WestJet maps ambitious Ont. flight plan
Sept 16th, 2005
WestJet Airlines Ltd. has ambitious plans to bolster its Ontario presence, establish a vacation package arm, expand its cargo unit and woo more business travellers.
An internal memo says that while the discount carrier intends to preserve its core market in Western Canada, it will set its sights on expanding in Ontario over the next year to 18 months.
"In order to achieve significant growth in the future, we need to increase our presence in markets east of Manitoba, with Ontario offering the greatest potential for growth," says the executive memo titled WestJet Strategic Plan: 2005-2007.
With various initiatives under way, the Calgary-based airline's goal is to boost annual revenue to $2-billion in 2007, double last year's $1-billion, the memo sent to "WestJetters" says.
In the lingo of the airline's breezy corporate culture, WestJet refers to its employees as "WestJetters" and passengers as "guests."
Airline spokeswoman Gillian Bentley confirmed yesterday that the memo reflects WestJet's current plans. "It's an internal document put out to show what's being contemplated and to boost everybody's morale here," she said.
WestJet will unveil its fall marketing campaign to its employees on Monday. The airline calls it a "brand refresh" that should "further improve the perception of WestJet among current and potential guests, and put more 'bums in seats.' " The campaign is scheduled to be rolled out across Canada starting Sept. 26, but "marketing efforts will focus on Ontarians while we simultaneously maintain our current strength in Western Canada," the memo says.
The airline says it recognizes that high jet fuel prices are a drag on its profit, so it needs to raise revenue and shave expenses as it battles Air Canada and WestJet Airlines.
Besides zeroing in on Ontario, WestJet is seeking to bolster revenue from holiday packages, cargo shipments and business travel.
The carrier already operates charter flights for Transat A.T. Inc., but in July, it registered the name WestJet Vacations Inc. and is seeking to develop "an in-house, complete vacation-package concept."
There are plans to expand WestJet Cargo, which currently offers service to 22 Canadian cities in a partnership with ELS Marketing Inc., with shipments of everything from lobsters to auto parts to mining equipment.
"Over the next 12-18 months, we will also focus marketing efforts on the business travel market," the WestJet memo says. It adds that the airline's research shows an opportunity to win business passengers from Air Canada.
WestJet has added leather seats to its fleet of Boeing aircraft, and has introduced satellite TV service and installed seat-back screens -- enhancements that it hopes will help lure both business and leisure travellers.
The carrier said it could also raise revenue in other areas such as expanding partnerships with hotels and car rental firms, collecting fees for in-flight frills, broadening credit card arrangements and adding new destinations.
A new computer reservation system will also allow WestJet to join airline partnerships.
WestJet wants to deploy its planes in a smarter fashion by "increasing aircraft utilization," meaning extra time in the air for some planes, including night flights to holiday destinations.
The carrier plans to retire 10 Boeing 737-200 aircraft, and by March, 2006, the airline's fleet of 55 planes will consist of three newer, more fuel-efficient Boeing models.
The memo points out that ever since WestJet began flights in February, 1996, it has enjoyed lower operating costs than Air Canada.
WestJet's non-unionized employees are seen as a major asset, with executives praising the "approach to teamwork," in which staffers help each other out even if they're from different departments.
That contrasts with a recent warning from the Canadian Union of Public Employees, representing Air Canada flight attendants.
CUPE said Air Canada flight crews who clean cabins are merely taking work away from ground staff from the International Association of Machinists and Aerospace Workers.
"Grooming the aircraft is neither our work nor our responsibility," CUPE told its members this week.
Protecting corporate culture is important to WestJet, especially since some employees have complained about a lack of raises and the absence of profit-sharing payouts. Such bonuses had been common before high fuel prices hammered the airline's bottom line.
The WestJet executives say the "cost advantage" of flexible-minded employees is highly valued. "Our culture remains a competitive advantage in the face of increased competition."
But they acknowledged WestJet must rely on the "externally operated" Air Miles loyalty program while Air Canada has the "well-developed" Aeroplan rewards unit, which is 85.6 per cent owned by Air Canada's parent, ACE Aviation Holdings Inc. of Montreal.
To win repeat business from passengers, the memo says it's crucial to unload luggage quickly: "Having guest bags to the carousel within five minutes of the first guest arriving at the carousel and having the last bag arrive no later than 15 minutes from the first bag."