Mr. Dhanani recently talked about the preparations WestJet is making in order to brace the entry of North America’s biggest airline, southwest airlines. I personally believe this whole talk about WestJet restricting the width of the seat to increase leg space for passengers is rubbish and a big cover up.
WestJet is just like every other airline, a firm seeking to maximize profit. With the threat of another airline entering into the Canadian market it has to reduce costs some way. If I were on the management team of WestJet airlines I would also find new ways to reduce costs and maximize profit. This is because of the threat of new competitor, Southwest airlines plans on entering and becoming a huge competitor. With their value proposition of cheap prices, consumers like you and I will be more attracted too this. I think Airlines will have to react to the entry of this airline by changing their own target sectors and value propositions in order to maximize profit.
Being a consumer, I am hoping for the entry of Southwest airlines, as it will force other airlines to bring their prices down as well.
In order to keep consumers from leaving, airlines will have to provide more benefits and also a better price. For people who travel a lot, this would be a positive impact as it will allow them to travel at cheaper cost.