Air Transport World

WestJet defies the odds.

Canada's upstart prospers with a formula of low fares and simplicity

The experts said you couldn't run a successful low-fare airline in Canada using a US-type business model such as Southwest or Valujet. The population base was too small and too dispersed, you couldn't get the frequency, there weren't enough large population centers. Besides, leisure travelers took charters, or waited for the inevitable fare sale from the two main carriers, Air Canada and Canadian Airlines. Or they drove...

Well, the experts were wrong and the proof is fast-growing WestJet. The Calgary-based airline, which began operations with three 737-200s on Feb. 29, 1996, has made money in each of the past three years as revenues have grown from C$37.3 million in 1996 to C$125.9 million in 1998 (see table, next page). Last year, WestJet earned a pre-tax profit of C$12.4 million ($8.4 million), up 37% over 1997. It has prospered using a recipe of low fares and basic, reliable service that is produced and delivered by a work force consisting largely of employee-owners.

WestJet's success is a testament to the business smarts of the privately owned airline's founding shareholders: Chairman Clive Beddoe, VP-Customer Service Donald Bell, VP-Operations Tim Morgan and Director-Strategic Planning Mark Hill who is credited with writing the original business plan.

These four also get gold stars for enlisting the services of Morris Air alumnus David Neeleman, who brought real-world start-up airline experience to the team. …

Log in to your account to read this article – and millions more.