West Jet Case Study Essay
The greatest strength of WestJet is their brand image. Through their superior customer service, WestJet has become one of the most trusted brands as well as Canada’s preferred airline. (Anonymous, 2011), (marketing weekly news, 2012) One of the most important strengths of WestJet is their ability to provide low fares to consumers because of their low cost structure. (Yannopoulos, 2011) A key strength for WestJet has been the ability to achieve success through a great corporate culture, and using Strategic hiring, training, and rewarding service oriented employees. They understand the importance of top-down commitment by management. (Karp, 2011), (Ostrower, 2012), (Carr, 2011)
By only having one size of airplane, WestJet is restricted to number of flight destinations. Consumers may find alternative options such as flying from the United States of America. (Sherlock,2012) Another drawback of having one size of airplanes limits the capacity of flyers. (Karp, 2012)
There will always be a reason for people to fly whether it’s for business or pleasure and they will always look for the lowest possible cost. In fact WestJet is actually seeing fewer empty seats. (The Ottawa Citizen, 2012) Increase international growth by acquiring more Code sharing partners. (Sorensen, 2010), (Transportation Business Journal, 2012) By agreeing with Bombardier to include smaller turboprop airplane WestJet can expand into smaller domestic markets without the risk of having to increase fees. (Ostrower, 2012), (Cameron, 2012), (David, 2012)
With Air Canada not performing so well, the Canadian government might allow foreign up-starts into the market. (Sorensen, 2012) Surface transportation (automobiles, buses, rail transportation) could take away customers for short-haul trips. A recession might slow the amount of people travelling. (Deveau, 2011) Price of oil could increase fees. (Cameron, 2012), (Deveau, 2011) Bad weather could prevent travel to certain destination.
1. WestJet has been in the industry for over 15 years and has built its reputation giving customers great value by offering low fares with exceptional customer service. 2. Face competition from Air Canada and surface transportation services. 3. With only three kinds of airplane, maintenance cost remain low but WestJet can only offer economy class and can only fly to limited destinations. 4. Even though Air Canada is the leader in this market, WestJet is the favorite among flyers because of their superior customer service and added features (i.e. Seatback TVs, Web check-in, more legroom, etc)
I suggest that WestJet go after the business traveler because this segment spends a lot of money and has a high frequency of flying. However, it should not ignore the seasonal or occasional traveler because this is the segment does contribute to the growth of the company and has helped West Jet reach the level it’s at right now.
* Air service to 76 destinations in Canada, the United States, Mexico, and the Caribbean. (PR Newswire Association, 2012) * Increase the size of their aircraft and add other international destinations such as cities in Europe and Asia. (Transportation Business Journal, 2012) * Expand to other domestic markets that have not been reached. (Ostrower, 2012)
* Travel Agencies
* Prices vary depending season, destination, and amount of seats left on the airplane
* Domestic Flight (ex. Toronto to Montreal) $155 – $200
* Domestic Flight (ex. Toronto to Vancouver) $400 – $500
* US Flight (ex. Toronto to Orlando) $175 – $400
* Sun Destination (ex Toronto to Kingston, Jamaica) $250 – $500 (All prices are quoted for the summer of 2012 through westjet.com)
* Loyalty or Rewards programs such WestJet Dollars. (Cropp, 2012), (Braidwood, 2012)
Selection of the best Alternatives
West Jet should try to increase their market share by getting into the smaller domestic markets. With the agreement with Bombardier to introduce a new set of smaller turboprops (propeller planes) that consumes less fuel and seats a lower amount of passengers is a great fit. This will help West Jet to keep their operating cost low and should keep fares low for the consumers as well.
Web booking and travel agencies are the best places to book a flight. Online gives the consumer convenience booking while travel agencies are good for those who prefer to speak a person and/or are uncomfortable booking online.
As mentioned above, prices do vary depending season, destination, and amount of seats left on the airplane. With the new smaller turboprops, West Jet should be able to maintain their low fares versus their competition.
With most people booking flights online, the best promotions should be right on the WestJet.com so that they can help drive traffic to their website. In addition, have special deals emailed to current base of customers or those who book a flight with WestJet.
I believe the greatest advantage that WestJet has is a positive image from both consumers and employees, they kind of go hand in hand. Because WestJet has great incentive program for their employees, it helps drive home the idea that great customer service is number one. When your front line workers (the ones that have the most interaction with your customers) are treated well and are recognized for their hard work, the company and customer both win. I think their model of low operating costs, between smaller hubs, with only one kind of airplane was a great strategy to get them where they are now. However, I can in vision in the next 10-15 years WestJet stepping up to include a larger airplane that can travel into more foreign destinations because long-haul flights generate the most amount of money.
Canada’s most trusted brands in 2011. (2011). Marketing, 116(6), 17-21. Retrieved from http://search.proquest.com/docview/920212383?accountid=3455
Yannopoulos, P. (2011). Defensive and offensive strategies for market success. International Journal of Business and Social Science, 2(13), n/a.
Retrieved from http://search.proquest.com/docview/904511236?accountid=3455
Karp, A. (2011). WestJet’s VALUE PROPOSITION. Air Transport World, 48(1), 46-50. Retrieved from http://search.proquest.com/docview/839037396?accountid=3455
Ostrower, J. (2012, May 02). Bombardier wins WestJet order for turboprop planes. Wall Street Journal (Online), pp. n/a-n/a. Retrieved from http://search.proquest.com/docview/1010422700?accountid=3455
WestJet; WestJet is canada’s preferred airline. (2012). Marketing Weekly News, , 1282. Retrieved from http://search.proquest.com/docview/964463239?accountid=3455
Sorensen, C. (2010, May 31). READY FOR TAKEOFF: WestJet’s big plans to conqure air canada and then the world. Maclean’s, 123, 35-35. Retrieved from http://search.proquest.com/docview/757889199?accountid=3455
Carr, D. F. (2011). Westjet cuts costs with crowdsourcing. Informationweek – Online, , n/a. Retrieved from http://search.proquest.com/docview/896003391?accountid=3455
WestJet ranks globally as a top 10 airline. (2012, Jul 10). Canada NewsWire, pp. n/a. Retrieved from http://search.proquest.com/docview/1024241175?accountid=3455
Cameron, D., & Pearson, D. (2012, Jul 09). Propeller planes, fueled by economics, take off; at current oil prices, props make more sense for carriers than smaller jets. Wall Street Journal (Online), pp. n/a-n/a. Retrieved from http://search.proquest.com/docview/1024003999?accountid=3455
Sherlock, T. (2012, Jun 18). Millions of canadians flying out of U.S. airports. The Vancouver Sun, pp. A.1. Retrieved from http://search.proquest.com/docview/1021240152?accountid=3455
Airlines, aviation; WestJet and korean air launch code-share agreement. (2012). Transportation Business Journal, , 109. Retrieved from http://search.proquest.com/docview/1015618972?accountid=3455
Deveau, S. (2011, Jan 20). Analysts split on investment merits of air canada vs. WestJet; labour talks ahead. National Post, pp. FP.14. Retrieved from http://search.proquest.com/docview/846811799?accountid=3455
Canada; fewer empty seats at WestJet, air canada. (2012, Jul 06). The Ottawa Citizen, pp. E.3. Retrieved from http://search.proquest.com/docview/1024045691?accountid=3455
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