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Old Oct 25, 2019, 11:49 pm
  #31  
 
Join Date: Mar 2010
Location: Calgary
Posts: 1,444
Originally Posted by Fiordland
I believe a mathematician would call this game theory. Where the price you pay is determined by the price others are willing to pay as you try to charge more as the market becomes more scarce. I would still argue WestJet is playing a game with its customer as it tries to charge the most it can.

Where I think WestJet (and especially their Swoop banner) cross the line is by playing where they stand people of days and try to follow the rules with no regard for common sense. That is what the press is all over them for.

I this little add they airline that has cows as passengers has the better dressed staff that are indifferent to the cow customers and walk away when they should be serving their customer. While at the same time they try to show WestJet as the welcoming and caring airline. Historically that was the case.

For the record I do around 30-40 round trips a year. One or two to Europe a year the rest being an even split between Canada and US. In my view, Alaska is great, Delta second followed by WestJet and AC tied. I have seen WestJet become less accommodating and slipping behind AC. But as a business traveler perhaps I am not their target market. I sometimes end up in Basic not by choice, but because someone else does the booking and it is not that obvious what fare code your going into on some of the online travel agency sites. The not over booking strategy is a positive.
Ftom an OR perspective applied to pricing, there is no one modelling method used for ticket price simulation, Game Theory is most applicable to modelling price changes due to interaction with competitors, but Monte Carlo modelling is a better predictor of passenger buying behaviour, but initial starting parameters are based on historic ticket pricing for specific flight numbers on specific days with an adjustment for day-of-the-week relative to holiday dates and other dates that affect pricing. Normally there would be about 100 million historic ticket prices used to build the baseline prices by route and day.

Good travel agents will check and understand the products they are selling (WestJet is currently using about 15 different fare buckets), the products sold directly on the website have clear terms and conditions shown in the booking flow. Providing flexibility in an inflexible ticket is unfair to those who paid for the extra features and has an effect of setting false expectations and devalues the flexible fares. The main thing that WestJet has done over the past few years is to enforce their ticket rules to put predictability into the processes, people may see this as being rigid, but they won’t sustain OTP and return to reasonable profitability in an increasingly complex operating model, without doing so.

Although WS doesn’t overbook at the moment, if they do increase their business customer percentage close to that of legacy airlines (probably not for 5 years or so), it is unlikely they can meet the needs of many business travellers without bumping and overbooking in some circumstances.
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