How To Create Westjet Rewards Account

Earlier this April, WestJet and Delta have enhanced their reciprocal frequent flyer agreement to include reward redemptions on each other's flights. This enabled WestJet to leverage Delta's expansive global network and allow WestJet Rewards members to fly to destinations they couldn't otherwise to with WestJet's limited reach beyond continental North America; and to facilitate such redemptions on partner flights, WestJet came up with what they call "Member Exclusive Fares" or MEFs as I will call them this point on in this article. MEFs are different from the regular type of WestJet Dollar (WJD) redemptions in that the entire base fare while booking an MEF must be paid in WJDs. Just last month, WestJet announced a new reciprocal frequent flyer agreement with Air France- KLM, further enhancing the number of destinations members can travel to with MEFs. There are over 50 such destinations now and WestJet even launched this cool commercial to let the world know about the new possibilities for WestJet Rewards members:

What the airline has not spoken of is that WestJet quietly extended the MEFs to its own network in a traditional saver miles redemption fashion, offering surreal value on WJD redemptions. The MEFs on WestJet's network are more prevalent on the airline's domestic flights, offering a return of close to $4 on each WJD redeemed as illustrated in my previous post (Better yet, the WJD requirement for the routes has now been dropped to $125 from $160 making each WJD worth $4.95 in case of the YYZ-YVR example in that post). The value proposition here is absolutely ASTONISHING! It seemed like WestJet hit it out of the park with this new update to its rewards program. But then, it did not take me long to realize that such isn't case and in reality, WestJet shot in its own foot!

Why do I say so, you ask? You see, the problem does not lie in the value proposition of MEFs. Rather, it lies in the fact that one can now purchase WJDs at a cost of $1.09 - $1.33 per WJD depending on where you live and how many WJDs you purchase in one transaction. You may wonder why I would complain about an abundant supply of WJDs to take advantage of MEFs on WestJet's network instead of cherishing the possibilities. But the thing is, this model will just not work for WestJet in the long run and weak competition in the Canadian airspace is much scarier than the idea of sacrificing some cheap thrills. One of the biggest concerns I have had with the design of WestJet rewards (I will explain later in the post) has just become perpetual with this development. And what leads to this is WestJet's probably inadvertent disregard to the following fundamental attributes to loyalty strategy:

Loyalty programs MUST earn their keep at the very least: Any loyalty program that exists is a liability – A liability the respective organization undertakes with a single biggest expectation of improved customer retention that results in significantly improved, continual revenue stream. That is not happening here. You see, I have ceased to book revenue tickets ever since I first noticed MEFs on WestJet's network. I will also not be surprised if many other customers take the same path as mine because there is hardly any reason for someone to pay substantially more for the same product – even more so to a low-cost airline. Long story short, MEFs coupled with the possibility of purchasing WJDs at the current prices undercut the airline's revenues instead of boosting.

Let me illustrate how this is a missed opportunity. With WestJet's new partnership with Air France- KLM came the new possibility for WestJet Rewards Teal members to earn WJDs when they fly either of the partner airlines and the WJD earning structure for flying economy on Air France, per sector:

The structure is pretty much the same for flying KLM except there are P, F, W, S, A fare classes in addition to the classes you can see in the above picture. Silver and Gold WestJet Rewards members earn 50% and 100% miles additionally. Now, I randomly looked up a return flight from Toronto-New Delhi with a layover in Paris (YYZ-CDG-DEL) between 21st Jan '18 and 03rd Feb '18 as shown here:

So, for the return flight, A WestJet Rewards Gold member can accumulate 80 WJDs given there are 3000+ flights each way and a Flying Blue Platinum member can earn 6844 miles. In a hypothetical best-case scenario, that can be worth almost $400 in CAD. $400! Even if you consider that overly optimistic, a $320 value is reasonably realistic. That's over 30% return on the $1042 spent for the flight towards an economy class redemption or a 15% return for even a teal member towards future travel. I don't know of any airline program that can beat that proposition. Just think about it; One has a good reason not to hesitate to book this flight even if another airline offers YYZ-XXX-DEL for $950 on the same dates. Heck! I personally would not mind ditching mileage credit to Flying Blue if I were a platinum member with such value proposition. However, in reality where I can purchase WJDs for about $1.20 each, one has a compelling reason to book the (imaginary) $950 flight or with an international airline that (s)he is a regular customer of. WestJet had the perfect opportunity, for one, of putting the success of their partnerships on overdrive and they just threw it away. Such a bummer!

Demand-Supply equilibrium is important: To ensure customer satisfaction amongst frequent flyers, any airline must ensure a reasonable balance between the supply of frequent flyer miles (WJDs in case of WestJet) and supply of saver awards (MEFs in case of WestJet). Essentially, the demand for saver awards almost always is driven by the supply of miles (WJDs).

Now that WestJet Rewards members can buy up to 3000 WJDs a year, there will not be a dearth in availability of WJDs while the MEF seats are restricted to 5 per WestJet domestic flight. One need not even stop at buying 3000 WJDs by using an account of a family member to buy 3000 more WJDs and so on. Sadly, some customers may end up signing up for WestJet rewards just to buy MEFs without buying even a single revenue fare ticket. The kind of pressure that would put on the availability is catastrophic and is sheer tragedy and injustice for most frequent WestJet Rewards members who spend thousands of dollars on revenue flights. What is supposed to be the first right of the frequent flyer will be denied and eventually drive their business elsewhere.

Let's take the example of Aeroplan. Soon after AIMIA – the company that makes money on each Aeroplan mile earned by its members - took over Aeroplan, they have turned Aeroplan which is a frequent flyer program (FFP) into a coalition program creating a flush supply of Aeroplan miles in the market by signing a multitude of partnerships. On the flipside, the supply of saver awards has been almost constant all the while leading to a widespread customer outrage. The dissatisfaction piled up to the extent that a GO PUBLIC petition was launched by frustrated customers in 2015 and AIMIA was forced to offer an explanation and CBC ran a segment covering the fiasco. Except for poor management, I do not think that AIMIA was acting with wrong intentions. That said, being cornered into the defensive is never good in any services industry, let alone the airline/loyalty industry. While I do not know how Air Canada handled the issue with its Altitude members, I know for sure that members are forced to book their saver award seats on many routes as soon as the seats become available almost a year ahead of the travel date and that poor economics of Aeroplan earned the program a long-term bad reputation amongst all its members. Economics of a loyalty program can make or break the program and in case of MEFs, it's most likely the later for WestJet Rewards.

Elite tiers of frequent flyer programs must be coveted: A multi-tiered loyalty program must always be designed with a plethora of both tangible and intangible benefits in the upper tiers to motivate and persuade customers to do more business to reach the threshold, making the loyalty program the flagbearer of marketing initiatives. This is not more relevant in any industry than in the travel industry. Now, remember that I said I have had a serious concern about the design of WestJet Rewards program just before I started talking about these 'fundamentals'? it's about time I tell you what it is.

WestJet Rewards program has 3 tiers, of which, Silver and Gold are elite tiers while Teal is the base tier open to just about everyone. Though there is nothing awe-inspiring, the elite tiers are well designed with decent benefits. The airline has even added a few welcome improvements to those tiers earlier this year, something I truly appreciate, as the update indicated to me that WestJet takes its frequent travellers seriously. Enter the WestJet RBC World Elite Mastercard! You see, there is nothing wrong with the credit card in question. It has been an excellent credit card for quite a while now. However, my concern is with the manner in which this elite credit card complements the elite tiers of WestJet Rewards. Let's take the case of Silver tier; Apart from accelerated earn rate, the features of this elite tier are 4 lounge vouchers and 4 seat selection vouchers a year (a theoretical value of about $180) and noteworthy unlimited number of 1st check-in baggage for up to 8 more passengers travelling on the same itinerary as the Silver member. The credit card offers the exact same feature to anyone who is willing to pay the $99 annual fee undermining the value of the silver tier. The value of the vouchers is good to have but not necessarily integral to travelling needs of most flyers. And when you look at the credit card from a Silver/Gold member, the card is more valuable to non-elite members than it is to the elite members which is not good. On the one hand, the credit card undermines the value proposition of the silver tier and on the other hand, elite members get less out of the elite credit card instead of more to drive customer engagement.

That was a concern WestJet can choose to ignore and may still do OK. That is not the case with MEFs; and once again, the ability to buy WJDs and use those to book MEFs wreaks havoc on the elite tiers of WestJet Rewards with a potential to virtually render not only the Silver tier but also the Gold tier redundant. One is better off paying for the benefits (companion vouchers included) of the elite tiers along while purchasing MEFs whenever available rather spending thousands of dollars on revenue fares to qualify for the elite tiers. There is absolutely no incentive to "earn" WJDs and that bothers me. And if that doesn't worry WestJet with regards to its rewards program, I can't fathom what else will! We live in a time when many airlines do not even status match to their highest tier to maintain the exclusivity of their niche customers and when more than a handful of reputed legacy airlines operate, sometimes secretively, ultra-exclusive super-elite tiers to rewards perpetual elite and to curtail the big spenders from jumping the boat when something better comes along; and WestJet's flipping a wonderful opportunity to make their elite tiers even more coveted into a total redundancy of its elite tiers could be suicidal.

The long-term impact of decisions cannot be ignored: A loyalty program must be designed with the foreseeable future taken into serious consideration to ensure that the program is consistent to the highest extent possible for the longest possible time. Changes that do not benefit customers may be necessary at times to adapt to changes in the market environment but frequent changes can quickly irate customers.

Come 2018, Canada is in for a major shake-up in the airline space. If we set aside the new entrants and the incumbent niche players such as Porter airlines for the sake of this argument, Canada will have Air Canada (Legacy), WestJet (Low cost) and WestJet's own Swoop (ULCC) flying the vast Canadian skies within the next handful of years. WestJet, to shield itself from the imminent onslaught of ULCCs, must give flyers a justifiable reason to pay more to fly the airline. They cannot leave any threat (tying into the previous attribute) that can eat into their revenues.

In another development, WestJet has a firm order for 10 Boeing 787-9 Dreamliner long haul, medium sized planes which will be delivered between 2019-2021. The airline has an option to buy 10 additional planes of the same kind if it wants to. When the new planes enter service, WestJet will first replace the ageing 767s on the existing routes, as I see it, before launching services to new frontiers in Asia, South America and Europe. WestJet's newly bolstered partnerships with all three major Sky Team member airlines are likely to play a dramatic role in the success of the Dreamliner in WestJet. It is no wonder if the market conditions allow WestJet to become a member of Sky Team. What WestJet brings to the table of the existing partnerships with the airlines will define the terms at which WestJet deepens the relationship with the big trio and also to any new partnerships they plan to get into. WestJet Rewards plays an instrumental role in not only filling the new planes with the program's members but, potentially, also filling the planes with the members of partner airlines.

Switching gears, let me first point out that I have nothing against WestJet despite my blunt criticism. In fact, I have been loyal to WestJet ever since I stepped foot in Canada and am an ardent fan of their stellar customer service that is a solid testament to how much they care about their customers. Though I have spoken about multiple issues with the WestJet rewards program, all the issues are nothing more than multiple facets of the same problem, in other words, WestJet's oversight of multiple red flags made MEFs on its network not so exclusive, undermining WestJet Rewards program significantly in the process. Since the purpose was not just to rant, let's get into what I think WestJet can do to alleviate the potential risks associated with the problem.

Credit is due where it is: MEFs on WestJet's networks are the best thing to happen to frequent flyers in a long time. There is no other to it. Given the changes in the FFP space in the past couple of years, customers have come to cherish when an airline (read Alaska) announces that it is keeping the core structure of its FFP unchanged. Once again, what is the problem, then?

If we travel 6 months back in time to when WestJet-Delta enhanced reciprocal frequent flyer agreement happened, we can get a glimpse of where it all began. The ubiquitous partnerships in the airline industry all have a certain aspect that all the participants have as a standard that WestJet doesn't comply with when it comes to redemptions of partner airlines. While all the prominent FFPs are designed around miles, WestJet's is designed around dollars. Coupled with limited potential for earning WJDs, the mismatch in rewards structure compelled WestJet to cut some corners to balance the partnerships. Based on how aggressively WestJet is marketing MEFs on partner airlines, it is quite a possibility that MEFs were pre-dominantly conceived for the sake of the partnerships and MEFs on WestJet's own network were a mere by-product. And since WestJet Rewards members are highly unlikely to accumulate the hundreds of WJDs required to redeem towards MEFs on Delta's network, WestJet may have been compelled to sell WJDs at a near $1 price to generate enough demand for the partner flights. With so much going on all at once, it is not surprising WestJet did not realize that they were breeding the Frankenstein's monster or its threat to MEFs on WestJet's network.

What should WestJet do in this scenario? As mentioned earlier, the first right to MEFs on WestJet's belongs to the loyal clientele of the airline. MEFs are meant to be booked with WJDs earned through activity, not with WJDs bought at a near dollar cost. Hence, the answer lies in the name itself. Make the Member Exclusive fares exclusive. It is understood that WestJet cannot retract sale of WJDs or sell MEFs on partner airlines outright as revenue fare without violating terms of the reciprocal agreement. But the necessity to create a clear distinction between the availability of MEFs on WestJet's network and partners' network is second to none. Also, WestJet cannot choose to make the MEFs on its network subjectively without backlash in the future. What they can do, however, is choose objective: Make Member Exclusive fares on WestJet (domestic MEFs) visible to only those members who have the requisite number of WJDs. This is the best thing they can do, that I can think of, for their own good even though it is not entirely a foolproof plan. One may just buy some WJDs and gain access to domestic MEFs, but then, one will also not buy WJDs unless (s)he is serious about doing business with WestJet. Also, given that domestic MEFs are still not widely popular, it's still not late to restrict the availability of domestic MEFs to the deserving.

While at it, there are two other things WestJet could do to boost the quality of WestJet Rewards elite tiers. First, WestJet could unveil Member Exclusive Plus fares as well, maybe at twice the price of economy MEFs, for the elite members to take benefit of instead of selling an upgrade at $50 at check-in. Second, allow elite members and WestJet RBC World elite credit card members to redeem their Companion vouchers towards domestic MEFs when at least 2 seats are available in the fare class. Godspeed to Member Exclusive fares!

Should WestJet let Member Exclusive fares be as they are at the expense of their revenue or fix the loophole to avoid exploitation? Let me know what you think in the comments. If you agree with my argument, please do SHARE or hit 'Thumbs up'. Let me also know in the comments if you wish to know what I think WestJet can do to ensure that both its elite credit card and tiers complement each other.