After reading my classmate Angela Zhou’s blog post which is Jetlines: Canada’s Ultra-low fare airlines, I now have a clear understanding of the operation theory of the company. Since Air Canada and WestJet have dominated a large part of the market, Jetlines is now seeking for chances to offer consumers at low cost and to improve passengers’ experience. Angela thinks the flight targets students who study in local university and can have a low-cost traffic expenses during their travel. Also, she claims that Jetlines now relies heavily on foreign investor which exceeds the maximum allowance of the government allowance. I’ve some add-on points to her idea and I totally agree with her ideas.
To be more specific, in order to minimize the cost, Jetlines not only considers its plane types or shipping spaces but also seeks for flights to places that are unserved or merely served. This offers Jetlines a competitive advantage as it performs different ideas from rivals. It targets different business passenger segments so as to accord with their desires. Moreover, it chooses to fly to secondary airports which cost less than primary international ones. I believe that this greatly reduces the expenses to air construction fees which are mainly levied on customers. Jetlines can focus on providing a safe, secure and low-cost environment which improves the customers’ comfort and leaves a nice impression during the flight.
However, there are still several potential competitors which share the same aim target with Jetlines like WestJet’s Encore. WestJet’s Encore project shows that “it has resulted in average fares falling 20% to 40% and traffic volumes growing 40% to 55% year-on-year.” Jetlines doesn’t have wider popularity and better credit than WestJet’s Encore. As the WestJet chief executive officer said: “We might have an advantage because we’re a better credit risk.” In order to win credits, Jetlines can create its new market demand. Moreover, it can add more variety of customization like adjusting the length of the seat so as to fit the customers’ demand and comfort. The new market demand helps Jetlines to rely less on foreign investment and meanwhile strengthens it popularity.
All in all, I agree with Angela’s idea that Jetlines is exploring a new market demand for the flight and it aims to give passengers a comfortable and low-cost experience. Also, I believe that Jetlines is facing several principle competitors. In order to win credit, the company can invest more on the inner facility of a plane or explore new routes which have a potentially huge market demand.
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References:
http://aviationlawblog.ahbl.ca/2016/09/28/canadas-new-low-cost-airlines-poised-to-take-flight/
http://www.jetlines.ca/wp-content/uploads/2016/02/ULCC-Opportunity-in-Canada-V2.pdf
http://www.airline-update.com/jetlines-plans-launch-airline-canada/
