“Owner’s Care”. This is the line that is played at the end of each WestJet Commercial however, at an ironic turn of events, WestJet is now facing a lawsuit about its recent baggage fee implementation. The lawsuit is directed at both WestJet and Air Canada and addresses the possibility of the two airlines colluding and “unjustly [enriching] themselves [through] the process” by introducing a new baggage fee onto their economy class flying to and from locations in Canada and US. I do not know if the two airlines did collude; however, I question WestJet’s implementation of the baggage fees. What are they trying to achieve with the baggage fees? And is this a good decision for a sustainable competitive advantage?

WestJet, a Calgary-based airline company, focuses on middle class to lower class customers that need an affordable and cost efficient option for airfare to popular locations in Canada, USA, Mexico, U.K, and the Caribbean Islands. Although fares may be cheaper, WestJet believes that the service and satisfaction customers receive should not be any lower than they receive from flying with other airlines. I consider one of WestJet’s most notable strength to be their business strategy; they focus on a narrow market and do it at a low cost point. They identify customer’s desires for cheap and dependable flights and decided to fulfill that void in the market.

Anyhow, I question their decision to introduce the baggage fees. Though WestJet claims that the purpose of the first bag fee is to offer customers with more options, I merely see it as a cash grab. In my opinion, I believe that WestJet should have rejected the idea of baggage fees which would have further established their competitive advantage with more of a price advantage and  gained a larger share of the market as more customers are enticed to fly with WestJet. Yet, they decided to stray from their competitive strategy and follow the norm. I feel as if WestJet missed out on the opportunity to strengthen their value propositions by offering what other airlines do not offer or cannot offer. Yes, introducing baggage fees to the economy class customers is expected to increase revenue for WestJet. However how long will it take for another airline to undercut WestJet? Will another airline, with the same price structure, offer economy flyers cheap airfares without the baggage fee? Only time will tell.

Sources:

George-Cosh, D. (2015, July 28). Canadian Low-Cost Carrier Departs From No-Frills Model. Retrieved October 02, 2016, from http://www.wsj.com/articles/westjet-airlines-profit-climbs-19-1438083009

Gilligan, M., & Sturgeon, J. (2014, September 18). Air Canada to charge $25 fee for first checked bag on economy fares. Retrieved October 02, 2016, from http://globalnews.ca/news/1570123/air-canada-to-charge-25-fee-for-first-checked-bag-on-economy-fares/

Gilligan, M., Sturgoen, J., & Tighe, T. (2014, September 15). WestJet to charge $25 fee for economy checked baggage in Canada and U.S. Retrieved October 02, 2016, from http://globalnews.ca/news/1563401/westjet-announces-fee-for-first-checked-bag/

Kohut, T. (2016, September 27). WestJet, Air Canada facing lawsuit over bag fees. Retrieved October 02, 2016, from http://globalnews.ca/news/2967013/westjet-air-canada-facing-lawsuit-over-bag-fees/

Cummings, B. (2014, September 14). First checked bag fee: Why? Retrieved October 02, 2016, from https://blog.westjet.com/why-first-checked-bag-fee/

Picture Source: http://www.flightswatcher.com/wp-content/uploads/2016/05/westjet-airplane.jpg

• COMMERCE 101