WestJet plays coy on first bag fees

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Any North American carrier that does not levy a fee on first checked bags inevitably fields questions from investors about the possibility of drumming up revenue by introducing a charge. Recently Canadaʼs WestJet was put in the hot seat, and dodged the questions by claiming technological hurdles preclude the carrier from making a firm decision to introduce the still-unpopular fees.

Questions were posed to WestJetʼs executives in the context of levers the carrier could pull to withstand the weakening of Canadaʼs dollar against the US dollar. Some Canadian airlines have introduced currency surcharges, but WestJet has opted to raise fares, concluding it is committed to transparency in its advertised price.

However, the carrierʼs top brass believes it can leverage ancillary revenues to offset some currency weakness. WestJet CEO Gregg Saretsky remarked change fees and pre-reserved seating fees could be increased as a means to combat unfavourable foreign exchange rates.

And its plans to pull the lever on a first checked bag? Saretsky explained the a pacing item in WestJetʼs decision making is technological readiness. “We have been in conversation with Sabre for months, waiting for them to provide us with an estimate of the work that needs to be done on all of the systems that hook up to Sabre that our guest would use to pay such fees, our kiosks for example at the airport” Saretsky explained.

WestJet uses the Sabre reservations platform, but in Irish firm Datalex supplies technology supporting its internet booking engine. Queried about the discussions with WestJet Sabre stated it values its relationship with the carrier, and explained it would be inappropriate to publicly comment on a “project we are working on with them.”

As WestJet firmly entrenches itself in the hybrid business model, it needs technology that exempts certain passengers from first bag fees. “So in our case we want to exempt, if we go down this path, people that are in our top tier of our frequent flyer program or people that maybe hold our credit card or people that would have bought a plus fare,” Saretsky explained. “The technology today doesnʼt allow us to exempt anybody.”

Until WestJet has the technological capability to consider a first bag fee, it can politely sidestep making a definitive statement on first bag fees. “There is a lot of infrastructure on the technology side that needs to come together,” Saretsky remarked. “so we donʼt have a date for when that will be available for us to make an informed decision on whether or not we want to pull the trigger on first bag fees.”

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