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Flying under the radar: Why WestJet may be missing an opportunity with its premium economy class

Blog post by Mark Satov

Nothing like a long flight to clear my mind! I get uninterrupted time with my email inbox, my list of overdue pursuits and just delightful solitude. Oh and write a blog post…like this one!

Today I am flying back from some client meetings in Vancouver.  And the flight is delivering on all of the above. I got on the flight early to get settled and had some orange juice served to me by a very friendly attendant. I have lots of space in between me and my neighbour and plenty of legroom.  It is nice to be able to afford business class…isn’t it? Maybe for some, but I am actually flying in WestJet premium economy. The Air Canada business class fare was $2,800…EACH WAY…while I was able to purchase WestJet premium economy for only $600, a premium of about $150 over the regular economy seat.  Other than the food, which I admit is basic at best, I don’t feel like I am giving up anything versus an Air Canada business class ride.  I must be missing something…why don’t all business travellers do this?

There are many reasons actually. For starters, WestJet doesn’t target business travellers as much or as well as Air Canada does. Business travellers like to fly on the company’s dime and then use the points earned to take their families on vacation. WestJet’s loyalty program may as well not exist for all its applicability and resulting engagement. On a related point, frequent business travellers will often not have to pay for the business class upgrade as their status guarantees them same for free with reasonable frequency. And business travellers like fancy lounges that seem exclusive. Air Canada’s is just ok, but it is better than WestJet’s…which doesn’t exist.

But there is more to it than that. Because WestJet came to market as a discounted alternative to Air Canada, their brand is much more ‘cheap and cheerful’ than it is ‘luxurious and sophisticated’. And for many who can afford luxurious and sophisticated, being seen on the cheap and cheerful airplane just doesn’t fit. The problem for marketers is how to identify who would pay more the big, red and snarky and who would save the dough, use the AMEX lounge and opt for the friendly blue skies of WestJet. Take me for example: my demographic data would probably cause a marketer to put me into the ‘luxurious and sophisticated’ segment: I am 44, work in the knowledge sector, travel frequently and earn enough to be in the top one-percent. But my attitudinal data (if they had it) would force them to rethink: I have a cheap streak, am funny about charging clients for luxury and have a bit of a hate on for Air Canada as a hangover from their allergy policy and their general snarkiness.

So what should WestJet do? Hike the prices for premium economy? Market themselves as the leading business airline in Canada? Hire me as a brand ambassador? The latter is probably the easiest decision, but if I were them I would additionally consider the following:

  1. Do they know enough about who chooses them, for which occasion, and why? Do they go beyond demographic segmentation to truly understand the profiles of their travellers?
  2. Is there a large enough segment of business travellers like me who see their premium economy as great value for money? Does their lack of international routes make winning corporate share a non-starter?
  3. Can they create a real loyalty program? Who would that help to attract and retain?

If nothing else I would advise them to run a test for a prescribed period of time: market their premium economy more aggressively, get some real food, work a partnership with one of the lounge companies and monitor who they win over and why.  I can’t be the only smart traveller up here.