WestJet Airlines Ltd. WestJet and Air Canada - Term Paper Example

? WestJet Airlines Ltd. Part One Defining the Business Firm and Products WestJet is an airlines company created during 1996 aimed at rendering the best class of flight service to its consumers at economic rates where the people can book vacations, hotels and car rentals online and at the same time earn facilities like travel insurance. It also has a loyalty card and rewards program (WestJet, n.d.). Key Features and Benefits The company renders flight security services with also helping the people book flights, hotels and car rentals from airports online. In terms of special benefits the company renders special privileges for persons relating to special categories and also pertaining to the maternity category (WestJet, n.d.). WestJet in competition to Air Canada has introduced ‘premium economy’ seats to help the consumers enjoy an extra leg space that would be made available in the first four rows of the airlines. Though the booking of the ‘premium economy’ seats would tend to charge more from the consumers yet a comparison drawn reflects that the charge is half than charged by other premium airlines in the course of rendering boarding and on-flight amenities to its passengers. This premium seating model of the company helps WestJet to continue with its low cost position (Hasselt, 2012). WestJet’s Product Life Cycle The Product Life Cycle curve for a company has four stages like Introductory, Growth, Maturity and Decline. WestJet reflects a growth in terms of market revenues and passenger traffic along the periods ranging from 2007 to 2011 from $2127 to $3072 million and from 14,545 to 21,186 million respectively. Thus WestJet falls in the Growth stage (WestJet, 2011, p.6). Products Rendered by WestJet and Consumer Needs WestJet renders online booking of flight, hotel and other hospitality services for both business and corporate passengers along with vacationers. Along with insurance and security benefits the company also renders an extensive reward program catered to meet the needs of loyal consumers (WestJet, 2011, p.10-14). Passengers through the above services can book their flights and hotels associated with the airline company in an online fashion that helps in making their tour more comfortable. Insurance and security benefits help the passengers retrieve their expenses related to their vacation and tours in cases of any emergency. Further the loyalty scheme of the airlines company helps the consumers avail special discounts and promotions rendered by WestJet during special occasions. WestJet’s Offerings vs. Its Competitors West Jet’s service offerings in comparison to other flight servicing companies operating in the Canadian landscape like Air Canada and American Airlines gain dominance in being able to provide the best quality of service at highly affordable or economic rates. Moreover the company operating on the basis of hub and spoke model reflects higher interconnectivity than its competitors (Grant, et al., n.d.). When, How and by Whom are the services of WestJet Procured Flight touring services and amenities rendered by WestJet are procured by people in times of deciding on vacations and also while planning to take short business tours. Services and amenities rendered by WestJet relating to booking of flights, hotels, car rental services along with travel insurance benefits can be availed by the consumers through the help of online portals. The consumer or passenger traffic in WestJet consists thus of passengers that are frequent vacationers or are tending to visit places relating to their business and professional needs (WestJet, 2010, p.9; Lamb, 2011, p.571). Market Segments of WestJet WestJet mainly focuses on being a low-cost carrier rendering services to economy class passengers. Moreover the airlines company also caters to the needs of consumer segments through the transportation of cargo commodities on board (Aylen, 2012, p.250). Consumer or market segmentation of WestJet can be made in terms of Leisure Class Passengers that tend to avail flights for tour or vacation purposes. Other than Leisure Class the passenger class of the airlines company can be further divided into Business Economy Class. Passengers in this class tend to avail the economy or low-cost flight services for their business tours. Along with the above classes a new class can be incorporated pertaining to the Premium level seats reflecting on the Premium Economy Class of Business Passengers. Defining the Market Market Opportunities and Threats WestJet through the use of social networking systems is gaining the market opportunity to expand along international borders pertaining to European regions like Ireland and the Bermuda. The rise in the number of low-cost airlines around the world with a rise in the prices of fuel tends to impose considerable threat on the growing markets and profits of WestJet. Strengths and Weakness WestJet operating in the category of low-cost airlines through renders value additions in the services category by tying up with other hospitality sectors like hotels and car rentals. The company also becomes able to render flight insurance and rewards thereby gaining growth in demand. WestJet being a low-cost airlines company fails to help the corporate passengers with luxury class facilities they demand for. Further the flights of the company are restricted to inter-regional areas. Inter-continental flights are not in their service offerings (Grant, et al., n.d.). Strengths and Vulnerabilities of WestJet’s Competitors Air Canada helps its passengers to book flights both premium and low-cost ones both online and through mobile services. Seats of Air Canada are equipped with touch-screen televisions for entertainment. During the financial year 2011 Air Canada received an economic downfall owing to which the price of the company’s shares got reduced from $3.00 to around $1.50 (Ratner, 2011). American Airlines provides to passengers a highly comfortable cabin to enjoy sitting and sleeping facilities on board. The Airlines Company has loyalty card and club system to enhance the flying experience of passengers. In a recent activity during 2012 American Airlines owing to the change in the United States policy structure has suffered from the threat of getting bankrupted showing a considerably weak financial position (Tammy, 2012). CanJet Airlines another competitor of WestJet is an airlines company located in Halifax and focuses on rendering value based flight services to passengers in addition to providing the people sense of comfort, ease, convenience and greater accessibility. The company renders charter flight to a maximum of 189 passengers at a time with the help of its Boeing 737 aircrafts. The airlines company works based on the cooperation of travel agents booking flights for the passengers and also renders special packages, discounts and offers to the consumer groups (CanJet, n.d.). CanJet’s airports face the threat of hijacking attacks during 2009 that reflects lacunae in security and airport intelligence services for the airlines (CTV News, 2009). Part Two Financial Profits In 2011 the company earned financial revenues $3,072 million. The company expects to gain a 1 percent rise in revenue for the financial year 2012 reflecting a revenue trend of $3,172 million. Thus by 2015 taking a 2.5 percent rise from the 2012 revenue figure the amount would stand up to $3251 million (WestJet, 2011, p.5-6). Sales and Market Share In terms of sales and market share WestJet is found to hold a 38 percent share in the Canadian Airlines market. The Chief Executive Officer of the company aims to gain a realistic rise of around 45 percent by the close of 2014. Thus it is expected that by 2015 WestJet would effectively gain around a 50 percent market share (CBC News, 2010). Customer Attitudes WestJet along the periods ranging from 2007 to 2010 reflected less number of consumer complaints owing to which it earned the recognition for the best Canadian airline company during 2010. By the close of 2016 the company however aims to be one of the five noted international airlines company (Cooper and Burke, 2011, p.333). Dealer Support The Code-Sharing partnership listing for WestJet is held to increase with the incorporation of Delta Air Lines. Thus the number of Code-Share partners for WestJet is held to rise from seven to eight in the near future (CNW, 2012). The graph reflects that where during 2012 WestJet ranks second to Air Canada in the Canadian Airlines market by the end of 2015 it is expected to share the 1st position with its arch rival, Air Canada in the stated market (Wit and Meyer, 2010, p.203) Competitive Position Parameters WestJet Air Canada Target Markets People interested in visiting places on vacations and business travelers (Rahman, 2009). High level professionals and business travelers (Air Canada, 2012, p.3-4). Benefits Offered Low-Cost Flights with Insurance and Security Benefits and Loyalty Schemes Online Vacation, Flight and Hotel Booking (WestJet, n.d.). Customer Convenience through faster security checks and booking applications via mobile and web and flight entertainment services. Loyalty programs and benefits rendered to loyal consumers (Air Canada, 2012). Quality Offers economical price package to passengers. Enhances flight quality by rendering food and other amenities for consumers to procure on-board. Offers international flight quality to passengers by helping them get the benefit of quality and variety of food products on-board and baggage facilities related to their destinations. Provides Wi-Fi connection to passengers on board (Aylen, 2012, p.250). Price It falls in the category of Low-Cost Airlines rendering only short destination flights (Taneja, 2010, p.81). Pricing of tickets includes an addition of surcharges pertaining to fuel, security, flight insurance and other developmental charges which are different for Canadian and international zones (Air Canada, 2012). Improved Versions WestJet continually works to render enhanced online services to consumers aimed through employee development (Cooper and Burke, 2011, p.8-9). Air Canada’s service development initiatives include enhancement of software to assist the functions of agencies meant for booking flights and destinations controlled on through centralized market information systems (Shalla, 2006, p.127). Location Flying locations for WestJet are limited to regions of Canada, Mexico, United States and Caribbean Islands (WestJet, n.d.). Air Canada offers international flight services along many destinations pertaining to European, United States and Canadian destinations (FlightNetwork, 2012). Delivery Flight and vacation booking services are delivered at an online level with fixation of flight schedules for passenger and cargo operations (Lamb, 2009, p.20). Delivery of customer care and information services is conducted through an agency system through both the online and cellular media (Air Canada, 2012). Follow-up Service WestJet helps its passengers to enjoy flight through serving food and providing other audio-visual entertainments (WestJet, n.d.). Air Canada follow-up services helps in automatically booking and availing information on new flights to passengers whose flights have been cancelled (Air Canada, 2012). Availability Flight availability systems and services operate through agents and also on online basis to render real time information (WestJet, n.d.). Flight availability and information is rendered through the help of a Wi-Fi connection that operates on the basis of Smartphone and Laptops (Air Canada, 2012). Convenience WestJet renders convenience to passengers to make reservation of flights and hotels through web and mobile. Air Canada operates both through agents and as well as online and mobile applications to render passenger convenience in flight and vacation booking. Reliability WestJet renders reliable flights in helping in safe landing operations and also helps in saving fuel costs. Air Canada’s flight reliability system helps in safe landing operations in regions involving high terrains and cloudy atmosphere. It also helps in safe landing of different airliners (Cole and Star, 2012). Service WestJet essentially operates based on the hub-and-spoke model centrally governing the different airports under it. It is now focusing on promoting long distance flights (Wit and Meyer, 2010, p.203). Air Canada offers services to both domestic and international clients through the allocation of airlines both premium and high branded and other low airline brands for domestic flights (Weinstein, 2004, p.4). Guarantees Price Guarantees are rendered by WestJet such that on reduction of prices of vacation packages the difference is refunded to the passengers within 21 days of their booking and the refund can be availed from multiple locations (WestJet, n.d.). Air Canada renders a guarantee for low pricing guarantee pertaining to the North American airfares and renders a challenge on that account (Air Canada, 2012). Part Three Four Ps of WestJet Product The product and service patterns rendered by WestJet can be studied along different heads. Firstly pertaining to baggage the first baggage checking done would be free while for the latter subsequent charges are levied. Secondly pertaining to reservations booking flights and availing information from contact points are complementary in nature while cancellation or changes rendered would require charges. Thirdly for passengers in groups willing to change or later their name the same is acceptable without charge for a period ranging up to 24 hours prior to departure. Moreover in the fourth category the airlines company also assists the people to carry their pets and enjoy different food and both alcoholic and non-alcoholic beverages along with rendering audio-visual entertainments. In the fifth category the airlines company encourages the passengers to avail different types of vacation packages. However WestJet tends to render charges pertaining to the demands of the passengers to avail food, beverage and other vacation packages (WestJet, n.d.). Price The fares of the flights are quoted by WestJet from time to time and are susceptible to changes without any intimation. Again rendering of the lowest possible fare belongs to the company’s hands and is thereby rendered based on selective flights and for selective time of the day. The price of the seats pertaining to the flights goes on increasing with the considerable rise in demand for the particular flight. Thus the management body of WestJet requires the people to make advance bookings of the flights to help in countering price fluctuations. Again the company focuses on rendering of discounts and offer prices to the consumers based on certain specific occasions and also renders different price packages for issues concerning visits by people to funeral occasions (WestJet, n.d.). Place WestJet is found to enhance its flight destinations from time to time. During the summer months of 2009 the company augmented on its number of non-stop flights along several regions heading from different regions in Canada to different regions like Florida and Mexico of United States. Enhancement of flight destinations helped the consumer traffic to choose between a large number of destinations and vacation spots such that the flights would commence on suitable time periods and would commute with less number of halts. The company is also actively working to increase the number of possible destinations in its domestic framework within Canada. WestJet is also working in terms of virtual level to help passenger traffic book flight seats from their Smartphone and online gadgets like laptops (Centre for Asia Pacific Aviation, 2009). Promotion Pertaining to promotions WestJet has effectively launched and enhanced its loyalty card and credit card programs that in turn helps passengers save amounts which is spent again on future WestJet flights. The promotional program also helps in enhancing the vacation tours where each passenger gains the privilege of spending around $500 saved. These promotion programs designed on the basis of loyalty and credit cards are made quite transparent so that the people can easily comprehend the pattern and the amount of saving they have made and how they can earn the privilege of such. The promotional program is conceptualized by WestJet to gain a further leverage pertaining to the corporate and business class consumers where it aims to gain a 35 percent share by the end of 2012 from a 24 percent share during 2010. Moreover the Frequent Guest Loyalty Program of the company also helps in gaining a larger number of consumers and passengers than in the earlier periods (Direct Marketing, 2010, p.1). Promotion and sponsorship events also consist of holding of fairs and festivals that in turn attracts a large number of people. This practice along with organizing sweepstakes helps in enhancing association with the airlines brand (WestJet, 2011, p.36-37). Performance Based on Four Ps Product WestJet as a no-frills airlines company tends to render a plethora of different services to the consumers both free and chargeable. In this manner it encourages the visit of passengers pertaining to both lower and higher income groups. Price The pricing patterns of WestJet involving additional charges for other than complimentary based services are rendered in a transparent fashion online that in turn would help in reduction of conflicts. Place Operating based on Code Share Agreement with other airline companies WestJet helps in enhancing the accessibility and booking and touring comforts for its passengers in terms of gaining seats in flights. Promotion Promotional Mix of WestJet being constituted of loyalty and other promotional schemes pertaining to discounts and offers help in enhancing the interest and level of attraction of consumers to avail their flights. Recommendations Regarding Four Ps Product Further changes can be incorporated in the product portfolio by WestJet pertaining to the allocation and designing of lounges meant for VIP Passengers and other passengers having disability. Similarly for maternity groups the company needs to render additional facilities and amenities both on and off the board. These practices would thereby help in enhancing the level of customer care practices of the company and thereby help in building customer trust and loyalty. Price WestJet requires to render a larger amount of transparency in the mode of stating the different prices and break-ups involving surcharges related to the air fares charged. Such mode of transparency would help in cultivating enhanced relationship with the consumer and passenger traffic and thereby would help in the building of trust. Place The company in addition to working on the above accounts can also work in the enhancement in the number of airports along several regions. Moreover the company can also work in the building of networks with existing airport authorities in other new regions to enhance its service and distribution enhancements to help passenger traffic effectively. Promotion Thus the program in addition to helping the passengers earn on WestJet dollars can also focus on rendering points and coupons thereby helping to enhance the interests of the people. This method would thereby help the promotional mix of WestJet gain and address the needs of a larger consumer sphere. WestJet’s Social Media Usage WestJet tends to enhance the communication aspects with the consumer masses through the gaining of platforms in social media accounts like Facebook and Twitter. Sociability in terms of culture and fun sharing is conducted through the use of YouTube where promotional and entertainment videos are rendered (WestJet, n.d.) Performance Based on Social Media Similarly social networking sites can also be effectively designed to help the passengers avail the benefits of such reward programs from the online pages of the company liked on their visits while conducting social networking activities from their own pages. Recommendations Regarding Social Media Usage WestJet can also focus on generating a promotional campaign through the use of its Facebook account to gain customer views relating to the offers and schemes generated. This feedback would help in enhancing the customer service dimension. References Air Canada. (2012). Corporate Profile. 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