 2.5 million to and from other international points. That equals 36,000 flights to and from the United States, about 100 a day in 2015, and 16,000 to and from international points. To put this in perspective, in 2005, 98% of our overall capacity was used on domestic service. In 2015, 30% of our capacity will be deployed on non-domestic routes. The international proportion of our business is expanding and will continue to expand.
These are some quick highlights over the last year on the issue of international travel and WestJet.
In 2014 we saw the very successful launch of our first transatlantic service to Dublin, Ireland, in part made possible as a result of the Canada-EU agreement. This was, and is, one of the most successful services in the history of WestJet. It's over 98% sold, linking St. John's directly to Europe.
Building on that success, we announced that we would begin service between Halifax and Glasgow, U.K. this May, and the resumption of our seasonal service to Dublin. We're proud of our partnership with the Halifax airport, and you'll be hearing from Jerry Staples after me.
Over the course of 2014, we continued to grow our airline partnerships, which is the cornerstone of our approach to international connectivity at the moment, adding 13 interline relationships and two new coach air partnerships with China Airlines and Qantas, to bring us to 35 agreements in total, and I'll come back to this.
In July 2014, we announced our intention to begin flying our own wide-body aircraft for the first time. We selected the Boeing 767-300 for that role and expect to deploy them on routes between Alberta and Hawaii late this year, and in 2016, we look forward to using these aircraft to expand our network into additional overseas markets.
Our growth and investments aren't just a good corporate story for WestJet; they're an excellent economic story for the country. Here are a few examples of how our growth is driving other critical sectors.
We're the only commercial carrier in Canada to do all its heavy maintenance in Canada. You've heard how important these jobs are to Kelowna and Kelowna Flightcraft, the largest private employer in the region. We're proud of that partnership and the jobs we're bringing to that region and also to Windsor, Ontario.
We have a conditional purchase of 45 Bombardier Q400 aircraft manufactured in Toronto. We currently have a firm order of 30 and options for an additional 15. These are some of the highest skilled manufacturing jobs in Ontario, and we're proud of that partnership.
But as important as where those aircraft are made is where they're going to be flying, and that is the story of WestJet Encore. WestJet Encore is designed to service small and medium-sized communities in Canada that either had no service or were being served by one carrier for many decades. The results of WestJet Encore to date have been incredible, to say the least, and I'll get into that, but it's relevant to this committee and your study because of something we call “beyond the gateway access”.
A lot of these communities have only had a single carrier to chose from in connecting internationally.
Here is the story of WestJet Encore. WestJet always had a fleet of 737 narrow-body jets, but this brings us into a different type of aircraft. All of those communities we could not serve profitably with jets we can now serve with Bombardier turboprops. A good example is Fredericton, New Brunswick. We launched service in April with twice-a-day service to Toronto. We're very excited about that. Fredericton was the largest urban area of the country that we had yet to serve, so we're very proud that this is coming up in April. That's just one example.
The demand and lobbying from communities has been overwhelming because communities understand that international access, and lower fares, and competition are key to their economic growth. What this basically means is that international visitors want affordable access to more than the CN Tower and Canada Place. They want to go to Nanaimo, or Brandon, or Fredericton, or Gander. Increased choice and competition in the regional market is going to extend the benefits of bilateral agreements beyond the important hub airports, and we are already beginning to see that.
To break it down a little bit further—back to the statistics I told you about—there are 32 cities in Canada that only have international connectivity with Air Canada Star Alliance, there are 12 cities in Canada that have connectivity offered by multiple carriers, and there are 17 cities in Canada that have international connectivity offered by Air Canada and WestJet combined.
The key point here is that 25% of the total in Canada, were it not for WestJet, if not for us and our alliance partners, would be international monopoly markets for Air Canada. As we expand, other cities will move from the Air Canada Star Alliance monopoly category into the competitive category, and those include Fredericton, Penticton, Gander, and Sydney in 2014 and 2015 alone.
I think you get the point I'm trying to make here, which is that the biggest key to realizing the potential that any agreement creates are strong, profitable, and entrepreneurial airlines. From a bilateral perspective, code-share services are an integral part of our tool kit for growing and sustaining new markets. In any open sky type of agreement, code-share rights are generally unrestricted and provide carriers on both sides ready access to the third and fourth freedom markets by placing their code on any carriers operating between the two countries.
Code-share, as you've heard, is an important economic contributor and is far less risky and more cost effective than launching own-aircraft services, and thus is an easy way to develop a presence in both contracting party countries.
The blue sky policy and the push for open skies agreements in much of the Caribbean has been instrumental in WestJet's success in this region, and we are eternally grateful for those efforts for both own-aircraft and code-share expansion of rights. With the addition of our first wide-body aircraft, we seek to repeat the same successful formula, and bring in lower fares and more choices for air travellers for countries within the continental EU, as well as access to markets in South America and Asia.
The markets that are of great interest to the chief negotiator for further expansion are also on our priority list, and again, our thanks for these efforts to grow access to these important markets.
The Canadian government has been very supportive of our efforts to expand internationally, and continues to accept input in terms of establishing priorities and addressing “doing business” issues within existing agreements.
While there is some capacity not being used, good points have been made about how these agreements are forward looking, and they are negotiated every year, which implies that room for growth must be built in. Furthermore, material access issues like slot constraints sometimes means the unused capacity may not be due to a lack of desire by a carrier, but rather the physical limitation on the ability to exercise those rights.
Overall, Mr. Christie and his team, and Mr. Rioux and his team should be congratulated for their work, and they are supported by WestJetters.
We are encouraged by some of the discussion by this committee over the last few weeks around the policy environment that encourages strong carriers. To this end, the appointment of David Emerson to chair the Canada Transportation Act Review Panel is both well-received and timely for our sector. Our own submission to the panel has recommended that Canada's aviation cost structure both be recognized and be made the number one priority. Tackling this issue, as indicated by the Council of Chief Executives and others, is the single most important recommendation this committee can make with respect to ensuring that bilateral air agreements are providing the strongest economic benefit possible to Canadians.
As you've heard today and over the last few weeks, commercial aviation in Canada is not a stagnant sector. The competition is fierce, as it should be. We welcome the panel's report later in 2015.
I would be happy to take questions from the committee.
Thank you very much.