airplanes and WestJet "Christmas Miracle"

The WestJet “Christmas Miracle”

by Elaine Schwartz    •    Dec 14, 2013    •    697 Views

During an airport check-in, passengers on 2 WestJet flights to Calgary told a virtual Santa what they wanted for Christmas. They boarded, took off, probably forgot Santa entirely.

But then, calling it their “Christmas Miracle,” WestJet greeted those 250 or so passengers with a baggage carousal filled with the gifts they requested. The person who has since become known as the “socks and underwear” guy might not have been so happy. But the little boy with the biggest smile said, “No way!!” when he unwrapped his Android tablet. Other gifts included a 50″ plasma screen TV, a camera, and a Ken doll for the woman who asked for a husband.

WestJet says its “Christmas Miracle” video (below) was all about the holiday spirit–not PR. But still, thinking economically, we should ask if a video that has gone viral with 20 million views will make a difference in demand.

An answer takes us to price elasticity of demand. Consumers with elastic demand tend to have a large response to a price change while those with inelastic demand will change their buying habits minimally, even with a sizable price move. For airlines, we can divide demand between the business and discretionary traveler. Business people tend to have inelastic demand. However, for families planning a vacation, choosing an airline might depend on price much more than knowing that your carrier has a big heart.

Sources and resources: This NPR article tells more about the video while this paper looks more closely at the complexities of airline price elasticities of demand.

 

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