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One on One with Clive Beddoe, CEO WestJet

We were not making any money on the routes, and unlike our competitors we’re not prepared to put up with that.


October 2, 2007
By Darren Locke

Topics

147WHEN YOU LOOK AT THE COMPANY YOU’VE HELPED TO BUILD, WHAT WOULD YOU
IDENTIFY AS THE KEY ASPECTS OF WESTJET’S SUCCESS?

There’s
no doubt that it’s aligning the interests of the employees with that of
the company, and the interests of the company with that of the
employees. It’s very much a partnership between our people, and
ourselves and that’s what inspires them to put that extra effort in and
do those things that are necessary to make us successful.

It’s
very easy to say that your employees are part of your organization and
are important assets – most organizations say that. But they create
this huge wealth for their shareholders, and employees never really get
a chance to participate in it. In our case, we’ve made sure that they
do.

Those are the things that lead to creating a low cost
structure and a highly efficient airline. That low cost structure, of
course, allows us to stimulate the market with low fares.

WESTJET
HAS HAD TO MAKE SOME TOUGH DECISIONS AS WELL, SUCH AS ELIMINATING
SERVICE TO SUDBURY AND SAULT STE. MARIE. WHY THESE PARTICULAR ROUTES?

We
were not making any money on the routes, and unlike our competitors
we’re not prepared to put up with that.We usually give it about a year,
but we’ve made it very clear that we’re not prepared to stay in markets
unless we’re able to be profitable.

It’s [also] up to the
community as to how much it supports us.We have an adage in our company
that says, “use us or lose us”. Air Canada usually matches our fares
when we go into a community, and if that community then decides to fly
Air Canada at our fares, then we’ll retire. The question after we have
left is, will the fares in those markets go back up?

We did this
once before in Fort McMurray and Winnipeg. Many years ago we pulled
out, and we went back again later. After the fares had reestablished
themselves people realized that they needed to support WestJet to keep
us.

IF YOU HAVE ONLY HAD TO MAKE SIMILAR CUTS TWICE BEFORE IN
APPROXIMATELY SEVEN YEARS OF OPERATIONS, WHAT DOES THIS SAY ABOUT THE
IMPACT OF FEES AND EXTRA COSTS IMPOSED ON AIRLINES?

There’s no
question the federal government has got to do something. They are
destimulating the marketplace and making it ridiculously expensive for
people to travel. Travel is a very important part of our economy. If
traveling is detracted, then the economy will suffer.