Situation Analysis
Introduction
WestJet Airlines is a Canadian airline that differentiates itself with their low cost flights and exceptional customer service. The company’s philosophy is “just because you pay less for a flight, doesn’t mean you should get less.” WestJet has been growing rapidly since 1996, however, they believe in growing responsibly by being cautious of their environmental and community impact (“About us”, n.d.). As WestJet has a strong presence locally, our analysis will mainly focus on WestJet’s domestic segment.
Category/Competitors The Canadian airline industry has been steadily growing with a compound annual growth rate of 4.9% from 2012-2016. Within the industry, the domestic segment makes up 60.2% of the
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The large difference of ASMs is largely attributed to the fact that Air Canada focuses on both domestic and international flights while WestJet mainly focuses on domestic flights. This means while Air Canada may fly more kilometers than WestJet, the two companies are not so far off from each other when it comes to gaining customers (Statistics Canada, 2016). WestJet’s differentiating point is their price-competitive nature. As a low-cost carrier the company values offering guests the same experience they may receive at higher-priced airlines. Air Canada has, however, also began operating a low-cost segment back in 2013 called Air Canada Rouge. WestJet is now looking to launch an ultra-low cost segment, “WestJet Swoop” in June 2018, targeting guests who are mainly concerned about getting from one location to another and less concerned about flexibility and convenience (Dormer, 2017).
Customers WestJet’s low-cost pricing advantage mainly attracts price-sensitive consumers within the middle to upper-middle class. These are individuals who can’t afford the more luxurious flights and/or those who are just looking for a cheap but comfortable ride to their next destination. Travelers can conveniently purchase airfare through WestJet’s website directly, through global travel websites (i.e. Expedia, Trivago), or through travel agencies. Within the airline industry, the main concern of consumers is the price as many airlines already offer similar features
Air Canada has been in the business of air transport for an extended period of time. Due to the experience and the exposure of the carrier in the field, it has made a commendable progress through many strategies as well as customer proximity. One of the approaches taken by the airline involves the identification as well as an implementation of cost reduction initiatives in a bid to increase revenue from its operations (Air Canada, 2016). It is also attempting to connect with the existing carriers across the world to connect the current customers to the international world. This approach has been adopted to increase its competitive advantage over other existing airlines.
As a company, WestJet does not show a lot of weaknesses. However,the lack of international and Trans-Continental flights in the world of rapidly rising economies, international business and marketscould be count as a weakness. Customers may not be provided with the international destination they are looking for and could be turned to competing airlines. When higher-class travellers are looking to fly with some added comfort and special service, WestJet does not provide any sort of first class seating which can be a factor of lost business. However, December 2012 WestJet launched“premium economy” class flights program, which is designed to satisfy particular customer’s demands with extra legroom and services. Travelers have also dissatisfied with the fact of lack ofseats for larger passengers, becauseWestJet airplane’s seats aren’t big enough. Moreover, some passengers do not agree with the complimentary snacks only being served on flights two or more hours in length. In addition, Due to small crafts WestJet may become a victim of stereotype of low-cost, low-fare, and short-haul scheduled air carrier only.
• 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.
The airline industry has long attempted to segment the air travel market in order to effectively target its constituents. The classic airline model consists of First Class, Business Class and Economy, and the demographics that make up the classes have both similarities and differences to the other classes. For instance there may be similarities between business class travellers on a particular flight, but they will not all be travelling for the same reason. An almost-universal characteristic of air travel is that customers do not fly for the sake of flying; the destination is the important element and the travel is a by-product, a means-to-an-end that involves the necessity of an aircraft that gets the customer from point A to point B.
WestJet develop their IT operation early and force them get the lead in the aviation businesses. However, as the global economic and the change of people’s demand, the strategic plan of WestJet need to be change to follow the change of the world. Compare with other aviation business, the IT structure of WestJet is small and keeps running on their pervious operation before Smith join into the organization. There are some risks coming out if WestJet continue these IT operations.
For instance, Canada's federal government has delegated the responsibility for airports to local authorities. As a result, many Canadian airports have transformed into brighter, cleaner, and more modern facilities that have become more expensive to operate 3. Canada’s airports have spent more than $9.5 billion on improvements since 19922. According to the CEO of Transat A.T. Inc, “it costs three times as much for an airline to land in Pearson Airport in Toronto as at Charles-de-Gaulle in Paris” 2. Such high landing fees have made Pearson and other major Canadian airports less desirable landing destinations; increasing costs for airlines, and as a result, often increasing prices for consumers. Pearson Airport is West Jet’s “second-largest hub and main connection point in Eastern Canada” and almost half of its destinations are to Canadian airports2, Such high costs of landing in major Canadian cities require that WestJet finds more ways to cut costs and remain the cost leader in its industry.
This report was made up for the purposes for pursuing our client and make him understand why he should invest in our company. This report will contain a swat analysis, strengths and weakness, vision statement, mission statement. These are going to a sure that we has a company aren’t only advertising our strengths but we will also show our weakness and things that need to be improved. The history of WestJet and the current points will also be shown, from when WestJet was founded and too, what’s WestJet’s main focus now will be shown in this analysis for our client. Another thing west jet wants to represent is all of the financial resources and the finical information for our client and of course a company overview will be provided has well.
WestJet is also facing a strategic problem, the longer term impact that growth is having on WestJet’s culture. WestJet’s success and competitive advantage have been a direct result
Westjet Airlines has achieved considerable success in the past few years, winning estimable rewards related to its service, gaining loyal customers and, of course, increasing market shares. It devotes to a “high-value, low-fare airline” which provides humanized services to customers. Another pride of Westjet is its IT, which designs all systems in-house and is operated based on the business demands.
➢ Unique Corporate Culture: The main competitive advantage that WestJet had was their unique culture. Even the executives and pilots help the customer whenever necessary; encourage employees to share suggestions for improvement. They maintained the policy of Care for People.
Air Canada’s early strategy was to grow the business, with minimal concern about their staff members and customers. Without any benefits or rewards their staff felt underappreciated. Their customers felt as though their feedback wasn’t being heard but in the eyes of Air Canada as long as their business was expanding, they were satisfied.
Air Canada is Canada 's largest full-service airline and the largest provider of scheduled passenger services in the Canadian market, the Canada-U.S. trans-border market and in the international market to and from Canada. In 2010, Air Canada improved its reputation as one of the world’s leading international air carriers. Significant progress was made on executing and delivering on its four key priorities and this, coupled with improving economic conditions, allowed Air Canada to record operating income of $407 million in 2010, a $677 million improvement from 2009. Air Canada’s financial strategy is to continue to improve both the level and sustainability of its
WestJet commitment is to make planet Earth a better place to live is part of their responsible growth.
Launched just 8 years ago, today, the Jetstar Group consists of a network of value-based air carriers that deliver high quality air passenger services for budget-minded travelers across Australia, New Zealand and the Asia Pacific region. Beginning with just 400 employees, the company currently employs more than 7,000 people and carries about 20 million passengers a year. To gain some insights into how the Jetstar Group achieved this impressive growth in such a short amount of time, this paper provides a review of the relevant literature concerning the air passenger industry in general and the business strategy used by the Jetstar Group in particular. A summary of the research and recommendations for this company are provided in the paper's conclusion.
Media has a great impact on customer’s choices. Budget airlines have recently been mentioned by the Media as the least environmentally friendly way to travel. In society concern with ‘green issues’ budget airlines may need to switch in close future their marketing focus from rock bottom fares to environmental responsibility.