WESTJET EYES FEES
Company considering new services, charges
Westjet sees the opportunity to double its revenue from extras such as bag fees and other services, but is wary of the “slippery slope” of charging for one checked bag.
The Calgary-based airline makes on average $7.50 from each passenger between July and September, on top of the fare price, CEO Gregg Saretsky told an investors conference Thursday.
That revenue would come from charges such as the $20 fee for a second checked bag, food and alcohol sales, and service fees.
Westjet said this month it is considering installing — and charging for — so-called premium seating, which offers wider seats and more leg room.
While Saretsky said he thinks there’s the opportunity to double that $7.50 collected per guest, the airline is cautious about the most obvious charge on the radar.
“Of course we haven’t yet gone down the slippery slop of charging for a first bag,” he told the Raymond James conference, adding that its website will allow passengers to bundle services this year, which will add revenue. “But it’s something the industry has done and we’re watching and that’s potentially a future significant source of ancillary revenue from charging for first bags, but we want to be very careful. Obviously there’s a trade off with brand, reputation, loyalty. We have to tread very carefully.”
Air Canada charges $25 for one checked bag on flights into the U.S., on top of the $35 fee for a second bag on any flight. Westjet’s $20 second-bag charge is to any destination.
Saretsky also provided a little more information about WestJet’s plan to operate a regional airline with about 40 turbo prop planes, which is being voted on by its employees.
He said it will operate as a second company, owned by Westjet, mimicking the existing model in that it would be a single plane type allowing for more efficient training of pilots, crew and maintenance.
“We’re not messing with our business model,” Saretsky said, adding Westjet feels it’s an opportunity to shake up the industry the way the airline did when it began in 1996.
The separate airline, flying to smaller centres where the passenger numbers can’t fill Westjet’s 737s — such as between Winnipeg and Regina — will be centred in Calgary and Toronto, he said.
Westjet expects that the regional flights will help drive people onto its existing network.