WestJet Airline case study

Brief background and overview of the WestJet Airlines

WestJet Airlines is a Canadian low-cost airline that was established in 1996 in Alberta. It is the second largest air carrier in Canada after Air Canada. In 2009, the airline won the award for Canadian Airline of the Year. WestJet operates in the global airline industry, which has been undergoing numerous changes during the past fifty years. With some 220 employees, the company embarked on the task of providing flights to Vancouver, Edmonton, Calgary, Kelowna, and Winnipeg. Since embarking on this air transport business, the company has retained its headquarters in Calgary, Alberta.

Today, the company offers flights to more than 60 destinations in Canada, Mexico, United States, and the Caribbean. The airline is already in possession of some 81 Boeing 737s, which make approximately 383 flights daily. The airline’s managers have succeeded in establishing, promoting, and maintaining the reputation of the WestJet brand, an undertaking that has made the company to become the preferred air carrier in Canada. Moreover, between 2005 and 2008, Waterstone Human Capital listed the airline among Canada’s Most Admired Corporate Cultures.

WestJet’s mission is to maintain low costs throughout its operations and to ensure consistent and manageable growth. The company also remains committed to the integration of technology with the aim of ensuring efficiency and excellence in service to customers. Moreover, the company endeavors to support and empower its people as well as maintain the WestJet culture as a trademark and the main pillar of corporate success.

The company’s vision is to become one of the most successful global airlines by providing its customers with a friendly experience that will transform air travel forever. In the company’s strategic plan, four pillars of ensuring the achievement of long-term success are identified. They include people and culture, guest experience, revenue and growth, and costs. In terms of people and culture, the objective is to invest in and foster growth, development and commitment among all people at the airline. By focusing on guest experience, the objective is to continuously and consistently provide high-quality air travel services to all customers. In terms of revenue and growth, the airline’s top management has set a goal of an annual revenue increase of ten percent. The company is also committed to the goal of reducing costs in a way that will enable it maintain a sustainable profit margin that will propel it to the position of the leading airline in North America.

WestJet Airline has been reporting impressive financial performance in recent years. For instance, the company’s sales increased from $1.05 billion in 2004 to $2.54 billion in 2008. In 2004, WestJet reported losses amounting to $17.17 million. The following year, it reverted to the path of profitability, and it went on to report a rapid increase in profitability. In 2008, the company reported profits amounting to $178.14 million.

WestJet’s competitive advantage rests on its corporate culture and the various tools the company uses to align the interests of all its employees with those of the airline. One of these tools is the profit-sharing plan. WestJet borrowed this plan from Southwest Airlines, which offers ten percent of all its profits to its employees. WestJet has taken this idea even further; employees not only receive the ten percent profit share, they also get additional percentage increments depending on their contribution to the airline’s profitability. This growth in profit share is capped at twenty percent. This plan has been in place since the establishment of the airline, with the aim being to encourage all employees to have the same mindset as far as the importance of profitability is concerned. The aim was to create a positive perception of profitability as a common cause that all employees could strive to achieve

SWOT analysis

Strengths

In November 2009, WestJet was voted the Canadian Airline of the Year by the tourism industry in Mazatlan, Mexico. In-depth analysis of the company’s strengths easily justifies this award. To achieve success, the company has adopted adhered to the core objective of maintaining the lowest airfare costs across Canada, thereby giving it an automatic advantage over all other airlines in Canada. This way, the airline has succeeded in establishing a rapidly expanding fleet of planes.

In recent years, WestJet has also managed to buy even the Boeing 747 jets, whose fuel efficiency is thirty percent higher than that of ordinary planes. The company has also succeeded in integrating its strengths through the establishment of an online community through which flyers are constantly updated via the company website. Furthermore, the company runs a user-friendly website for vacation planning known as WestJet Vacations. Moreover, WestJet continues to maximize its strengths through funny flight attendants and unbeatable customer service.

Another major strength of WestJet is that the airline operates many flights to more than 60 destinations across North America and the Caribbean. The airline also makes approximately 383 flights every day. Additionally, it has made a major achievement by purchasing the new-generation Boeing 737-600s, 700s, and 800s.moreover, the airline has no fuel surcharges. This makes the airline attractive to more people not only in Canada but also across North America.

Many airlines have in recent years resorted to the introduction of fuel surcharges to reduce the vulnerability caused by increase in fuel prices. Many Canadian airlines have been facing pressure to introduce fuel surcharges on flights to North America mainly because fuel prices have been on a long-term upward trend. However, WestJet has so far succeeded in rejecting the idea, arguing that it would jolt many customers. The other major strengths include impressive on-time performance and the fact that it is a low-cost airline.

Weaknesses

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