Unbundling Airline Services: A Look at WestJet's New Booking Fees

I recently watched an interesting documentary by CBC News about how Canadian airlines are continuing to unbundle basic airline packages, allowing customers to choose à la carte which benefits they want to include in their flights. Traditional packages often include services such as checked bags, priority seating, and hot meal service. However, one new feature implemented by WestJet caught my attention.

According to WestJet’s website:

“When making new bookings by phone, some fare bundles will be subject to a service fee. UltraBasic bookings will be $35-42.30 CAD per booking, while Econo/EconoFlex bookings will be $25-29.25 CAD per booking.”

This means that customers who call the contact center to book their flights are now responsible for paying a booking fee ranging from $25 to $42.30 CAD, depending on their seat selection.

As an avid traveler, my initial reaction was one of slight annoyance. Airlines are increasingly willing to charge extra fees for services not directly related to flying. However, upon further reflection, and considering the points made in the video, I can see the rationale behind this fee. The largest expense for contact centers is labor, particularly in the aviation industry, which is subject to significant seasonality, dynamic pricing, promotional offers, and regulations. Managing labor costs efficiently in such an environment is challenging.

In my opinion, WestJet's fee is not merely a revenue-generating tactic but a strategy to control the volume of transactions handled by its contact centers, thereby managing labor costs. While some savings might be passed on to consumers, it’s likely that the airline will retain a portion of the savings.

If I were in WestJet’s position, I would introduce more nuance to this policy, particularly concerning customers with accessibility needs or those without access to high-speed internet, who rely on contact centers for booking. These customers already face significant challenges when flying and should not be burdened with additional financial costs.

Overall, I think WestJet's decision to add a booking fee for contact center transactions is reasonable, especially in an industry marked by revenue volatility and significant variable and fixed expenses like jet fuel or labor. The company needs to control its costs as much as possible and create more steady, incremental revenue streams that are not heavily dependent on seasonality and promotional offers. With that being said, its policy needs to be more nuanced to consider customers who have accessibility needs or live in non-high speed internet areas.