The headlines read “WestJet profits plunge”, “WestJet sees steep declines”, “WestJet suffers 65.7% drop”. Granted, a quarterly downward shift of nearly two thirds profit would shake most investors, but WestJet’s ability to stay profitable in these tough economic times is something to be admired. Most airlines are posting losses in the 100’s of millions, but WestJet still blends smart methodology and competitive pricing to keep Canada’s second largest carrier above the clouds.
The Calgary-based carrier has taken every step necessary to both aggressively and cautiously expand and grow new business by filing in virtually every blank left by Canada’s largest commercial operator, Air Canada. Focusing on leisure routes, a tactic that Air Canada admittedly abandoned was an initial goal of
WestJet’s expansion several years ago. But the desire to one-up the other in the marketing arena is becoming increasingly apparent as Canadian consumers watch their two major players battle for dollars.
WestJet has announced a plan with Royal Bank of Canada and MasterCard to unveil a new “frequent guest program” this fall, which will allow consumers to rack up WestJet mileage and will uniquely feature no blackout restrictions. Alongside this new undertaking came an announcement regarding the progression of a new code-share partnering with Southwest Airlines, a US-based major LCC which also gives extreme growth capability to WestJet. Likewise, deployment of a full onboard and back office retail solution from GuestLogix will continue to keep WestJet a vital player in an otherwise turbulent industry.
Initial plans on the expansion of WestJet’s fleet have been slowed for the time being as WestJet waits for the economy to pick back up. While the order for 16 new aircraft from Boeing has been suspended, it was announced that an additional 14 will be on order for delivery in 2015 and 2016. The growth was initially expected to occur by 2013, but the revisions are thought by some to be a well played move to stay profitable.
Air Canada is fighting back with new routes hoping to overshadow WestJet such as direct flights from Calgary to Hawaii, a route currently only held by WestJet, but both carriers agree that the real goal is to stay as strong as possible until full passenger capacity resumes.
WestJet’s new initiatives will surely be a topic of discussion at the upcoming GuestLogix User Group Conference.
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