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Compare strategies between Air Canada vs. WestJet

Introduction

These report focuses on comparing the strategies between air Canada and WestJet. It does this by first discussing a brief background of the airlines together with their objectives. In addition, the paper goes a mile further to discuss how the two airlines carry out their market research and also the marketing tools they apply. Furthermore, it also gives an opinion on whether their strategies are in line with their objectives. Moreover, it also discusses the similarities and differences between the airlines’ strategies not forgetting the influence of the national or local government on their strategies. The conclusion gives a brief summary of the entire report.

Air Canada

Air Canada is a the largest full service airline in Canada and also the largest schedule provider of passenger services for fights within Canada, to U.S. and to all other major international destination to where it operates. Today the airline serves more than 32 million customers every year and its flies to more than 170 destinations in five continents. In a member of Star Airline which is the world’s number one air transport network. Nevertheless, it is the 15thlargest commercial airline in the globe and has approximately 23,200 full time employees. It has a market share of about 80% in Canada and its prime competitor is WestJet Airline (Air Canada 12)

Major objectives

✓ To protect and enhance the corporate brand through effectively communicating a steady message of reliability, luxury, safety and accountability to stakeholders in timely manner.

✓ To be the profit leader among the major airlines.

✓ To enhance a strong entrepreneurial culture

✓ To be a proud standard bearer for Canada.

✓ To demonstrate leadership in the facilitation and development of market based approaches in order to reduce, offset and manage emissions.

WestJet

WestJet Airlines is a low cost carrier based in Canada and it provides planned and charter air service to over 88 destinations in Canada, Central America, Mexico, Caribbean, United States and Europe. It is the second largest air carrier in Canada after Air Canada. It operates an approximate 425 flights and has around 45,000 passengers per day. It is a public company with over 9,600 employees. Unlike Air Canada which is a member of Star alliance, WestJet airline is not a member of any airline alliance. To increase its efficiency and market share, the company has engaged in various partnerships for instance, in 2005 the company entered to an agreement with China Airlines based in Taiwan (About WestJet 16).

Major objectives

✓ To protect and enhance brand health as well as introducing new products or business lines in Western Canada.

✓ To generate brand awareness and promote trial on the core product as well as business lines and new products in Eastern Canada.

✓ To hypothesize an onsite sponsorship activation vehicle for its new initiative (fun ‘n festival) which focus on pulling all sponsorships of festivals.

✓ To make its vehicle adaptable to various kind of events both indoor and outdoor at different times of the year.

Both Air Canada and WestJet airlines carry their market research on their own. Market research has been one of the most important tool in ensuring the growth and development of this airlines. The Airlines carry out the market research regularly with an aim of understanding their customer changing needs and preferences hence responding to them immediately.

Marketing tools

Airline Industry has become so competitive requiring companies to employ various marketing strategies in order to gain a competitive edge in the market. Air Canada uses various methods to market its products and services. The most featuring methods used by the company are traditional print, broadcast and internet media. The company has developed various internet media namely Facebook and YouTube an outstanding example being the Go Far Vancouver Olympics in 2010 where it used Facebook and YouTube to market its services. The aim of this advert was to make honor to all Canadians who travel very far to take the initiative to broaden their horizon in order to attain greater heights of excellence.

Nevertheless, the company uses its website to communicate important information about its products and services to its customers. Furthermore, it offers online services to its customers whereby they are able to use electronic ticketing. Finally, the company uses promotional marketing whereby its potential young traveller’s social media students and interns Air Canada offer cheap flights and discounts.

On the other hand, WestJet is well known for its application of social marketing tools to communicate its products and services. WestJet uses its website to market its products and services. For instance, through its website the airline is able to carry out electronic ticketing as well as offering various costumers holiday bookings. Nevertheless, through the website the customers are able to create an account through which the airline is able to create awareness of its brands to its extreme customers (Jang 214). In addition, the airline uses other social media such as Facebook, YouTube and Twitter. Moreover, WestJet also uses newspapers, journals, magazines, televisions, radios, cinemas, and outdoor communications to deliver product attributes to the potential customers (WestJet 46).

Opinion

According to my opinion, the strategies and marketing methods used by WestJet and Air Canada airlines are enough to enable the companies attain their objectives. This is because each of their strategies and marketing methods are directed towards attaining a given objective. This is true because in away the two airlines have been able to attain some of this objective that’s why Air Canada is the largest airline in Canada while WestJet is the second largest Airline in Canada. Generally, their strategies and marketing communication methods have played a great role in ensuring that the two companies increase their market competitiveness relative to their competitors not only in Canada but also in the globe.

Similarities and differences between Air Canada and WestJet

Both Air Canada and WestJet are well known for using more similar marketing communication methods. For instance, both the companies have adopted the use of the internet to market their products and services to their customers. For instance, through their websites the airlines are able to communicate important information to their customers wherever they are. Customers are able to create their own accounts of the company’s website where by they are able to do electronic booking of tickets. Nevertheless, they also use social media as a source of marketing communication through the Facebook, Twitter and YouTube.

In addition, both companies focus on ensuring quality customer service. They do this through the provision of friendly and efficient flights providing their customers with a comfortable environment as they travel. Both companies have comfortable planes and a well-developed entertainment system which keep customers comfortable throughout their journey. They have an excellent team of employees who care much about their customers. Actually, this has been one of the key strategies of ensuring their success in the airline industry market.

Moreover, both Air Lines are well known for offering lowest prices within the whole airline industry. This is following it benefits accruing from economies of scale. Pricing strategy plays a great role in building the image of the company thus helping in enhancing the competitive edge of the company. The air Lines thus use this tool in realization of their planned corporate goals. Nevertheless, both airlines also offer flexible prices as well as discounts to its clients. These discounts usually benefit those clients who subscribe to the company’s services frequently.

WestJet is well known for its application of the price-leading strategy. The company is one of the most successful airline companies in Canada. The company has ensured low cost model through enhancing lower staff costs. It does this by employing few employees to take part in its operations. In addition, the company has ensured price leadership strategy through enhancing lower maintenance and training costs through the use of Boeing 737 airlines (Boeing 757 Active with WestJet Airlines 64). Nevertheless, the company offers lower food costs, more efficient flight schedule and service model through the use of A to B model. Finally, the airline ensures lower ticketing costs and distribution overhead. The company is said to be among the first in the use of electronic ticketing and direct consumer phone bookings.

On the other hand, Air Canada also focuses on price leading strategy but for it has worked at a slow rate. First, unlike WestJet, Air Canada makes use of a web and spokes model which creates problem in the hub cities thus increasing structure costs. In addition, though the use of the strategy Air Canada takes a lot of time and energy to ensure low cost models (Air Canada 14).

Furthermore, Air Canada is well known for its corporate strategy of alliances. Air Canada is a member of Star Alliance which has been strength in promoting airline business globally. Actually, the company is a founder member of the alliance. In addition, through the alliance the company has played a brokering and ensured role as far as relationship with other major carriers of the world such as United Airlines and Lufthansa German Airlines. In this strategy, governments are involved in negotiating international routes. On the other hand, WestJet does not enjoy the benefits of being in an alliance since it is not a member of any alliance.

National/ Local government policies influence on Air Canada and WestJet strategies

The government of Canada controls the two Airlines through its agency Canadian transportation Agency. Some of its policies influence the airlines positively while others affect them negatively. The Canadian Transportation Agency is always in the fore front for fighting for the travellers’ service by the airlines. For instance, it has policies which require the airlines to compensate the travellers for delayed bookings. For instance, Air Canada was fined for delaying travellers on the runway due to overbooked flights. This ruling affects only the domestic Canadian flights.

In addition, the local government of Canada also plays a role when it comes to airline domestic tariff decisions by the two airlines. The tariff is usually a contract existing between the passengers and the air carrier. The contract analyses issues to do with rates, fares, charges and terms and condition. The government through its transportation agency intervenes the contract in order to ensure that one side does not take advantage of the other.

First and foremost, the government policies have played a significant role in ensuring the workability of Air Canada star alliance. The government of Canada has been in forefront in negotiating international airline routes together with other governments whose air lines take part in the alliance. In so doing, the government have helped Air Canada airline stand proudly as an international Airline.

In addition, government policies have been the guide to the growth and development of both Air Canada and WestJet airlines. Government through it policies authorizes all the transactions involving the two airlines. Nevertheless, the government policies such as taxation policies also influence the airlines strategies. For instance, the airlines need to maximize their profits in order to provide the government with a substantial amount of revenue each financial year.

Conclusion

Airline industry is growing to be one of the competitive industries in the world. As a result, it requires companies to adopt strong marketing strategies in order to gain competitive edge in the world market. Air Canada and WestJet have used various strategies which have been of great influence to their success in Canada and world market in general. Regular marketing research has played a significant role in helping the airlines learn their changing customer needs and preferences following the ever changing world environment. Use of advanced technology in the name of internet via social media such as Facebook, YouTube and twitter not forgetting the website have been the major communication strategies applied by this airlines. As a result, the airlines have stood to be number one and two largest in Canada.

Government has also played a role in the growth and development of the two airlines. It has done so through provision of favorable airline policies which have seen the companies avoid fines hence increasing their efficiency. In the case of Air Canada airline the government has helped in negotiating its international airline routes together with other world governments whose airlines are members of Star Alliance.

Air Canada and WestJet have played a vital role in ensuring the social responsibility. The Airlines have ensured this by providing quality products and services to all communities they operate in and more particularly in the country of origin Canada. Nevertheless, they have provided various job employments to the members of the community both nationally and internationally irrespective of gender, cultural differences, race religion among others. Nevertheless, their quality customer care services have been a key element in enhancing the airlines success in the industry. With its flights in various parts of the continents in the world, it’s another implication that the Companies are conscious about social responsibility.

All in all, Air Canada and WestJet airlines have linked their objectives to their strategies something which have seen the airline achieve the objectives. The future will be enhanced by their continuous expansion of its services to countries where it does not operate as well as implementing quality marketing strategies. Nevertheless, their great need for the companies to focus on increasing their efficiency in their operations in order to cut costs associated by poor planning. Finally, there is also a great need for the airlines to integrate further technological systems with respect to the changing world environment in order to grow to a foreseeable future.

Work Cited

About WestJet. WestJet. 2013-03-01. Retrieved 2013-03-01. Print

Air Canada. About Air Canada. 13 Feb, 2013 Retrieved from http://www.aircanada.com/en/about/index.html. Print

Air Canada. 2011 Annual Report. 2011 Retrieved from http://www.aircanada.com/en/about/investor/documents/2010_ar.pdf. Print

Boeing 757 Active with WestJet Airlines. Airfleets.net. 17 January 2013. Print

Jang, Brent. WestJet closing gap with Air Canada. (2010-02-20). The Globe and Mail (Toronto). Retrieved 2010-02-20. Print

WestJet. Investors Relations. 2013. Retrieved from http://www.westjet.com/guest/en/about/index.shtml. Print