WestJet Rewards - WestJet sees opportunity to double ancillary income

http://www.reuters.com/article/2012/02/03/uk-westjet-idUSLNE81201F20120203

Calgary-based WestJet, which reports fourth-quarter financial results on February 8, averaged about C$7.50 per passenger in ancillary revenue in the third quarter, Chief Executive Gregg Saretsky said at a Raymond James airline conference, via webcast.

In the three months ended September 30, 2011, the carrier's ancillary revenue totalled C$31.7 million, a near 40 percent jump over the same period in 2010.

"We think that the opportunity is perhaps two-fold that and where the money comes from is in a whole variety of ways," he said, but did not specify a time frame for that increase.

Just don't charge for the first bag! Please please please find ancillary income somewhere else.

Just don't charge for the first bag! Please please please find ancillary income somewhere else.

Gotta admit that was the first thing that came to mind reading this article.

If they charged for the first bag, then WestJet will no longer have the competitive edge they have over Air Canada.

That's the reason why I book with WestJet 95% of the time, to take advantage of the first bag free.

I always found it ironic how the "low cost" airline offers free bags, while the "legacy" carrier nickels and dimes you.

If they charged for the first bag, then WestJet will no longer have the competitive edge they have over Air Canada.

That's the reason why I book with WestJet 95% of the time, to take advantage of the first bag free.

Perhaps but how much is it worth to WS to lose out on that revenue? And how much of a competative advantage would it be giving up? Obviously that's something WS appears to be mulling over.

I hope the us passes a law forbidding first bag fees so we can return some civility to air travel.

Charging for the first bag could add $150+ million annually. That's not exactly chump change.

Charging for the first bag could add $150+ million annually. That's not exactly chump change.

No, but it's bloody annoying! Especially without a real frequent flier programme so you can avoid the fees.

Charging for the first bag could add $150+ million annually. That's not exactly chump change.

And bear in mind that even a token $10 bag fee would make a big difference to WestJet's bottom line, and not alienate customers that much (I expect).

Is money WestJet earns through the RBC WestJet MasterCards considered ancillary revenue?

Is money WestJet earns through the RBC WestJet MasterCards considered ancillary revenue?

No, I wouldn't think so though I'm no accountant.

The money earned from credit card affiliation is considered ancillary revenue along with all other Rewards/Frequent Guest/Passenger Perks revenue.

Charging for the first bag could add $150+ million annually. That's not exactly chump change.

The top two ancillary revenue generators could be bag fees and seat selection fees.

If WS could get 30-40% of guests to buy seat selection (either through fare bundling like tango plus, elite free seat selection, or other incentives) this would easily add 80-100 million in revenue. Plus WS would hit the inflection point on seat selection and force most flyers to purchase seat selection. AC gets 3-5 times the number of pax purchasing seat selection than WS and this is a big reason why AC is the leader in ancillary revenue.

Fare bundling a la Tango/Latitude will be here shortly. Huge investment on the technology side in 2012 means you'll see significant changes this year. ^

Fare bundling a la Tango/Latitude will be here shortly. Huge investment on the technology side in 2012 means you'll see significant changes this year. ^

Like being able to book an OJ or multi-city online?

Huge investments have been made by WS on the technology side in the recent past with very little IMHO to show for it.

Fare bundling a la Tango/Latitude will be here shortly. Huge investment on the technology side in 2012 means you'll see significant changes this year. ^
That's probably not good news. More charges for things that cost the airline nothing and used to be complimentary?

I'd much rather they invest in speeding up the website, or returning the phone centre wait times back to what they were before they switched systems.

Huge investments have been made by WS on the technology side in the recent past with very little IMHO to show for it.
Most of the major investments have been made in re-engineering backend systems and processes to this point, the aim being to embrace as many industry standards as possible for easy interoperability with other airlines. This year is the break-out year for front end system capabilities. Offering the same flexibility that legacy airlines can, on the budget of an LCC is the goal. To do this, you can't start at the guest-facing systems and work inwards, you have to start at the core and wiork outwards. Some of the remaining back-end limitations will be eradicated with the indusrty wide adoption of EMD over the next 18 months or so.

Some of the remaining back-end limitations will be eradicated with the indusrty wide adoption of EMD over the next 18 months or so.

What is EMD? Sorry, I'm only a front line worker and don't know all the terms.

What is EMD? Sorry, I'm only a front line worker and don't know all the terms.
Electronic Miscellaneous Document - an industry standard method of attaching a separate electronic coupon to the electronic flight coupons to enable a transferable item such as an ancillary sale to be associated with the flight segments, no matter what changes are made.

Please just give us the iPhone app already!

Please just give us the iPhone app already!

Its coming soon! Second upgrade to the App will be in the fall.