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Air Canada versus WestJet

This paper introduces two main airlines that allow people to fly in Canada. Air Canada was created 74 years ago while WestJet is only in its 14th year of business. WestJet is not only expanding, but also is very popular with the Canadian public. The histories, financial situations, and market positions of two resulting companies, Air Canada, and WestJet, are drastically different, with WestJet rapidly gaining popularity in Canada at Air Canada’s expense. Although they both have similar routes and prices, Air Canada and WestJet are actually quite different.

Thus, this paper presents and discusses two major Canada’s largest airlines, such as Air Canada and WestJet, and examines its history and principal concepts.

To start with, Air Canada is Canada’s largest airline, one of the founding members of “Star Alliance.” Its main office is headquartered in Montreal.

“Air Canada is Canada’s largest full-service airline and the largest provider of scheduled passenger services in the Canadian market, the Canada-U.S. transborder market and in the international market to and from Canada” (The Star Alliance Network, par. 1).

The company was founded in 1937 as Trans-Canada Airlines (TCA) and was called so until 1964. In 1949, the company moved from Winnipeg (Manitoba) to Montreal, where it is located nowadays. In 1984, Air Canada introduced a program that was called Aeroplan in order to promote the company’s clients.

Aeroplan is a special program that allows passengers to earn miles and subsequently use them for free tickets, upgrades or other benefits. In 1989, the airline was privatized. In 1997, it founded Star Alliance along with several airlines. In 2000, the company took possession of the second largest air carrier in Canada – Canadian Airlines and became the 12th largest airline fleet in the world.

Air Canada serves flights within 98 points of Canada, the USA, Latin America, Europe, Australia and Asia. In partnership with Air Canada Jazz, it carries out flights to 171 destinations. In addition, Air Canada offers passengers three classes of service: economy class, executive class and executive first class.

Examining WestJet, it is possible to say that WestJet Airlines Ltd., acting as WestJet, is a low cost airline of Canada, the second largest (after Air Canada) air carrier of the country. WestJet operates in the market for regular and charter passenger services, performing more than 380 daily flights to airports in Mexico, the Caribbean, Canada, and the United States.

Airline’s air fleet consists of aircrafts that are named Boeing 737 Next Generation. The main transit hubs of WestJet are Calgary International Airport (Alberta) and Toronto Pearson International Airport (Ontario).
WestJet is a public company with a staff of more than 8,000 employees. “WestJet has held the number one position on Canada’s 10 Most Admired Corporate Cultures for the three years since the inception of the awards, testament to the company’s singular focus on culture” (CNW Group, par. 2).

WestJet Airlines was founded by the group of people: David Neeleman, Clive Beddoe, Mark Hill, Donald Bell and Tim Morgan in 1996. Initially, the carrier’s route map was based only on the destinations of western Canada.

WestJet had completed its first scheduled flight by Boeing 737-200 on February 29, 1996. Three liners of this type served passenger traffics between airports in Calgary, Edmonton, Kelowna, Vancouver and Winnipeg during the year. By the end of 1996, the airline’s route map has expanded to airports of Regina, Saskatoon and Victoria, and the staff grew to 225 people.

In 1999, Clive Beddoe resigned as a general director of WestJet Airlines. Steve Smith, the former chief executive of Air Ontario had been invited to hold this position. In July the same year, the company has led a process of its public offerings of stock by placing 2.5 million treasury shares at the opening price of 10 dollars apiece. In late 1999, the carrier’s route map included the cities of Prince George, Thunder Bay, and Grande Prairie.

WestJet’s CEO Steve Smith resigned in 2000. After Steve Smith’s dismissal, Clive Beddoe again held a position of WestJet’s CEO until July 2007.

In 2000, WestJet Airlines has opened regular flights to the east, forming the hub of transportation in the Hamilton International Airport and running routes in Ottawa (Ontario) and Moncton (New Brunswick).
In 2001, Fort McMurray and Comox entered WestJet’s route map. In April 2003, it added to its own route map the cities, such as Gander, Windsor, Halifax, Montreal, etc.

It is not superfluous to mention that Air Canada filed a lawsuit against WestJet Airlines in Ontario Superior Court. The plaintiff accused WestJet of industrial espionage and, in particular, accused of illegal access via a private website to obtain some confidential information for its private needs.

Both airlines issued a joint press release on the settlement agreement on May 29, 2006, under which WestJet has paid 5.5 million dollars to Air Canada.

In 2006, the airline opened its first scheduled flight outside Canada and the USA (Vancouver-Nassau, Bahamas). Sean Durfy replaced the position of one of WestJet’s founders Clive Beddoe in September 2006.
20 September the same year, the company declared its quarterly earnings, which amounted to 52.8 million dollars.

Drawing a parallel between WestJet and Air Canada, it can be said that WestJet Airlines made significant and huge strides in domestic market share, despite its major competitor “Air Canada.” In 2000, the proportion of WestJet and Air Canada in the whole volume of domestic market share accounted for 7 percent and 77 percent, respectively, by the end of 2009 these figures have already changed: 38 percent (WestJet) and 55 percent (Air Canada). At present, WestJet Airlines carries out scheduled flights to 71 destinations in 13 different countries of North America, including 31 Canadian airports and 17 United States airports.

Comparing Air Canada and WestJet, it is possible to emphasis that Air Canada’s credit is not transferable, whereas the credit with WestJet can be shared with someone else. Air Canada’s credit is available only for one year and a person can use it during this period of time. A person should book or buy a ticket during one year with WestJet, but he/she should not fly within this year. Like Air Canada that has various promotional programs (for example, aeroplan), WestJet also has different initiatives and loyalty programs (for example, code-sharing). They both offer a wide range of menus from snacks, sandwiches, alcoholic and soft drinks during flights.

To sum up the above-mentioned information, it is possible to conclude that although Air Canada and WestJet have a lot of things in common they are actually very different in their approaches and business operations. There is no doubt that they both are the most well-known and popular airlines with the Canadian people. Despite the fact that WestJet is only in its 14th year of business compared with Air Canada, it was able to achieve great results in the field of air transportation.
Works cited:

CNW Group. “WestJet Tops List of Canada’s 10 Most Admired Corporate Cultures.” Newswire.ca 16 January 2008. 28 May 2011 <http://www.newswire.ca/en/releases/archive/January2008/16/c8728.html>.
The Star Alliance Network. “Air Canada.” Staralliance.com n.d. 28 May 2011 <http://www.staralliance.com/en/about/airlines/air-canada/>.