WestJet is one of the leading airlines in Canada and serves a major part of Europe. WestJet is known to provide cheap services to its customers and also having good and quality customer service. WestJet has continued to grow tremendously over the years. WestJet was founded in 1996 by a group of Calgary businessmen who were led by Clive Beddoe, an entrepreneur. We see how it raised revenue for its kick off since it raised $8.5 from local investors and in January 1996, there was a second offering to retail and institutional investors. With all the funding required, the airline was now ready to kick off its operations. On February 29, 1996 marked the beginning of the operations of WestJet Airline and has continued to grow since then.
It is in its bid to grow to a better airline that the senior executives if WestJet airlines were considering its expansion plan and goals for the next few years. WestJet was considering adding a smaller bombardier or Embraer airplanes to its fleet of single model Boeing 737s. Thought this seemed like a good decision WestJet considered that the plan would affect its strategy as much as adding the airplanes would increase WestJet’s market share by offering short haul trips and connections. For the future, the hope of WestJet is to become Canada’s dominant airline and be able to produce the best kind of service it can give to its customer.
WestJet’s aim is to become one of the most successful airlines in the world. In delivering its services and becoming the most preferred airline, WestJet had its goals to achieve. They are to achieve revenue growth of at least 10% in available set miles through fleet expansion and an increases number of flights. They are to maintain a low cost model and growing its margins. They aimed to have the lowest equivalent sustainable cost per available seat mile, excluding fuel, in North America. They also aim to offer an amazing guest experience in reference to time performance, completion and baggage rates. Then their final aim is to build a unique corporate culture ensuring the right training and tools were available. WestJet has continued to achieve its goals and has been growing progressively.
Analysis of the Situation
WestJet aims at becoming the best airline in Canada. Its main competitor is Air Canada. It is seen that by the start of 2009, WestJet had 36% share of its domestic market to air Canada who had 57%. Soon after, Air Canada was rumored to be having problems and even filing for bankruptcy. This served as a boost to expand the airline for WestJet and an opportunity to add smallest jets to its fleet.
In Canada, the deregulation policy which was introduced in 1988 served as a platform to allow carriers to establish airfare and conditions of carriage without regulation from the government. This boosted competition in the industry in a fierce way but favored the passengers looking for low bargains. As a result of being highly competitive, the airline industry was sensitive to macro factors such as general economic conditions, weather and fluctuations in jet fuel prices. With all the competition WestJet had to formulate their way of operation to deliver the best service to its customers.
Identification and Evaluation of Alternatives
WestJet’s problem is to become the dominant airline in Canada and increasing the number of airplanes which may lead to reduced market share and thus not provide the required services to its customers. It is seen to strive to provide the best quality of service in the airline industry by being friendly and casual to its customers. Though this seemed to act as a boost to WestJet it still has the resolution to increase its network and as a result become the most preferred airline in the world. Also, WestJet has the aim to have a large market share in the airline industry and thus provide competition for the other airlines especially the upcoming airlines. In addition to striving to provide better services, WestJet also has put effort in its employees so that they can deliver the best services. WestJet is known for its cheerful employees, irreverent corporate culture, low fares and upbeat commercials. All these come together to produce the best Airline in Canada.
For the solution to its problems, WestJet took some steps that helped them expand. They started building a network in the east with service to Winnipeg, Manitoba, in 1998.They started a selective hiring policy to only hire the people who would fit to WestJet’s corporate culture and did not have a unionized workforce. Also WestJet still aims to focus on its cost reduction. They aim at maintaining on-time flight operations, ensuring that guests were not inconvenienced and also costs associated with delayed flights are minimized
Conclusion and Decision Making
Based on the analysis of the airline industry, WestJet should adopt to increasing the number of airplanes. The analysis of the airline industry in Canada and also the tough competition seems as a challenge to the airline. Putting this to consideration, as much as the decision would go against WestJet’s strategies, it will increase its market share. As a result WestJet will grow and become dominant in the region.
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