Chapter 10

Chapter 10 Blog

http://www.ctv.ca/generic/generated/static/business/article1602721.html

Summary
Rumours have been speculating that China Eastern Airline is coming to a partnership with WestJet Airline Ltd. to cooperate in ticket sales and luggage transportations. WestJet will provide connecting, domestic flights in Vancouver for travelers traveling on China Eastern from Shanghai. WestJet also aims to come up with several international deals with other airlines to maximize its coverage of Chinese leisure travelers’ market. Forecast for WestJet joint-partnerships with the airlines is strong as China was recently granted approved destination status (ASD) from Canada and thus more Chinese tourists will be able to come to Canada. In addition, as Chinese average income steadily elevates and major events promotes stronger identity of global citizen, desire for Chinese to see foreign lands will continue to grow in the future.

Connection
Partnership is from of business where there are more than one owner in a business. However, this is not the case for China Eastern and WestJet. In this context, these companies are in a business partnership in which they share the same interests. These firms do not necessary has ownership in their partner, yet they cooperate. Furthermore, acquisition of partnerships by WestJet is targeted to fight against its biggest competitor, Air Canada. WestJet and Air Canada has dominated the Canadian domestic air industry. It is a very concentrated industry as it can be identified as an oligopoly. Partnership of WestJet will allow tourists travel more conveniently and economically, hence improve competitiveness of WestJet against Air Canada because customers will change their choices of airlines.

Reflection
I think WestJet has made the right decision to become partners with other airlines to expand its customer bases. First of all, because it is more convenient for customers to travel internationally and domestically in Canada through WestJet and its partners, WestJet becomes more competitive comparing to Air Canada. WestJet will be able to acquire more market share and thus increase their revenue. Moreover, Increase in sales also improve WestJet Cash inflow as most of the ticket sales are processed by cash or credit cards. WestJet is a public-traded corporation on Toronto Exchange and I predict this positive news will boost its share price up as investors have stronger forecast on WestJet. Last but not least, volatility of oil price might pose an advantage to them as oil price took a huge slump in the last months.