INTRODUCTION The purpose of this report is to represent a SWOT analysis for a WestJet Airlines Ltd. “SWOT is an acronym describing an organization’s appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats. ” These factors will determine the success or failure of any company. This WestJet SWOT analysis is done at the level of the entire organization and is a useful tool for understanding, decision-making and achieving company’s corporate goals and objectives.
Based in Calgary, Alberta WestJet was founded in 1996 by a team of Calgary entrepreneurs as a Western Canadian regional carrier with just a few aircrafts flying to five cities. Today WestJet is one of the most profitable airlines in North America offering scheduled service to 55 destinations in Canada, US, Mexico and Caribbean. The mission of WestJet is to enrich the lives of everyone in WestJet’s world by providing safe, friendly and affordable air travel. WEAKNESSES
Opposite of strengths are weaknesses – attributes of the organization that impede achieving the objective. Knowing weaknesses of a company we can try to minimize them in order to succeed. WestJet as any other airline has its weaknesses as well as strengths. The goal of corporate executives and managers is not to totally eliminate all of the companies weeknesses but rather to attempt to minimize their effects. Despite their affords to make their all-economy Boeing 737s more appealing including leather seats and satellite television- WestJet does not offer a business class.
Having only one kind of jet – that is a medium range, single aisle, narrow body jet airliner Boeing 737- the company is limited regarding guest capacity (no more than 136 passengers) and range fully loaded (no further than 6200km). This leads to another weakness which is their inability to fly long distances. This weakness is leaving Westjet behind its competitors as far as overseas travel goes. Its competitors can still offer more direct domestic flights and the price they provide is not relatively comparable to WestJet’s rates.
Marketing professionals have questioned whether WestJet’s roots as a leisure carrier and its reputation for subjecting passengers to groan-eliciting jokes and skits sits well with the corporate crowd. This marketing approach may not serve the company well as it attempts to expand into new markets and the company may need to revisit this marketing strategy. The Calgary carrier has been stunted in recent years by the troubles it has faced implementing a new reservation system (SabreSonic). This caused the delay of new frequent- flyer program and delayed the launching its new credit-card loyalty program.
While West-Jet tickets can be purchased with Air miles, rewards can no longer be redeemed by travelling on the airline. The airline’s current Open Skies system lacks the functionality it will need to allow for such things as forging code-share with other carriers. Threats: Threats are external unfavourable factors that can potentially affect the success of the company in a negative manner. WestJet is either currently or has previously encountered the following threats. H1N1 Flu Virus: The threat and the spread of the Swine Flu virus and other viruses has had a negative effect on the airline and travel industry in general.
With the recent fear of the H1N1 flu virus, many potential clients of the airline have been hesitant to travel, not only to Mexico where the virus seems to have originated from, but also negatively affecting other destinations as well. On May 5th the Canadian Press quoted Sean Durfy, WestJet’s president and CEO, as saying “The recent H1N1 influenza virus outbreak appears to be delaying some consumers’ travel bookings; however, it is too early to determine how it will impact RASM (revenue per available seat mile).
Despite these conditions, we are confident in our business model and our organization’s ability to continue on our profitable path. ” While the H1N1flu virus is somewhat of a temporary threat in that we are finding that the effects are not as serious as what was initially portrayed in the media, still there will likely be other viruses that may have a similar impact on the industry. WestJet has responded to this threat by helping stranded passengers get home safely. This move will no doubt go a long way in building even greater confidence in the airline.
Recession: The current economic recession has had a negative impact on the airline industry. “WestJet Airlines Ltd. (TSX:WJA) hit some financial turbulence in the first quarter, with its profit falling by 29 per cent compared with the same time last year to $37. 4 million. Lower fuel costs partly offset lower demand, which resulted in a three per cent decline in revenue to $579. 3 million for the three months ended March 31, the Calgary-based airline announced Tuesday ahead of its annual meeting. Earnings per share fell to 29 cents in the quarter, down from $52. million or 40 cents per share in the comparable period of 2008, when revenue was $599. 3 million. ” – The Canadian Press, May 5, 2009. The length and depth of the recession combined with the company’s management and marketing skills will determine the airline’s success over the remainder of this year and going forward into the next decade. References: 1. Crane, F. G “Marketing, 7th Canadian Edition, 2006”, McGraw-Hill Ryerson, Canada. 2. www. nationalpost. com “WestJet hits another rollout delay”, May 07 2009, Scott Deveau. 3. www. marketingfit. com “SWOT Your Podcast”, June 25 2007, Leesa Barnes 4. ww. thestar. com “WestJet enters three-way race for business traveller”, June 09 2007, Chris Sorensen. Threat: Flu Virus WestJet Airlines warns of bumpy quarter TheStar. com – Business – WestJet Airlines warns of bumpy quarter The Toronto Star http://www. thestar. com/business/article/629589 May 06, 2009 Chris SorensenBusiness Reporter Threat: Recession From The Canadian Press, May 5, 2009 – 11:29 a. m. WestJet Q1 falls 29 per cent, Q2 also looks weak By The Canadian Press http://www. canadianbusiness. com/markets/headline_news/article. jsp? content=b05958815=markets=rss