Watching WestJet Airlines Ltd.’s battle for business travellers in Canada is a bit like watching the little guy in a fight with one arm strapped behind its back.
The Calgary carrier’s relatively small fleet of all-economy 737s has put it at a considerable disadvantage in winning corporate clients to Air Canada with its top-notch business offering. But WestJet has recognized the importance of the market and is fighting to boost its share.
While leisure travel provides the bulk of the business for most airlines, it is the consistency of business travellers that keeps them aloft in tough economic times. WestJet has no plans to add a business class section in the near future, but that hasn’t stopped it from making its fleet more attractive to corporate clients with the addition of live TV, satellite radio and making its seats leather and larger.
“We’re doing incredibly well in the leisure market,” said Duncan Bureau, WestJet head of sales and business development. “The business traveller represents a significant opportunity.”
WestJet estimates that roughly 40% of it traffic is currently business travellers. In order to boost that figure, the airline has formed a small corporate sales team, which has signed up more than 1,000 clients in the past 18 months, including Wal-Mart and the Hudson Bay Co., by offering them performance-based incentives and other perks like access to third-party lounges.
At the same time, it has increased its offerings to corporate travel management companies like American Express, Carlton Wagonlit, and Vision 2000.
Next spring, the airline will have its own loyalty program when its agreement with BMO/Air Miles expires in April 2009, Mr. Bureau said, although details are still being hammered out.
U.S. low-cost carriers such as Southwest Airlines and JetBlue Airways have been faced with a similar challenge with their single-class configurations.
This has forced them to be more creative in how they win business travellers, including offering fully refundable fares, front of the line boarding, and the ability to buy better seats on the plane for business travellers. Mr. Bureau said WestJet is looking at offering similar incentives.
But Robert Kokonis, president of AirTrav Inc., a Toronto-based aviation consulting firm, says if WestJet is serious about winning the hearts of corporate clients, it needs to increase the number of business destinations and frequency to those destinations. “They need to increase their penetration,” he said.
He added that Monday’s announcement that WestJet would begin selling tickets on Expedia.com will not only be a boon for U.S. point of sale for leisure travellers, but will include the airline on Expedia’s corporate travel site, which should make it more competitive in the one or two U.S. business destinations it plans to add a year.
Spurring the need for WestJet to get a competitive business product is the fact that the airline is looking to sign up international carriers, such as Cathay Pacific Airways and British Airways, to so-called interlining deals, where it would shuttle their inbound passengers across its network in Canada. However, concerns have arisen about transferring first-class passengers from those airlines to what amounts to a premium economy airline with WestJet.
While Mr. Bureau said he wouldn’t rule out WestJet adding a business class in the future, he thinks the airline offers a competitive product already for any such interlining deals, particularly on short-haul routes.
“Currently, there is no plan to add a business class,” he said. “But I think what we’ve learned at WestJet is to never say never.”