West Jet Case Study

Canadian based airline may find it hard to find strong support from US and International customers

WestJet Airline was founded in 1996 by Clive Beddoe and a team WestJet airlines were started with the philosophy that just because you pay less doesn’t mean you should get less.

• WestJet views its employees as its most valuable asset. Therefore, it aims to ensure that employees’ work experience is fun, challenging and rewarding. Encourages employees to interact positively with customers to try to earn repeat customers.

WestJet became one of significant air transportation companies since its birth in 1996.After conquering all Canadian destination, WestJet have chance to compete in the international scene. Today it has not that many destinations outside of North America,

Independence Air products coupled with their customer focus proved very popular and earned them second position in customer satisfaction among 16 domestic airlines in the nationally recognized Market Matrix Hospitality Index. This was the first time Independence Air was listed in the Airline Customer Satisfaction survey. (Source; Independence Air).

Experts says entering in to international market will be a mile stone for WestJet which is considered as a mature marketing. All these make an impression that WestJet is going to win this game by taking customers away from Air Canada, which it will do with the price cutting weapon.

In terms of financial results, the annual report of both companies show the WestJet is much more financial healthy than Air Canada. We will look at the ratios for both companies, as financial ratio analysis provides answers to several questions: is the entity primarily financed by foreign sources of assets, do the customers pay promptly and in accordance with the contracted agreement, are the operating costs too high and do they endanger the long-term stability and business performance (VSBDC, 2004 & Žager, et al. 2012). Ratios are used by outsiders to evaluate the corporation (earnings/share, P/E ratio) and are used within the corporation to measure such things as efficiency and effectiveness (Cotts, et al. 2004).

Air Canada is a major player in the airline industry, as it has been since its foundation on April 11, 1936. As one of the top airlines in the industry, there is a high standard of quality that was, is, and must continue to be maintained by the dedicated staff in the employee of Air Canada. It continues to be a steady market, especially with the stability of the Canadian economy. The downturn prices in oil continue to impact the dollar, however, it lowers operational cost in the industry, and allows competition to remain high.

Let’s dive into Canadian Airlines and see what’s that all about. Of course, Canada is going to have multiple airlines all over, some areas have more than others for example, the Quebec area in Canada is covered in Airlines compared to smaller areas in Canada. There are four commonly used in Canada and they are Air Canada, WestJet, Jazz Air, and Regional Airlines. Air Canada is the largest provider of scheduled passenger service in the Canadian market, as well as the largest provider of the international flights to and from Canada. WestJet could possibly be a Canadian Southwest Airline, a low fare airline and in fifteen years has become one of Canada’s largest airlines that specializes in travel from Canada throughout the United States and the Caribbean. Jazz Air is the top Canadian carrier in terms of overall flights and the number of Canadian destinations that are served. Regional Airlines exist because with Canada being the second largest country behind Russia and all the ground that needs to be covered a regional airline that specializes in flying within different regions of the the country. In Canada, the people are all about the trends. What is the latest, hottest, and newest thing in the newest. So maybe one-week Jazz Air is having a specialty and it has caught the attention of people and they prefer using Jazz Air only for that week then Air Canada decides to do a three-month promotion. Well at the end of the day Jazz Air is old news

WestJet did surprisingly little to prevent overtaxing its system, all they did was implement it during the slow season and cancel a few extra flights. Jet Blue on the other hand had the experience of WestJets failure. They created a backup website, lowered passenger numbers on flights, and hired extra call center operators to handle basic calls. The different approaches seem to be the difference between life and death during the conversion.

As stated before, WestJet’s culture and their employees are one of their main reasons for their great success. If not careful, this could be the cause of their downfall. WestJet Airlines seem to connect their culture with their hiring process. West Jet is known as a fun, enthusiastic, and playful environment. During the hiring process, they look for employees who have a great sense of humor and are new to the airline field. Often employees play jokes on passengers and amongst each other. As WestJet continues to expand, they will not be able to keep their culture as is.

Air Canada said operating its own program will boost its financial performance while allowing it to offer customers better value.

Competitors in the air travel business have to overcome several hurdles to maintain a market share and even more to increase it. Southwest Airlines has become a leader, with regards to ticketed seats, with the simple strategy: low-cost and no-frills combined with a crew that is well groomed in customer satisfaction. Southwest’s business strategy focuses on their record turnaround times at the gate, customer satisfaction, and employee satisfaction. Along with this focus, their frugal spending habits have built a highly profitable airline.

Key success factors are variables that can significantly “affect the overall competitive positions of companies within any particular industry” (Wheelen, p113). Airlines are in part service businesses. To be successful, an airline must be effective in four general areas: 1) attracting customers; 2) managing its fleet; 3) managing its people, and 4) managing its finances.

While it follows a Point-to-Point system enabling it to have punctual and less costly flight schedule, most of its competitors follow a Hub and Spoke model. The change from their existing system to the hub and spoke model would prove to be too expensive to