West Jet Case Study

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CASE APPLICATION
TURBULENT FLIGHT PLAN

OVERVIEW:

Air Canada is Canada's largest airline and flag carrier. The airline had founded in 1937. The company is the world's 11th largest passenger airline by fleet size. The Chairman of Air Canada is David Richardson and the President and CEO is Montie Brewer. Air Canada operates flights to 99 destinations in Canada, the USA, Latin America, Europe, Australia and Asia. Combined with its Jazz network, the airline serves 163 destinations worldwide.

In 1996, a new company WestJet is formed. West Jet Airlines Ltd is a Canadian low-cost airlines that flies to most major cities in Canada and serves destinations in the United States, Mexico and the Caribbean. WestJet is the second-largest Canadian carrier behind Air Canada (third-largest including Air Canada Jazz). The present CEO, President of WestJet Airlines is Sean Durfy.

Before West Jet 82% of the market share held y Air Canada. The legislative move was promoted by Air Canada’s competitive attack on West Jet Airlines for moving into markets in eastern Canada. The strategic decision had made by C. Smith, President of West Jet to take the company national. West Jet's fares are an average of 40 percent lower than Air Canada Airlines. West Jet flies one class of jet, the Boeing of 737, which minimizes pilot training, maintenance costs, and gate turnaround time.

[pic][pic]
A West Jet Boeing 737-700 Air Canada Boeing 767-300

Q1WHAT COMPETITIVE ADVANTAGE(S) DO YOU THINK WESTJET HAS? WHAT COMPETITIVE ADVANTAGES DO YOU THINK AIR CANADA HAS? EXPLAIN YOUR CHOICES.

AnsCOMPETITIVE ADVANTAGES OF WESTJET:

In our choice the competitive advantages of West Jet are:

➢ West Jet's fares are 40 percent lower than Air Canada. ➢ West Jet ticket sales through the internet, which now accounts for about 11 % of its tickets sold. ➢ It flies one class of jet, the Boeing 737, which minimizes pilot training, maintenance cost and turnaround time. ➢ They use several incentives also.

➢ All workers participate in a profit-sharing plan – $4 million was shared among eligible employees in 1999. ➢ Create demand by delivering the product at the lowest possible fare. ➢ Specialize in short haul, point to point, non stop service. ➢ Specialize in simple, single class of low fare service.

COMPETITIVE ADVANTAGES OF AIR CANADA:

In our choices the competitive advantages of Air Canada are:

➢ Strategies focus on the "value for money" passenger. ➢ Flexibility in its balanced market segments.
➢ Established track record.
➢ Reliability and on-time performance history.
➢ Broad distribution systems.
➢ "Add-ons", such as hotel packages to flights.
➢ Beverages like coffee, tea, juices and soft drinks are still free on domestic/US flights. ➢ Movies and music are available on all flights.
➢ Newspapers and magazines are available to all Executive & Executive First passengers on Air Canada flights.

Q.2 WHAT COMPETITIVE STRATEGY DOES WEST JET APPEAR TO BE FOLLOWING? EXPLAIN YOUR CHOICE.

Ans West Jet Airlines Ltd. Is a Canadian low-cost carrier based in Calgary, Alberta, that flies to most major cities in Canada and serves destinations in the United States, Mexico and the Caribbean West Jet is the second-largest Canadian carrier behind Air Canada.

Following is the competitive strategy that West Jet appear to be following,

1. Low Fare, High Efficiency:

West Jet executives choose to follow South West Airlines’ successful business model. South West Airlines, established in 1971, had pioneered the low fare, high efficiency airline model, and is the most consistently profitable airline in the world.

West Jet Airline business is founded on delivering low fare airline service to stimulate the use of...
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