“Illusion” is not the correct term. Separate business model to serve a different market with a different product is what the business plan is all about, at a cost point that mainline WestJet can’t achieve. If you haven’t read the investor pitch on this, you won’t understand (see slide 52 to 65 for Swoop business strategy here: https://www.westjet.com/assets/wj-we...vestor-day.pdf).

Qantas does this well with Jetstar, 72 mentions of Jetstar in the 2018 Qantas annual report https://investor.qantas.com/FormBuil...Report-ASX.pdf

All the Lexus performance is fully embedded in the Toyota annual report and financials: https://global.toyota/en/filedownload/27776814

With BMW for it’s wholly owned subsidiary brands, the same as with Qantas/Jetstar, WestJet/Swoop, Toyota/Lexus, too: https://www.bmwgroup.com/content/dam...315_ONLINE.pdf

From an investor perspective it has been discussed by Ed and Gregg and Bob and Steven many times what the Swoop strategy is, no secret at all. This is all quite different from branding strategy. In Canada ULCC practices are new and a novelty, elsewhere in the world the press has generally lost interest in ULCC “news” unless it is really bad and moved on to other things that they can sell.

Swoop is very important to WestJet to provide a product profitably to the ULCC market that WestJet mainline can’t come close to achieving, without Swoop they have to abandon that market. Swoop’s inflexibility, strict policy enforcement and cheap IROP handling that only just meets legal obligations, is necessary to hit the 60% CASM of mainline. No drag on the WestJet brand that Swoop seems to have caused, based on questions asked and answered in the quarterly investor calls earlier this year, one reason to keep the product offerings and brand separate.

Swoop is expected to have ULCC inflexibility, this is built into the business model if you have viewed the publicly available investor presentations. This will create expected negative publicity, as with any true ULCC. If you look at customer complaints on sites such as Trip Advisor, Swoop is far from the bottom of ULCC ratings, most are in the 2.0 to 3.0 average rating there, Swoop is 3.0 with a typical “bathtub” rating that sees predominantly high and low ratings with less average ones. Flair, Spirit and Frontier are at the lower end, Ryanair, Swoop and Jetstar at the higher end, for ULCCs.

The brand value in airlines these days is mostly aligned with financial performance as most products offered from basic tickets to most business class is a commodity with no differentiation on the majority of tickets. Many airlines and other well know companies have thought their brand overcomes an inflexible business model in the past, before they get into financial trouble and go out of business. Keeping a strong brand is important, but it isn’t just built on reputation. The two brands I liked a lot that fell into this pit were Wardair and Woodwards.

If you look at the brand value of Ryanair, it is about the same as WestJet at about €1.5bn on revenues of €7bn in 2018 (https://www.irishtimes.com/business/...ands-1.3063395), for 21% of revenue in brand value. Westjet brand at $1bn on $4.7bn revenue is also 21% revenue in brand value. American Airlines has the highest brand value of airlines worldwide, and the overall ranking is quite aligned with the order of revenue: https://www.forbes.com/sites/jennyso.../#2e123b3040ee

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The funny thing about Southwest’s free bags is that originally when other US airlines started charging for bags, Southwest couldn’t due to the inflexibility of their 1970’s PSS system called Cowboy, which they only managed to replace with Amadeus Altea in 2017. The system was a stripped version of the original American Airlines Sabre system that required a significant portion of their large IT dept to support and machine coders to make changes. The inflexibility of this system was also a major if not the major reason that the Southwest-WestJet codeshare agreement was abandoned in 2010 after the issues of Cowboy integration became apparent.

So “2 bags fly for free” was really all they could do until Altea as a modern PSS system was implemented.

WestJet I’m sure will try hard to keep customer care as good as possible, but not at the expense of being profitable and using Swoop as a defensive brand to meet specific market needs. Air Canada under Calin has also put more of a focus on customer service, at the moment I fly most weeks per month with them and every other month with WestJet. The biggest differentiator I see and monitor at the moment is that WestJet has OTP under much better control, but service wise they are both decent compared with many airlines. There are lots of ex-WestJet people I meet on my commute that now work for Air Canada and vice-versa, so the fundamentals of how each operates isn’t a mystery between each company.