WestJet president and CEO Sean Durfy, left, shares a laugh with Gregg Saretsky as the two walk into a news conference in Calgary on Tuesday.Chris Bolin Photography Inc.
Gregg Saretsky's phone rang Monday morning with news that would stun the airline industry: After just nine months as a vice-president at WestJet Airlines Ltd., the board of directors was putting him in charge of the entire company.
It was the phone call the 50-year-old industry veteran had been waiting for his whole career, putting him at the helm of a major North American carrier after more than two decades as a senior manager.
But the decision to make Mr. Saretsky chief executive officer of Canada's second-largest airline has come so suddenly that it has shaken up investors, and raised questions about what it means for Calgary-based WestJet.
Jittery shareholders pushed WestJet shares down 4 per cent Tuesday, slicing more than $60-million from WestJet's market value. The selloff followed the announcement late Monday that Sean Durfy, WestJet's CEO for the past 18 months, was stepping aside for "personal reasons" and Mr. Saretsky would take the reins.
The two stood shoulder to shoulder at a press conference in Calgary Tuesday to demonstrate there was no hard feelings between them, a public display designed to calm investors.
Though Mr. Saretsky was considered next in line for the CEO job in the company's succession plan, few thought he'd take over so soon. He joined WestJet last summer as vice-president of WestJet Vacations after a decade at Seattle-based Alaska Airlines Inc.
"I was advised [Tuesday]morning after a board conference call that I had the nod to move into this role," Mr. Saretsky said in an interview.
"I've spent my career aspiring to this opportunity and here I find myself now at arguably one of the best airlines in the world, being given a great opportunity, entrusted by the board to help move the airline forward. So I'm absolutely ready."
The shift takes WestJet in a new direction, from a CEO who was considered by many to be stronger in marketing than operations to a more traditional airline manager.
Mr. Durfy, 43, who was previously a top executive at Calgary utility Enmax Corp., indicated Tuesday that he was becoming drained by the rigours of the job, while also juggling his family life. His wife survived a brain tumour four years ago and encountered health problems last year, from which she has since recovered, he said.
"You run out of steam after a while. Especially at a company like WestJet. It is an amazing place, but the airline space and the airline sector is exhausting," he said.
But his departure comes as the carrier is attempting to forge strategic alliances with international airlines that will allow WestJet to share passengers by linking routes together. It is an area Mr. Saretsky is well versed in. He started his career at the now-defunct Canadian Airlines in 1985 and joined Alaska Airlines in 1998, helping both of those carriers join the Sabre network, which connects carriers together in a global network.
"Some of the many carriers that have been beating a path to the door at WestJet are the same ones that I had personal relationships with at Alaska Airlines," Mr. Saretsky said.
The CEO change also comes after several uncharacteristic glitches at WestJet under Mr. Durfy's tenure, including the botched launch of a new computer reservation system. The problem forced WestJet to issue an apology to customers, while also costing it revenue. WestJet also delayed the launch of a customer loyalty program, prompting observers to speculate the airline was trying to take on too many major projects at once.
"In our opinion, Durfy did some valuable things for WestJet during his tenure at the company," Raymond James analyst Ben Cherniavsky said in a research note. "Nevertheless, we believe that given the circumstances change was necessary."
Mr. Durfy insisted the glitches weren't the reason he is stepping aside, nor was he pushed out the door by WestJet founder and chairman Clive Beddoe.
"It's entirely my decision. Clive has been tremendously supportive and he's a family man himself, he understands. I have certain things that I put a tremendous value on and I felt that my [work and life]balance was out of whack."
The sudden announcement is reminiscent of WestJet's management upheaval in 2000, when then-CEO Stephen Smith parted ways unexpectedly. Recruited to expand the airline beyond its Western Canadian base, Mr. Smith clashed with Mr. Beddoe and, in a public airing of grievances, the chairman described Mr. Smith's management style as "militaristic."
Mr. Beddoe was vacationing in California Tuesday and could not be reached. Though Mr. Durfy's departure doesn't have the same acrimony as Mr. Smith's, it has shaken the markets. Mr. Saretsky's most pressing task will be to reassure investors that the airline remains on course.
"The plan hasn't changed any, we have a good plan," Mr. Saretsky said. "So the market should look to the 25 years of airline experience that I bring and have great confidence in my ability to help move this game plan forward."