The story behind the success of WestJet

Often hailed as a Canadian success story, WestJet is a company that started small and has made it big. It entered a market dominated by well-established companies like Air Canada and has managed to make quite the name for itself.

Sean Durfy, WestJet’s president, recently broadcasted part of the company’s success story over the internet. “There would be a little old lady coming up and she’d have a table and she’d have a chair and she’d have six or seven bags and we’d say ‘Yeah, take it on the plane. No problem’,” he said.

“Now we’re actually going to charge a little bit of money for taking that table and chair and those extra bags on board. And that incremental revenue that we extract from that little old lady is very, very profitable to us. Some 85% goes to the bottom line.”

The bottom line is earning the company more than $21.7 million per financial quarter. And that’s only profits from the sale of things like extra bags, or what the company calls ‘ancillary revenues.’

Ancillary revenues are the money the airline makes from the sale of things other than the air fare itself. Travelers familiar with no-frill flying know what this means: food, water, in-flight entertainment and, like the old lady, extra bags.

While many may hate the small hidden fees, the fact is they have made possible an independent low-cost carrier in the Canadian market. With WestJet’s expansion, in the American, market too.

www.westjet.com