WestJet and Its Plan to Start an Ultra-Low Cost Carrier

WestJet recently announced it's going to be starting its own ULCC. I'm honestly shocked that WestJet thinks this has a chance of succeeding at all. From all appearances this will be an airline-within-an-airline. There are really no examples of successful ventures of this sort1 and the list of failed airline-within-airlines is long2.

I presume that the motivation behind this odd decision is to attempt to compete against upstart Canadian ULCCs in their early stages like NewLeaf and Canada Jetlines.

I don't expect WetJet's venture to succeed. I think WestJet will have to eventually compete against the ULCCs the same way that the major US carriers are doing: offer unbundled fares, otherwise known as à la carte in order to entice price-sensitive fliers. The major US legacy airlines call these "basic economy" fares.

I think something akin to JetBlue's Fare Families would work very well for WestJet. They could continue to offer thier current product. But they could also offer a fare that doesn't include all of the same ammeities.

JetBlue Fare Families

  1. I don't consider Jetstar to be an airline-within-an-airline as Qantas operates the two airlines completely separately.

  2. Ted, Song, MetroJet.

Post header image is courtesy of Tomás Del Coro. Licensed under CC BY-SA 2.0.