When he first became CEO of WestJet in April 2010, one of Gregg Saretsky’s first initiatives was to enter into code-sharing arrangements: strategic partnerships that would allow WestJet to sell seats on other airlines’ flights, as well as handle check-ins, issue boarding passes and seamlessly transfer passengers and luggage. It was a means for WestJet to elbow its way into some of Air Canada’s lucrative overseas business. As Saretsky recalls, the Street was very interested in what the value of those partnerships would be, so he gave them a number to chew on: $100 million in the first three years.
The result? “We completely blew everyone’s expectations out of the water, to the point where we don’t make that figure public anymore,” Saretsky says. He will admit that, on a typical day, somewhere between two and three thousand guests transfer onto WestJet flights from its eight code-share and 24 interline partners.
Much like this signature initiative, Saretsky himself has surpassed expectations since taking over the top job from founding CEO Clive Beddoe. The even keel of Saretsky’s voice and temperament convey a steady-as-she-goes hand on the helm, but his sharp features belie his competitive edge. Saretsky has consistently exploited every opportunity he’s found to WestJet’s advantage, and the market has taken notice: the company’s stock has doubled in value since he took the job, and now hovers in the range of $25 per share.
The airline is poised to keep growing. Its new regional carrier, Encore, began service this year with four Bombardier Q400 turboprops, and will add roughly one aircraft to its fleet every month through to 2015. And in September Saretsky made the biggest purchase in WestJet’s history: $6.3 billion for 65 Boeing 737 MAX aircraft.
Saretsky’s board of directors, needless to say, is thrilled. Perhaps more important, so are his employees, all of whom are owners. Though Saretsky had never worked in an employee-owned firm before, he understood the structure’s importance—and advantages—immediately. Before launching Encore he put the entire business plan to a vote of the company’s 9,000-plus employees, and got 91% support. “In an industry like this one, where competitors fly the same planes on the same routes at the same price points, you really are competing on culture,” he says. “This is a low-margin, capital-intense, tough business. And only an employee-ownership structure can truly provide the kind of service-oriented culture that can compete and win.”