In the Mid-1990s,WestJet Chose to Compete Head-On with Air Canada

question 78

Multiple Choice

In the mid-1990s,WestJet chose to compete head-on with Air Canada by launching WestJetLite,an alternative low-fare commercial airline passenger operation.Top executives at WestJet had expected its no-frills operation to break even within a year of its inception,but the airline fell short of the goal.A source close to the company explained it by saying,"Its costs were too high,and its revenues were too low." Some observers criticized WestJetLite's marketing efforts.When the no-frills service was first launched,it lacked a distinct name or identity,missing its chance to make a splash.Then WestJet tried to sell three "brands" at once-Plush ,a new premium service,and its more traditional long-haul domestic flights.As one rival expressed it,"You cannot be all things to all people."
-Refer to WestJetLite.The statement that WestJetLite had problems because,"Its costs were too high,and its revenues were too low," suggests which of the following?

• A) The airline had no revenue left over after paying for airline activities.
• B) The airline had no profit left over after paying for airline activities.
• C) The airline had no returns left over after paying for airline activities.
• D) The airline had no ROI left over after paying for airline activities.

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Definitions:

Discount Rate

The interest rate charged by central banks to financial institutions for short-term loans, influencing monetary policy.

Reserve Requirements

Central banks' mandates on the minimum reserve levels that financial institutions need to uphold for their deposits.

Securities

Securities that signify ownership in a publicly-listed company (stock), a debt obligation to a government entity or a company (bond), or entitlements to ownership conveyed through an option.

Legal Reserves

Legal reserves are funds that financial institutions are required to hold in reserve against deposits made by their customers, as dictated by regulatory authorities.