WestJet, which in 1996 began as a low-cost alternative to the country’s competing major airlines, is now 20 years old. The company has two decades of airline success stories, but the last 3 months have brought with it more economic turbulence than it had probably anticipated.
The declining loonie and uncertain economic weather have been the primary causes for Westjet’s economic issues. In the last three months, the company posted a 30 percent decrease in its fourth-quarter profit and reduced around 88 flights citing a downturn in oil prices.
When the company was already going through some troubles, it also faced a sexual harassment allegation from one of its ex-flight attendants. The case which was a potential class-action lawsuit alleged workplace harassment and failure to provide a safe work environment.
The rising economic pressure was attributed to the fact that 25 percent of WestJet’s flights originated at Alberta. Rising unemployment and the uncertain economic weather in Alberta made the company vulnerable.
WestJet’s main strategy has remained using its lower prices a bait to get travelers to switch from pricier airlines like Air Canada. However, this would increasing be difficult in tough economic times and impact the airline industry as a while, industry experts feel.
Maintaining the company’s brand is also becoming difficult as WestJet goes through these troubles. It now seems that it has moved away from being a cheaper-than-Air Canada brand to a brand of airline that offers good customer service and cares about its travelers.
The new image of being a brand that cares about people is now being threatened by the sexual allegation court case that could in the future even possibly turn into a class-action suit. The lawsuit alleges that WestJet did not properly investigate the complaints made by the ex-flight attendant and chose to fire her instead, while protecting the pilot.
WestJet however defended itself and said it had immediately launched an internal investigation into the alleged sexual assault and that it was unable to conclude the pilot was guilty. However, it remains significant that after the lawsuit, many more employees did come forward with information about harassment.
The company has also faced some pressure from its employees, and has held a series of employee pep talks to boost employee morale in these uncertain economic times. Other employees have also attempted to form unions, but the efforts were thwarted as 55 percent of pilots voted against the move.
WestJet needs to step up its game to make sure its customers still continue preferring it over Air Canada.
Photo by jamesz_flickr