Since being founded in 1996, WestJet has grown to become the second largest Canadian airline, operating 425 flights and transporting 45000 passengers per day. One of the ways in which WestJet differentiates itself from the competition is through the low prices that they charge compared to other competing airlines. However, this low cost structure comes at an expense. Unlike AirCanada, and other large airlines, WestJet currently does not have an inflight entertainment system. Indeed, in a way to attract more customers WestJet announced plans last year to install entertainment systems into all of their planes. However, this increase in technology comes at a relatively high cost. In order to offset the costs associated with the entertainment system, WestJet plans on adding an extra row of seats to all of their planes. They predict that this added row of seats will help them drive higher revenues and grow as a company.
Due to the introduction of ‘slim-line’ seats consumers will gain one inch of added leg room so that the space taken away is less noticeable. Indeed, this move to change the seat layout is a smart longterm strategy for WestJet. This will allow WestJet to make more profit per flight and lower their average cost per flight. Due to the lower costs WestJet will be able to lower their prices even further than they currently are and attract more people to fly with them. Going forward WestJet will be able to continue their cost leadership strategy, and continue to attract more consumers through their low costs and added entertainment systems.
Sources
http://www.ctvnews.ca/business/westjet-may-add-extra-row-of-seats-on-flights-to-boost-revenue-1.2086288