Westjet ironing out wrinkles
The changes underway at WestJet Airlines Ltd. have started to create some growing pains as the Calgary-carrier looks to evolve past a one-sizefits-all airline.
Senior management acknowledged in a memo to staff obtained by the Financial Post that the rollout of its new premium economy seats and fare bundles has been rougher than they had hoped.
The new class of seating, or its so-called Plus product, gives passengers added legroom in the first three rows of the plane and offers other amenities, such as a second checked bag and priority boarding, for a fee. But its soft launch in recent months has also created some tension between WestJet’s front-line workers and its customers.
“We underestimated the impact that the complexity and magnitude of this change would have on both WestJetters and our guests,” acknowledged Bob Cummings, WestJet executive vice-president of sales, marketing and guest experience, in an email to WestJetters dated July 8.
WestJet began offering the Plus product to its customers this spring at a flat $45 fee during online check-ins at the airport and on the plane. Eventually, the airline plans to price the premium product based on the length of the flight as it rolls out new fare bundles on its reservation system.
The airline had originally planned to have the new fee structure in place by July. But Cummings said Tuesday that it won’t be rolled out across the network until August.
Meantime, the carrier is working out the kinks of its buy-up program, he said.
For example, flight attendants raised concerns about the roomier seats in the exit aisles, in the middle of the plane, being included in the Plus fare because of the challenges that creates for priority boarding and complimentary food and drink.
Those exit-row seats are now only going to be part of a pre-reserved seating plan, not the full Plus product, Cummings said.
“We’re running through trials and we’re working through that now,” Cummings said, adding he has heard some complaints from customers.
“It has been an issue. I have heard about it,” he said.
The changes are at odds with WestJet’s customerservice model and its efforts to drive up revenue, said Ben Cherniavsky, a Raymond James analyst.
“The products have not been well received by either WestJet’s ‘guests’ or its employees,” Cherniavsky said in a note to clients Tuesday.
He said there have been reports of confusion about the new prices from customers and complaints from flight attendants who are forced to act as “seat referees” on flights where premium seats remained unsold and passengers try to move to them free of charge.
“We expect WestJet to make some changes that are designed to address these issues. However, to the extent that the market may be expecting to see some positive contribution to (yields in the second half of the year) from either of these two variables, we believe there may be some risk of disappointment,” he said.
It also comes at a time WestJet is launching its low-cost carrier, Encore, some of its larger planes are not equipped with inflight entertainment because the carrier hasn’t decided on a new system yet and the satellite feed on its Live TV is inconsistent, depending on the route.
But Cummings said in the email to employees that the “one-size-fits-all pricing strategy” WestJet used to have doesn’t afford it the flexibility it needs to accommodate all of its guests’ needs.
Fare bundles and the premium economy seats will add about $50 million in annual revenue, he said.
He said the company would work with its advertising agency to launch a campaign this fall aimed at better informing the public about the fare bundles and Plus products.