How Low Will You Go?

Discuss topics relating to Westjet.

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bmc
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Re: How Low Will You Go?

Post by bmc »

FICU wrote:
Ali G wrote:
Westjet has established a price that keeps it profitable and supplies a needed service. So, you should be happy they have satisfied your conditions on entering the market.
A "needed" service? Give your head a shake man... another Boeing's worth of seats in a market already over saturated with seats. The 50 seat Jazz RJ isn't needed... the First Air and Canadian North combi's served the market just fine and that's when Yellowknife was booming. Yellowknife is suffering at this time if you weren't aware.
It's a fact that low cost airlines grow the market.

Your arguments are dated. You should have been in the industry before May15, 1986 when "Freedom to Move", the airline deregulation paper was released by the government. Every airline had to submit justification for price increases. All northern airlines loudly protested allowing competition on the delicate northern routes. The arguments were that the existing service reflected northern needs and that additional competition would erode and make existing service no longer viable. The fact of the matter was B737's were earning between $7,000-12,000 an hour for airlplane fully allocated costing $3500 an hour. Airfares were in the range of $1200 because of the "high cost". It's a well known fact that the northern operations of PWA and Nordair supported the southern operations and made both of those airlines the only consistantly profitable airlines in Canada, next to Wardair, of course.

FICU...I appreciate your protectionist interests. I do. I understand them very well. You are being forced out of your comfort zone. The cat has been let out of the bag and hopefully it won't be as bad as anticipated. If your customers walk across the ramp, you'll either have to scream loudly that a hot meal, wine and a pretty check in counter is what they really really need and want. Or, you're going to have to be smart and play this one agressively and be the better player and get with it.

Never lose sight of the fact that:

1. The customer is always right.
2. The customer always seeks good value on their terms, not yours.

If you understand your customers well and are meeting their needs and demands, you have nothing to worry about.
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Re: How Low Will You Go?

Post by FICU »

bmc wrote:Never lose sight of the fact that:

1. The customer is always right.
2. The customer always seeks good value on their terms, not yours.

If you understand your customers well and are meeting their needs and demands, you have nothing to worry about.
I agree and I believe northern airlines will be matching Westjet without reducing service but you have to wonder how long that can last. I don't want to see northerners lose jobs and support because Westjet wants a new 1.5 hour sector added to their emormous network. In the grand scheme of things it seems, potentially, to be such small gain for Westjet and could be a huge loss for northerners because the northern airline structure can't support the low cost model. Northen airlines are soley owned by northern beneficiaries and are in the business of providing a needed service and keeping money in the north.

I think this thread has about run it's course... it will be an interesting summer.
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Re: How Low Will You Go?

Post by bmc »

Do me a favour and keep me posted. Please.
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Re: How Low Will You Go?

Post by Jastapilot »

I found a couple quotes in this article kind of humorous.

WestJet has landed

Herb Mathisen
Northern News Services
Published Thursday, May 7, 2009
SOMBA K'E/YELLOWKNIFE - The skies over Yellowknife got a little busier Monday as new kid on the block WestJet began its seasonal service between the capital city and Edmonton.

The carrier's first flight to Yellowknife was about half full.


A WestJet 737 arrives in Yellowknife on Tuesday afternoon. The Calgary-based carrier began seasonal service between Yellowknife and Edmonton on Monday, and will operate daily flights between the cities until Oct. 31. - Herb Mathisen/NNSL photo
"That's not unusual for the inaugural flight for a new route," said WestJet spokesperson Robert Palmer, who is pleased with the reception the company has gotten thus far in Yellowknife.

"People are, I think, aware of the fact that we have come to the market, but I am not sure if they are aware of our schedule and fares," he said.

The Calgary-based company will offer daily jet service between Yellowknife and Edmonton until Oct. 31.

Palmer said WestJet will mainly use its Boeing 737-700s – a 136-seat jet – for the route. Steve Loutitt, Yellowknife airport manager, said while the airport was busier than normal Monday, WestJet's first day went off without a hitch. He said adding the carrier will not congest departure gates or apron space on the tarmac.

"It's within the airport's capacity," he said. "The time that they are using the airport is a fairly quiet time." WestJet flies in and out of the city around lunch hour.

The airline announced its launch of a seasonal service to Yellowknife in December, fuelling a price war among companies that operate the route. Following the announcement, Canadian North president Tracy Medve said the southern company was "cherry-picking" routes, stating WestJet would erode Northern companies' passenger bases on the Yellowknife-Edmonton route, while they still kept operating many less-profitable routes to smaller destinations. On Tuesday, Medve said she didn't know what the long-term impacts of WestJet's arrival will be.

"It's a bit early to say, but I don't know if you have watched, the prices have fallen," she said.

Medve said anyone can now get a seat with any carrier between Yellowknife and Edmonton for $75.

She said airlines have had to slash prices to compete with WestJet – which Medve acknowledged "somewhat led the market to these low levels" – because flights aren't full.

Medve said she didn't know how long the low rates will stay.

"It's all driven by how many people are on-board the aircrafts," she said.

She said WestJet is adding more than 100 seats every day to the route, which is already being well-served by three carriers.

"There's no question there are too many seats in the market," she said.

She said Northern carriers have maintained service levels – namely the in-flight meal – while lowering fares.

"I hope nobody believes that you can actually provide an air service for $75 a seat," said Medve. "Not even WestJet can do that."

Palmer said the future of WestJet in the North will depend on how many customers choose them, adding the company always enters a market on a seasonal basis at first.

"The reason for that is we need to ensure that the demand is there. Specifically that it is there over the long haul," he said.

"From Yellowknife's perspective, if Yellowknifers like the service and they use it a lot, there is a good chance it will be back next year," he said, adding the demand will also determine whether service will be offered seasonally or on a permanent basis.

Medve said not all carriers operate like that. "While it may be irritating to the community, they have demonstrated that if they don't like the economics, they don't stick around," she said.

While some commuters who flew in on WestJet Tuesday said the personal television sets were a plus, one traveller said the service was not on par with Northern carriers.

"I'd rather support Northern airlines, but I had a credit," said the woman, declining to provide her name.

Adrian Burns makes about eight round-trips between Yellowknife and Edmonton a year for work. He's flown with all carriers, with his company paying his tickets.

"I think the company will go with the lower fares," he said. "That's understandable."
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Re: How Low Will You Go?

Post by FICU »

I heard the numbers dropped over the week to as low as around 30 people on one Westjet flight.

Tough times in Yellowknife these days.
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Re: How Low Will You Go?

Post by FICU »

Not only low on fares but low on people buying the low fares... heard Westjet brought in 28 hungry people to Yellowknife on a -700 a couple of days ago... yikes!
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Re: How Low Will You Go?

Post by Flightlevels »

Sounds like the average is around 60

I think it will get better by the summer. It's 60 less than the other guys had :)
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Re: How Low Will You Go?

Post by FICU »

Flightlevels wrote:Sounds like the average is around 60

I think it will get better by the summer. It's 60 less than the other guys had :)
What you have to realize is that more people are flying that othewrise might not be due to the very cheap fares. I know one northern airline is still running close to capacity even with Westjet around. Can Westjet make money with over half and sometimes over three quarters of the aircraft empty?
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Re: How Low Will You Go?

Post by Jastapilot »

FICU wrote:Not only low on fares but low on people buying the low fares... heard Westjet brought in 28 hungry people to Yellowknife on a -700 a couple of days ago... yikes!

How the hell did they manage to survive a 1.5 hour flight!? :roll: Are you really that desperate? :lol:
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tonysoprano
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Re: How Low Will You Go?

Post by tonysoprano »

28 people? Should have bought some pizza for the guests. Does this service include the jokes? Like, I ask cause I don't know how that would work, eh partner.
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Re: How Low Will You Go?

Post by stickontheice »

tonysoprano wrote:28 people? Should have bought some pizza for the guests. Does this service include the jokes? Like, I ask cause I don't know how that would work, eh partner.
Sure it does and it includes a great guest experience all apart of engaging the consumer. Funny where did I hear about re-engaging the customer...oh yeah the CEO of AC, Rovinescu. If you don't have that, you're Screwed, Brother!

Just love how fast everyone is jumping on the loads. Give it a year and then see where we are!
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Re: How Low Will You Go?

Post by WJ700 »

YUL and YOW to YYZ started out low too. Now they're almost always 100 plus. It takes a bit of time and if the people don't show... I'm sure WestJet will leave the market.
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Re: How Low Will You Go?

Post by FICU »

Jastapilot wrote: How the hell did they manage to survive a 1.5 hour flight!? :roll: Are you really that desperate? :lol:
You mean you're not hungry after a 1 hour prior check in, 10 minutes of taxiing, and a 1.5 flight? I sure am... unless I fly with a northern carrier. :) I recently flew on Air Canada across the country to Ottawa and they didn't even offer cookies or pretzels.

First Air Canada started charging for pillows and blankets... I was amazed... then Westjet started doing the same... even more amazed... will you now be considering losing the snacks too?

What has become of this industry!?
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Re: How Low Will You Go?

Post by bmc »

The low cost model grows the market. Consumers are more interested in cheap airfares than hot meals.

Was the Red Cross on hand to deal with the starvation? I can't go an hour without a full meal. I can't image what two hours must be like.
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Re: How Low Will You Go?

Post by Jastapilot »

Newsflash FICU: Westjet is in the airline industry, not the restaurant industry. Think about it. 8)
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Re: How Low Will You Go?

Post by crazy woman »

I went to Yellowknife on WestJet, 35 people up, 75 back. This was in the first week of their operation. I'm sure that the loads will pick up.
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Re: How Low Will You Go?

Post by mikeecho »

FICU wrote:
Jastapilot wrote: How the hell did they manage to survive a 1.5 hour flight!? :roll: Are you really that desperate? :lol:
You mean you're not hungry after a 1 hour prior check in, 10 minutes of taxiing, and a 1.5 flight? I sure am... unless I fly with a northern carrier. :) I recently flew on Air Canada across the country to Ottawa and they didn't even offer cookies or pretzels.

First Air Canada started charging for pillows and blankets... I was amazed... then Westjet started doing the same... even more amazed... will you now be considering losing the snacks too?

What has become of this industry!?
Incorrect. WestJet does not charge for pillows or blankets. They are available for free on every flight.

If a Guest would like a nicer pillow and blanket combo that they can keep and use again, those are available for purchase as well.
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Re: How Low Will You Go?

Post by FICU »

Jastapilot wrote:Newsflash FICU: Westjet is in the airline industry, not the restaurant industry. Think about it. 8)
Westjet does bring on restaurant food, if you can call it that, and charge people to eat it... sounds like a low class restaurant to me... no frills airline/low class restaurant... that's where our industry is at unfortunately.

Too bad you have to pack a lunch and haul your cooler with you everyday you go to work... think how nice it would be to have a free hot meal in the flight deck while you watch northern Alberta slide under you on your way to Yellowknife. ;)
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Re: How Low Will You Go?

Post by FICU »

mikeecho wrote: Incorrect. WestJet does not charge for pillows or blankets. They are available for free on every flight.

If a Guest would like a nicer pillow and blanket combo that they can keep and use again, those are available for purchase as well.
I stand corrected but why not provide your passengers with the nicer pillow and blanket in the first place? Why the two tier pillow and blanket scheme?
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Re: How Low Will You Go?

Post by jjj »

FICU,

I would prefer not to rely on any airline to provide me with nutrition (short haul) - I like to stay in shape and I like a little variety.
------
Also, I find it to be a very weird perception out there about airlines and food. Serve nothing and all kinds of bashing follows. Serve up a tired piece of meat on a stale bun with 2 grapes and 4oz of milk - "well dangit' we got us food!!! yeehaw!!!"

Airlines that serve or guarantee nothing are perceived as cheap in comparison to the many airlines that serve absolute rubbish - food which I politely declined the other day as I flew on a US carrier.
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mikeecho
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Re: How Low Will You Go?

Post by mikeecho »

FICU wrote:
mikeecho wrote: Incorrect. WestJet does not charge for pillows or blankets. They are available for free on every flight.

If a Guest would like a nicer pillow and blanket combo that they can keep and use again, those are available for purchase as well.
I stand corrected but why not provide your passengers with the nicer pillow and blanket in the first place? Why the two tier pillow and blanket scheme?
Airlines can do a lot of things:
- world class blankets and pillows
- steak and lobster
- black forest cakes

They could probably even pick you up at home and give you a massage on the way to the airport.

Problem is, this is not what he marketplace is demanding, and airlines like any other business need to balance the consumer demand with the ability to be profitable.

I read somewhere that WJ makes about $1300 profit on an average flight. That's essentially an industry leading profit (on the CNBC special featuring American Airlines, the flight that they profiled from JFK-LAX -B767- made something like $300 profit).

Now add in the extra's (conservative cost guesstimates):
- 136 packages of nice pillows and blankets (guesstimated at $3.00) = $408
- 136 hot entree meals (guesstimated at $8.00) = $1088
Total extra cost = $1496

With just those 2 items that probably 2/3 of the Guests could care less about, an industry leader in profit sees their flight now losing almost $200.

So I guess the question is...why would WJ or anybody else do it?

The days of regulation where ticket prices could be guaranteed to cover the costs of these items is long gone.

If it were that big of a concern for the traveling public, they would have flocked to an airline that did provide those services. Judging by the fact that so called LCC's have thrived (and been profitable) in the last 2 decades and virtually all legacy airlines that operate in competitive marketplaces have eliminated those services would indicate that the traveling public have spoken.
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Re: How Low Will You Go?

Post by FICU »

jjj wrote: ------
Also, I find it to be a very weird perception out there about airlines and food. Serve nothing and all kinds of bashing follows. Serve up a tired piece of meat on a stale bun with 2 grapes and 4oz of milk - "well dangit' we got us food!!! yeehaw!!!"
Try a hot meal from one of the northern airlines... a different class all together.
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Re: How Low Will You Go?

Post by FICU »

mikeecho wrote: With just those 2 items that probably 2/3 of the Guests could care less about, an industry leader in profit sees their flight now losing almost $200.
Then raise your fares to provide a nice pillow and blanket for some one stuck in your cabin for a lengthy cross Canada flight. And while you're at it please increase the seat pitch too.

Here's a question... is the word "passenger" removed from your vocabulary as part of being hired at Westjet? Are you punished if you are ever caught saying it? A "guest", to me, is someone who stays at a hotel and doesn't have to pay extra for the nice pillow and blanket. ;) Do you consider yourself a "guest" when traveling to the hotel in the crew van or a "passenger"? Would it be considered a 7 "guest" van or a 7 "passenger" van?

Hmmm...
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Re: How Low Will You Go?

Post by FICU »

Here's some news on the Westjet Yellowknife experiment... It seems that a Westjet spokesperson lied to a Yellowknife newspaper and told them their inaugural load was twice as much as what it actually was.
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Re: How Low Will You Go?

Post by jjj »

FICU,

Actually you do pay more for a nice pillow and blanket at a hotel.... hence the difference in room rates of a Motel 6 vs. a Hyatt.
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