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Company Research-Westjet Airlines Ltd Love is in the air - there were 10 marriage proposals on board WestJet flights in 2000. Everyone said yes. Commercial used by WestJet Airlines Ltd in 2000. Introduction and Brief History: WestJet Airlines Ltd is a very profitable Canadian airline company that was has been amazing both investors and researches with the modern approach to doing business, as well as the passengers with the exceptional quality of service and constant price reduction policies for the existing customers. In the following essay I will attempt to present my research on WestJet Airlines Ltd and express my personal opinion and findings on this airline giant. WestJet was created by four Canadian entrepreneurs in 1996, who wanted to create an alternative to the existing airline companies to cover the airspace across western Canada.
The entrepreneurs used the simple leadership strategy follow the leader and initially mimicked the successful companies of the North America like Morris Air, Delta, and Southwestern Airlines to apply their successful approaches to Western Canada air-travel market. In 1996 the team of four had been working extensively to create a suitable for Canadian conditions financial model and crafted the business plan of their new company to attract the needed capital for the company establishment. Their endeavors proved to be successful and after careful evaluation by the local business community that lasted only one month the 4 entrepreneurs received the funds they needed (Smith, 2001). The company started with only three Boeing 737 - 200 airplanes, yet within a few months the company went public immediately attracting investors from both Canada and the USA and obtaining the capital that was sufficient for the full scale air-commerce operations in Canada.
WestJet Airlines Ltd. started initially with the route to Vancouver, Winnipeg, Calgary and Edmonton employing less then two hundred people. The success was apparent and at the end of 1996, WestJet Airlines Ltd added three more Canadian cities to their flight map: Victoria, Regina and Saskatoon. By the end of 1998, WestJet Airlines Ltd.
had covered almost all major cities of Canada due to its great marketing techniques and expansive policies. Second public offering that took place in July of 1999 offered additional 2. 5 million common shares that were quickly sold out (Bergman, 2000). This step made the WestJet Airlines Ltd. an actively traded public company and had furnished the necessary capital for the companys further expansion. The company started to aggressively purchase aircraft and build additional offices and Hangar facilities to meet the ever increasing companys workforce.
The four entrepreneurs were lucky to see the unique opportunity in the Canadian Airline industry to serve at a very low cost additional routes across the country. Already in early 2000 WestJet Airlines Ltd. established its presence on the Canadian East Coast serving extensively the province of Quebec and establishing the airline hub in Hamilton. (Please refer to the appendix A for the modern day coverage map of WestJet Airlines Ltd. ) For such outstanding work the WestJet Airlines Ltd. founding fathers were rewarded numerous rewards Entrepreneurs of the Year for bringing so much positive change in the lives of the Canadian fellow citizens. After receiving the reward and public recognition the four entrepreneurs immediately bought four new Boeing 737 aircraft.
The company has also opened new routes to the Canadian province of Ontario (London, Toronto) and took pride being Canadian admired and well loved airline company with low fairs and competitive pricing policy. The Year 2002 the company met with the public recognition and unstoppable profit growth since the company inception in 1996. Body: Reasons for Success (management style, employee commitment, market targets, and quality service). Currently WestJet Airlines Ltd. has 23 airplanes in its fleet and has moved 10 million people since the company inception in 1996 (Verburg, 2000). The company possesses the staff of 1700 people and covered 17 cities in Canada, namely Victoria, Prince George, Vancouver, Calgary, Edmonton, Saskatoon, Grande Prairie, Winnipeg, Hamilton, Ottawa, and Thunder Bay.
The company has been growing at an average rate of 55 % annually since 1996 despite the common notion that with size companys growth is supposed to slow down. The company operates only one type of airplane, Boeing 737 - 200 due to friendly trade relations with the Boeing company. Being modeled after the Canadian Air Leader, SouthWestern Airlines, WestJet Airlines Ltd was second to it profitability wise with an operating margin of 20 % pre-tax pre-profit sharing. The company success has been attributed to the fact that it is closely aligned the interests of its employees with the interests of company.
This can be seen from the profit sharing strategy deployed at WestJet Airlines Ltd where all of its employees are profit-sharers and 85 % of them buy the company stock on a monthly basis. The company allows its workers to receive to 20 % of their salary in WestJet Airlines Ltd stock through the share purchase program. The company has been paying particular attention to its workforce considering it the WestJet Airlines Ltd most important and valuable resource. As the companys HRM officer in the Ottawa office said We hire on average one person out of every 100 applicants and pay much attention to the attitude. The retention of the existing employees once they are in the WestJet Airlines Ltd team is not difficult at all (Bergman, 2000). The company stresses the material aspect of the current employee retention program allowing them an opportunity to participate in the creation of profit and wealth everyday.
Speaking about its employees, the Mr. Robertson said that being in the people business that airline industry represents requires employees to be very energetic, enthusiastic and always innovative, that upholds the innovative tradition of the WestJet Airlines Ltd. (Verburg, 2000). Strategies for staying successful The company is constantly attempts to go forward due to the belief that if the company is not going forward, it automatically going backwards (Bergman, 2000). WestJet Airlines Ltd, as a result of such policy has various agreements with Boeing and GECAS (General Electric Capital Aviation Services) to provide WestJet Airlines Ltd with 36 airlines over the next eight years, which would be both incremental and replacement aircraft depending on the current state of the economy in Canada.
The WestJet Airlines success, in my opinion, would also be contributed to the economic slowdown of Canada should it occur for the fact that people are more cost-conscious in slower times and look more aggressively for lower airfares. WestJet Airlines Ltd has already lowered airfares in the markets in Canada on average by 50 % on an equivalent ticket-to-ticket basis. Which means that seven day advanced tickets price is at present 50 % less than it was five years ago, while the walk up fares are approximately the same. The company also pays extremely important role to the marketing of its services to the citizen of Canada and the USA who recently started to use WestJet Airlines Ltd on their business travel around Canada.
WestJet Airlines Ltd markets its services through a combination of the direct advertising and the Internet. As a matter of fact, 32 % of the company business is done over the internet and the corporate web site. The company also does direct marketing uses extensively its local call center that accounts for about 70 % of the corporate business. The company also uses the free-of-charge marketing, a.
k. a. word-of-mouth referral since the company claims to have tremendous support from its customer base, yet it does not make any estimates regarding to what portion of business the word-of-mouth referral accounts for. The company can boast a rather large average load factor of about 72 % in 2002 that is already 2 % higher than the load ratio of the year 2001. The target market of WestJet Airlines Ltd: The companys target market is the visiting friends of Canadian nationals, relatives, as well as cost-conscious business people of both Canada and the USA. At the company inception in 1996 when the flights were rather infrequent, the target market for such flights remained exclusively friends and relatives who traveled across Canada, yet with the corporate expansion and the increased flight frequency more and more business people started to use the services of WestJet Airlines Ltd.
For instance in 1996, the company had only 2 flights / day from Calgary to Vancouver and in 2001 there are 10 flights a day making the flexible schedule teamed up with low rates rather appealing to the business clients. The company in 2001 started to enter the cargo shipment business, which now is only a marginal 1 % of the total revenue stream to the company. Another successful strategy that WestJet Airlines Ltd has adopted is the symbiotic relations with the Ramada Inn thus making a famous WestJet Holiday package. A client that wants to visit his friends in another Canadian city to play golf does not have to worry about accommodation or meals but pay a single price: West Jet takes the customer there and back, while Ramada Inn takes care of the accommodation. Also Ramada Inn has lately started individually promoting such packages in various media (trade journals and radio), thus reducing direct marketing expenses for West...
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Research essay sample on Company Research Westjet Airlines Part 1
