After reading Jocelyn’s insightful discussion regarding WestJet, I felt compelled to add my thoughts to her post on the falling quality of air travel in an effort to maximize profit. I believe that maintaining the quality of service and the reputation amongst WestJet’s flyers is more important than maximizing profit.
Westjet employs the cost leadership low cost business model in order to set itself apart from main competitors such as Air Canada and Alaska Airlines. In an effort to achieve that, CTV News recently reported the company is currently levying a fee of $25 dollars per baggage for economy fliers. Along with that, a brief analysis reveals the airline carrier only operates Boeing 747s to avoid high training costs and only pays their employees roughly ~75% to 80% of the industry average.
Currently, their business model seems to be working but not at the level as intended — especially not with the new baggage fees working against their favour. I feel that WestJet can improve their business model by transitioning from low cost to a hybrid of differentiation and low cost; thus, they will be targeting a new consumer base (a more narrowly defined one). By introducing programs for solely corporate flyers, perhaps WestJet will be able to attract large corporations to jump ship to WestJet. It will help differentiate themselves from competitor’s low-cost line of air travel.
WestJet – Introducing a new way of travel for corporate flyers