Hypnotize

What is a reasonable profit margin for an airline?

Hypnotize

I should ask its a question of opinion. I knows what the profitable airlines ate making. Just curious what is reasonable in a customers mind?

JasonYYC

Personally, I don't feel cramped on the 737-700 models so this decision won't bother me too much. Although, losing 2 inches might bother those who already feel cramped on WestJet's Hawaii routes especially.

HangTen

If you were to start a transportation business where you had almost no control over revenues, but the costs didn't change much no matter how many people you transport, and the government taxed every level of the business as if it were a carton of cigarettes, and each vehicle/boat/aircraft cost close to at least $40 million and you needed at least 25 to get any sort of market penetration, would you take that sort of risk to make 5%?

I wouldn't!!!

YYCguy

If these folks are already feeling cramped on the Vancouver-Hawaii -800 series service at 34 inches, then they will be pleased with the premium economy product, or perhaps need to consider another airline with business/first class sections, which they will probably pay much more for. I think 34 inches has been quite the anomaly and quite luxurious in the economy seating market.

Duckman

they are dreaming if they think people will pay that much.

tcook052

Meaning past WS passenger had it better than they deserved and that's now been corrected? Perhaps but that doesn't mean this WS pax is happy to see that oversight rectified. Just MHO, of course.

The Lev

I am always able to book an exit row seat (usually the one with infinite legroom for $30. Makes me wonder what else will be on offer to coax people who won't spend $30 today to supposedly spend far more in the future.

Clearly targeting now-WS passengers while punishing those who have been loyal to the airline with less legroom and the reality of being treated as second class citizens.

Hypnotize

I respect the right for people to have an opinion but some of the thoughts shared in this thread are pretty overly dramatic.

The seat pitch on the -600 and -700 aircraft is currently 32" (31" in some seats). the seat pitch on the -800 aircraft is currently 34". As I understand it there won't be any changes to the -600/-700 aircraft as this change will bring the -800 fleet in line with the -600/-700 fleet.

The addition of premium economy seating gives customers the CHOICE of paying more for the additional legroom - legroom (36") that was never available on any of our aircraft.

If you don't want to pay extra, you get the same type of seating that you've been accustomed to. What's the big deal?

YYC Guy

That just doesn't add up ... it's physically impossible that the seat pitch on the -600s and -700s won't change! There's no other way to fit in this new premium section without squeezing the remaining seats tighter! Where else would all of the premium leg room come from? (They're not making the plane any longer, after all.)

On the 600s and 700s, there will be many more seats with a reduced seat pitch of only 31". That's tight. And that's worse than Westjet customers get now. A definite downgrade for their core, bread-and-butter passengers.

On the 800s, sure we've all been oh so lucky to have all of that legroom up until now (as my namesake lurker from Westjet stated above), but seat pitch on those aircraft is also dropping to 31" or 32" standard. That's worse than Westjet customer get now on those same aircraft. (And if you happen to be sitting in a 31" row, it's going to be noticably worse.) A definite downgrade for their core, bread-and-butter passengers.

Nobody here has raised any issue about Westjet offering a premium product or charging for it.

The issue is that they are taking away space and comfort from their current customers in order to create that new premium product. If I choose not to pay extra, I get less space and comfort than I get today. Period.

Create a new premium product? Great move, Westjet! I hope it works for you.

Create a new premium product, which either will either negatively impact my comfort as a passenger on your planes or will force me to pay extra to avoid that negative impact? Bad move, Westjet! Grrrrrr.

HangTen

There are lots of rows in the 600's and 700's where the pitch is 33" and one or two rows even have a little more. .

Those will all disappear to a standardized pitch.

31 to 32" pitch is pretty standard in North America for economy seating. I don't see what the big deal is. If you need more space, pay for it on WJ or pay WAY more and fly someone else!

When I order a quarter pound burger, that is what I expect to get! Why should some pay the same for their quarter pound burger and get a third of a pound instead?

YYC Guy

For years, one might argue that Westjet has sold their customers that "third of a pound" burger. They sold it to everybody - each and every one of their customers - at a set price. It was a key part of their value proposition to their customers.

Now, they're cutting away at that core product. They're reducing it to only to a "quarter pound burger" (or in some cases, a slightly less than quarter pound burger) -- yet will still charge us all the exact same price for it.

That cuts away from a part of their value proposition. Whether you think their fares up until now have been a great deal or not (for the seat pitch they've previously offered), the bottom line is that they're going to start selling a slightly diminished product yet not changing their price.

The fact that they're going to start making 'half pound' burgers available as an option doesn't change that fact.

And, IMHO, it really doesn't matter if some might think that the 32 to 34 inch seat pitches were an amazingly good deal up until now. Take away product quality from me by taking away comfort (without discounting your price accordingly) and I'm mad. Even if Westjet apparently thinks that the previous quality/seat pitch was just too good to be true (i.e. slightly better than industry standards).

And talking about 'industry standards' -- that sounds like it's straight from the PR pieces that Westjet HQ turned out. When I used to have nice kneespace on their planes, and the seat in front of me will now be touching my knees, do you think I'll sit their happily thinking "Ahhh, this is perfectly in line with industry standards. What a wonderful experience this is." Nope. Will I be thinking, "Gee, what an unbelievably good deal Westjet used to be when they used to have slightly-better-than-industry-standards-seat-pitch at industry-standard-pricing? How lucky it was for me that I was able to enjoy that?" Nope again.

Take away from my leg room and charge me the same, and I'm angry. (Even if I will now have the option to buy a different product for more money.)

As many have said throughout this thread, nobody begrudges Westjet for creating and selling a premium economy product. What we're all @#$ed at is the fact that they're doing so by taking space away from their main product and their main customer base (and yet not taking away from the price of that product). Who cares if I could choose to pay more to avoid it? That's not the point.

It's downright disrepectful of their current, loyal customer base.

aerobod

New aircraft will have thinner seats, but a retrofit won't happen on existing ones while the seats are still serviceable. For example, the Recaro 3510 seats give over 1.5" more knee room at the same seat pitch than the 3410 seats that most of the WestJet fleet has at the moment.

FA requirements change at break points of 120 and 160 in Canada (1:40) and 150 in the US (1:50), so 166, 174 and 189 seats on a 737-800 require the same number of FAs.

Routes and demand are matched to the equipment, so a 737-700 with a higher density seating plan could conceivably replace a low density 737-800 on a given route, giving a higher load factor. Seat densities on 737-700 vary from about 136 to 148 in a single class cabin and from 166 to 189 on an -800. An 80% typical WS load factor on it's 166 seat -800 equates to a 90% load factor on a max seating density -700.

StuMcIlwain

Sorry, I'll have to call you on that one. There are not lots of rows with 33" pitch. If there were, it would be advertised as 33" with a few 32". Instead, we have mostly 32" with a few rows of 33" and a few rows of 31". But the 33" rows cannot make up the 16" required for comfort seating, so we'll end up with lots of 31" and a few 32".

The exit rows will have to keep their additional pitch so they do not block the exits, unless WS is planning to shorten the seat cushions like Zip did, in which case the seats become more uncomfortable. There is also some room at the rear of the cabin, but you'd have to lose the recline on the last row of seats if you want to use that space to reduce the number of 31" pitch rows -- again, more uncomfortable.

The bottom line is WS simply cannot add in the comfort seating and keep the number of seats the same without reducing the pitch/comfort elsewhere.

I'd have no complaint if they had the reduced pitch only on aircraft with thinner seats, like AA is doing. But this is not what's happening.

I see one of the most profitable airlines in the world, one that made a return of more than 10% last quarter, doing this to make even more money while its core passengers suffer. And there is a huge difference to me between 31" and 32" on a 4-hour flight!

(For similar complaints, look at the posts on the AC board from 12 years ago when they reduced the pitch of the first few rows of Y seats on the A320 to 31" so they could fit in more seats.)

aerobod

WestJet 2Q2012 revenue $809M, net earnings $42.5M, net profit margin = 5.3%

A random selection of other companies' 2Q2012 net profit margins:
Apple = 29.6%
Ryanair = 7.7%
Telus = 12.3%
Suncor = 14.2%
Spirit Airlines = 10.0%