Case Study: Blue Sky and Storm Clouds

This case study explores the analysis of external market and technological trends that influenced WestJet's business model and expansion strategies. It also discusses the adoption of RNP technology for flight safety and operational efficiency.

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Running Head: MARKETING IN TOURISM
Case Study: Blue Sky and Storm Clouds

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Table of Contents
Question 1..................................................................................................................................3
Question 2..................................................................................................................................3
Question 3..................................................................................................................................4
References..................................................................................................................................5

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Question 1
On the analysis of external market, WestJet, realised that there was a big opportunity for the
company in expanding its operations in the untapped market where it could introduce new
product, establish network and channel its investments to continue the growth which slowed
down due to the market saturation (WestJet Mini Case, n.d.). The analysis reflected that due
to the stiff competition in the airline industry, there was a need for the company to modify its
existing model.
The company got influenced by one of its biggest competitors, Air Canada, which relied on
the high fuel efficiency of its dream liner. As a result, the company changed its business
model by adding economy seats at a premium rate, initiating a short-haul route, and
commencing flying routes to European destinations including London. In addition to this, to
deal with the competition presented by Air Canada, the company also revealed its plan for
ultra-low-cost flights.
The changing technological trends also helped the company by providing them with an
opportunity in the field of artificial intelligence (AI). Application of AI could help the
company in boosting its revenues and reducing its costs. Therefore, the company made a
considerable investment in the development of such technologies. Another technological
opportunity available with the company was in terms of servicing its customers.
Various existing airlines had come up with the ideas of chatbots, adoption of this programme
could prove to be beneficial for the company in handling common queries of passengers.
Moreover, if the development of AI technology was successful, the company could improve
airline automation and ensure better facial recognition for verifying boarding status and
baggage (Marowits, 2018).
Question 2
The prominent macroenvironmental force which prompted WestJet to introduce Encore was
the market saturation. The company was on the verge of saturation when it planned on
introducing Encore, the available solutions with the company were either to slow down its
expansion process or serve those routes which have less traffic by adding smaller aircraft.
Other factors that prompted the introduction of WestJet Encore were competition and an
opportunity to expand its operations in new markets.
The company was also at a disadvantage in terms of aircraft when compared to Air Canada.
The company usually avoided those markets or had a single routine flight where Air Canada
was serving with smaller aircraft. In this regard, the company had the opportunity to enhance

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its schedule to the existing destinations that it was serving along with additional new
destinations.
Moreover, the company also had an opportunity to liberate passengers from high airfares and
enhance their connectivity across different cities as it planned on introducing low-cost airline
(Sumers, 2015; WestJet, 2013). The company achieved so by procuring the smaller aircraft
with better fuel economy and at a lower acquisition price (Deveau, 2012). As the company,
on a single route had more flights in comparison to its competitors, it also enjoyed a
competitive advantage.
Question 3
The awareness of the technological trends which was available to the airline space served as
the primary reason for the adoption of RNP technology. Apart from that, the purpose of
using RNP technology was ensuring flight safety and getting away with the non-precision
approaches of ‘dive and drive’. RNP is a form of area navigation that makes use of GPS with
distance measuring equipment (DME) navigation and allows aircraft to fly on the
predetermined routes loaded in their computers.
In order to reduce the cost for the ILS equipment which is ground-based equipment, WestJet
intended to use RNP to challenge the ways in which instrument approaches were carried out
and designed, mainly in terms of hazardous terrain (Marasa, 2010). The RNP focused on the
development of more precision approaches and bringing better operational capability. The
company used RNP technology as a measure to reduce the operational costs without making
any compromises with guest experiences.
Application of RNP would help the company in designing transitions to different airports that
had the capability of saving track miles and minimising fuel burn. However, after the
implementation, the company got additional benefits of this approach in the form of better
on-time performance, greater aircraft utilisation, and reduced log times (Ramsey, 2007).

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References
Deveau, S. (2012). WestJet chooses Bombardier Q400 for regional fleet as earnings soar.
Retrieved March 29, 2019, from https://business.financialpost.com/investing/westjet-
choses-bombardier-for-regional-fleet-as-earnings-soar
Marasa, J. (2010). RNP is revolutionizing the instrument approach. Retrieved March 29,
2019, from
http://www.navcanada.ca/EN/media/Publications/In%20the%20News/Rounding-The-
Corners-EN.pdf
Marowits, R. (2018). Artificial intelligence promises bright future for airlines and passengers.
Retrieved March 29, 2019, from https://www.ctvnews.ca/sci-tech/artificial-
intelligence-promises-bright-future-for-airlines-and-passengers-1.3907375
Ramsey, J. W. (2007). Cover Story: RNP on Approach. Retrieved March 29, 2019, from
https://www.aviationtoday.com/2007/08/01/cover-story-rnp-on-approach/
Sumers, B. (2015). WestJet Airlines Looks To Expand Into Long-Haul. Retrieved March 29,
2019, from https://aviationweek.com/commercial-aviation/westjet-airlines-looks-
expand-long-haul
WestJet Mini Case. (N.d.). Blue Sky and Storm Clouds. Retrieved March 29, 2019, from
http://www.pearsoncanada.ca/media/highered-showcase/westjet_casechallenge/
westjet-case_studies.pdf
WestJet. (2013). Expanding our success. Retrieved March 29, 2019, from
http://www.annualreports.com/HostedData/AnnualReportArchive/W/TSX_WJA_201
3.pdf