WestJet developing own loyalty program
 

http://www.globeinvestor.com/servlet...b0213/GIStory/

Key points:

• New program is on track to launch in 2009
• WS to ditch Air Miles
• WS to terminate current relationship with Mosaik MasterCard (but might relaunch another BMO card)
• "Borrowing a page from Shoppers' [Drug Mart] playbook, Mr. Durfy said WestJet envisages stimulating travel demand by issuing bonus points to passengers who fly on slower days, notably Tuesdays, Thursdays and Saturdays."

Interesting. I wonder if they'll contract Aeroplan to manage it ;)

I wonder about the costs of reinventing the wheel as I can't imagine it'll come cheap to launch and then build a competing brand to Air Miles. I am, of course, just a layman and not a loyalty program expert...

This scares me. The reservation system thing was a huge failure. I'm a fan of sticking with what you know.

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Airmiles does NOT get me to fly Westjet.....it does not provide a sufficient reward to make any difference. There are of course other reasons to chose WS but Airmiles is not one of them.

Please don't name the program "Passenger Perks" :D

Indeed, though it is nice to get them anyway from Westjet. I can earn the measly 20 Air Miles by buying 20 bottles of Pepsi from the drugstore - $30 versus the $280 for Westjet.

I guess when they firm up a date will be when I decide to cancel my Mosaik card. Might have to advance plans to burn through my air miles flying the family to Florida on WS.

How many AM's do you earn on WS anyway? I got 100 AM's from Northwest when we flew YXU-DTW-FLL last month. I put my AM number on my wife's Worldperks account and got the 25 each way for both of us.

I would guess that leaving Air Miles would be motivated both by the costs and the benefits (or lack thereof) arising from the current deal. Since it seems everyone and their dog as a reward program of one sort or another, the marginal cost per sale has to be worth it. Air Miles is great for getting instant merchandise rewards but booking travel with them is a real pain.

Well, Westjet did go back to tweaking their existing reservation system for now but it still needs replacing to move forward with their stated strategies. Sticking with what you know is fine until you know that what you know won't cut it for much longer. These sort of integrated information systems have an extraordinarily high failure rate from both functional and performance perspectives across multiple industries. One of the IT magazines I get made a reference to somewhere around 30% or more missing the mark outright and an even higher percentage taking longer and costing much more than budgeted. Wait until AC tries to roll-out their new system - if and when it is ready.

It seems that Air Miles is still a long way from on-line travel bookings, so maybe an independent program is the only way Westjet sees this irritant being removed.

And that's all well and good as I was just wondering aloud at how much this venture would wind up costing and whether it would in reality give WS that much of an advantage relative to the money spent. Sure it would get much more control over promo's and T&C but it won't be cheap to essentially recreate what's already in existence. The unknown is what resistance there would be from avid AM's collectors not wanting to see further dilution of programs should WS adopt it's own. It's MHO that there already too many loyalty programs and there may be some natural reluctance for people to switch should it come to that.

As I've always maintained, this will be a costly exercise for WS and could knock $5-$10 million earnings per quarter for the first year, and build up a redemption liability that will have to be carried on the books. Of course, WS has little option now that they require links to the international carriers for feeder customers, and must provide regular business travelers with some form of perk to stay competitive. A look at both JetBlue and SouthWest will reveal what a basic FF program might be for WS, but both are pretty meagre compared to AE and others in terms of hard benefits. (I wonder how the WS lounge program is doing financially, and if WS has had to subsidize the company operating these lounges?)

It would be great, as I have posted elsewhere in the past, to see a program like Alaska that covers BOTH alliances outside *A. How about piggy back the the AS program with seperate branding WS members.

But I should hope that WS would create a frequent flyer program and not a shopping program like Aeroplan has become. There are many shopping programs in Canada but not many, or arguably any frequent flyer programs :p
I would not be worried what AM collectors think too much, its frequent flyers that count.

And what would be the chances of WS going with a true FFP and not a "loyalty" program? 1 in 10? If, as outlined in OP, Durfy is stealing a page from Shoppers it sure won't be a true FFP but yet another broadly based "lotalty" program. I also think you grossly underestimate the impact of AM but then again perhaps I'm guilty of wildy overestimating it's clout as well. Time will tell...

WS may be greedy when it looks at how “profitable” Aeroplan has become and wants to replicate it.

My guess is that the WS programme will likely be something similar to the Bay’s Rewards, or Diners Club with a link to Air Miles. WS programme holders will earn points by flying WS and may redeem flights on WS or convert to Air Miles to redeem other rewards.

I have found today’s Air Miles to be far less attractive than 3~4 years ago. I have experienced increasing difficulties in booking non-air travel rewards, e.g., hotel and the car rental rewards are simply extremely poor value. I have not tried to book air reward through Air Miles recently but from what I’ve heard second hand from friends and colleagues, it is not easy especially if you’re looking for the special BMO WS Mosaik MC deal. I think the “must stay one Saturday night” restriction is still there.

Correct indeed. This is a cut & paste from the travel reward T&C:

All Rewards offered are subject to the Terms and Conditions of the Program, are subject to change and may be withdrawn without notice. Some restrictions apply.
Collectors must pay taxes, fuel surcharges and other applicable charges and fees on air travel.
Air travel is subject to a minimum 7-day advance booking*, Saturday night stay requirement and availability from participating airlines.
Tickets are for round trip travel only. All travel must originate from Canada or the United States.
Number of reward miles required to be redeemed is subject to verification at time of booking.
Required number of reward miles for entire travel is determined by the outbound departure date.
Required number of reward miles for air travel may be higher if itinerary involves multiple carriers or if involving Non-Partner airline(s)**.
Flight Suppliers may limit length of stay and impose minimum stay.
$20 + GST booking fee will apply on all redemption tickets. Handling fees may also apply.
No cancellations, exchanges or refunds on tickets once booked.
See current Program terms and conditions for complete details.
Insurance is highly recommended and may be purchased from us to ensure the return of unused reward miles to your account. For complete details, please ask our travel agents at time of booking.
* Flights must be booked no later than 6 p.m. Eastern time on the 7th day prior to departure. $20 plus GST handling fee may apply.

** Non-Partner airline carriers are other suppliers of seats which are usually not associated with the AIR MILES® Reward Program.

How they accomplish this with airline who don't have a Sat. night stay anymore, like AC & WS, I'm not sure of.