The Cost of Oil: WestJet Forced to Offer Discounts In and Out of Alberta

The crash of the Canadian loonie has impacted everything from the price of apps, groceries, and travel; putting those plans of going shopping in New York on hold.

The drop in the dollar has also had a negative impact country-wide, with Alberta taking the brunt of it. The oil and gas industry in Alberta is already suffering and now the weaker dollar is keeping Albertans put.

Canada’s second biggest airline, WestJet, has experienced such a drop in travel demand, especially in Alberta, the company has been forced to lower their prices in order to fill planes.

This move follows the news of WestJet announcing that they’re reducing travel services in Calgary and Edmonton.

Last year, WestJet was able to continue its regular services in Alberta as severance payments to laid off workers in the oil-and-gas sector and related fields (as well as performance bonuses that were based on results before oil’s sharp crash), “kept things afloat for most the year” Gregg Saretsky, CEO of the Calgary-based airline, told Global News.

The current impact is hitting the company harder than than the last major recession in 2008.

This past Tuesday the carrier reported weaker earnings through the final three months of the year, forcing WestJet’s shares to plunge more than 10 per cent. WestJet officials are referring to the drop as the “Alberta effect.”

In order to overcome this bump in the road the airline is planning on taking advantage of the downturn in oil prices and subsequent savings it’s reaping from jet fuel (the airline’s biggest expense) to pursue its growth strategy, Global News reports.

Saretsky said the airline isn’t suffering a huge loss from their discounted prices, but he did suggest that, “if [the rest of] Canada starts to catch the cold from Alberta, we’ll clearly have to revisit our capacity plans.”

So if you’re thinking of planning a trip to Alberta any time in the future, now’s your chance to get more for your dollar.

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