Case Study On Air Can

Air Canada is a full-service airline and is currently the largest airline in the whole of Canadian market. It provides scheduled services to its passengers in not only the Canadian market but also the Canada-United States trans-border market and the to and from international market of Canada. Air Canada works together with partners in the region to provide service to an approximate of thirty-five million passengers in a year. Air Canada has more than one hundred and seventy-five destinations across all the five continents. Over the years, Air Canada has been known to make a lot of losses until recently in the second quarter when all these changed and despite increases in the fuel prices, it managed to make lots of profit. The airline has just not managed to make profits with the current rises in fuel prices but also during the time that the Canadian dollar showed a major sign of weakness. Considering that that this airline is international and connects to several destinations all across the world, it raises the question of how did this airline manage to maneuver its way through all this limiting factors and still manage to make profits.
Air Canada over the years has faced several challenges. One of the significant problems is the fast rising prices that are charged on fuel. When fuel prices rise, the overall expenses of the company also increase because fuel is a basic requirement in the operation of the aircrafts. To reduce the expenses incurred by the increased fuel of prices, shorter aircraft routes have been designed to reduce the distance that aircrafts travel before they reach the final destinations. Also, fuel is obtained from cheaper sources and bought in bulk. This is not so easy but when gas is available in large amounts it works.
Another problem frequently faced by the Air Canada airlines is the frequent weather changes from time to time at different locations across the six continents. Because Air Canada connects different parts of the world, it becomes difficult for the meteorologists to predict correctly all the weather changes that will occur during the flight times. This has. As a result, led to abrupt weather conditions disrupting flights. To reduce this problem of unexpected weather changes, more stoppage points have been put in place in between flights so that the weather conditions can be monitored closely from time-to-time as the aircrafts travel to their final destinations reducing the changes of flights flying into unexpected weather conditions such as hurricanes or tornados.
Also, Air Canada is at times faced by the problem of safety of the aircrafts. This can be tied to the idea of diseconomies of scale. Air Canada has currently expanded to the extent that it offers service to about thirty-five million people. This is a very big number, and all the lives of these individuals lie on the management of the company. On the other, the difficulties and inefficiency of management decrease with the increasing size of the company. The management therefore has a duty to ensure that all the people they provide services to are safe from threats such tourist attacks such as aircraft hijacks or bombing, accidents resulting from aircraft malfunctions or human errors such as pilots landing aircrafts on runways before releasing the aircraft wheels. Air Canada is trying to prevent these problems by employing more pilots ensuring that all pilots have sufficient time to rest before flying the next aircraft, installing security devices such as cameras in the aircrafts and bomb detection machines at cargo points to ensure no entry of dangerous explosives into the aircrafts. The aircrafts are also maintained and serviced regularly to prevent accidents due to aircraft malfunctions. My thought on this is that the management be improved by using new technology such as advanced surveillance cameras, and the management be rotated and altered frequently to reduce chances of terrorists working with inside people.
In addition to the above, another problem that faces Air Canada is the difficulties in coming up with and implementing effective internal strategies and/or efficiencies. This kind of strategies, are in most cases dominated by internal management strategies and the strategies to attract more customers while at the very time maintaining the one they already have. These strategies can as well be defined as innovative ideas for optimum operational conditions and maximum output of the Airline operations. To curb this problem, the Airline employees people whose sole intent is to come up with new strategies now and then to counter the emerging issues in the company. These employees are more like advisers to the management board and at times can also be considered as researchers and innovators as they study the industry before they make conclusions on what methods are best to employ against competing companies and to achieve the most efficient output and maximize profits as well.
Air Canada also faces a common problem of trying to satisfy the customers’ high levels of expectations from the company. This means that the company has to put in an extra hard work in trying to please the customer regardless of whether it gains from providing such services or not. To reduce this problem, Air Canada tries to make the passengers’ flight time as comfortable as possible. The aircraft seats, for instance, are made with as comfortable material as possible to cater for long flight hours. Also, sources of entertainment such as headphones are provided in the aircraft to reduce bored, and this applies even to books, games and internet services. Also, the meals provided are five star hotel meals. The challenge comes when after all these luxurious services are provided to customers they still complain of flight prices and the company to make them as minimum as possible and even give free tickets to their regular customers just to keep them.
Also, a major problem with the Air Canada is the difficulties and expenses they have to undergo in order maintain signs green and sustainable behaviors. This involves taking part in and maintaining life's day-to-day activities such as giving charitable assistances, donations and being a party of community works just to maintain a good name. This can also be seen in sponsorships of events that have nothing related the operations of the company. All this is done so as to make the company look good and caring in the public eye. The company has no way to dodge around this and the best it can do is to limit such expenses to a minimum and participate in as few of such operations as possible. Participating in this kind of operations can however at times if well targeted can be of benefit to the company. This is in the form of advertisement as the company name appears in all the places in which they are involved in or took part in. A good example is when, for instance, the company sponsors a Television Broadcasting show. This is a very good advertisement plan.
The Air Canada also faces the problem of weak Canadian dollar currency. This affects especially the International market of the company. Each time a customer pays in a foreign currency, the company looses money when it exchanges the money back into Canadian dollars. A good illustration of this is seen when the British pound is compared to the Canadian dollars for instance. The British pound is way stronger, and this means that the customers who pay using the British pounds are at far more advantage than those that pay using the Canadian dollar or even a much weaker currency. The company has no control on this problem, but it can alter the charges such that, customers from countries with stronger currencies pay a little to cater for the loss incurred during currency exchange. From my opinion is if this is a major problem they should probably consider investing more in countries with strong currencies.
Despite all the problems discussed above, Air Canada as a company still has vendor strategies. These are the strategies they have come up with in order to build their customer base. Some of these strategies include the use of Information Technology for fast and efficient running of the company.
Air Canada relies on a lot in the Information Technology for their day-to-day operations. They use Information Technology on operations such as passenger bookings, balancing and checking the weight of aircrafts just before take off, and the processes of bidding enabling pilots, and attendants get to choose their flights. Air Canada, therefore, uses Information Technology to simplify their work. The use of information technology extends further to use of even web check-in, applications on iPhones and Blackberry, making it easy for customers of the airlines to access services. The main users of the Air Canada Information Technology services are majorly the business branches and commercial branches. The business branches include such services as in-flight services and commercial relations. The commercial branches, on the other hand, include services such as aircraft maintenance services and flight planning services.
Another vendor strategy that is used by Air Canada is offering their customers with services such as better and comfortable flight time. This is by giving them good food, sufficient entertainment, comfortable seats that attract those who take flights. The aircrafts also have special locations for top class people helping them to maintain their status without disruption from other people such as first-class tickets. This way they can accommodate all classes of people comfortably.
Air Canada also uses advertisements as another strategy to increase the customers who use their aircrafts. This is usually done on billboards, radio networks, television broadcasting networks and many more broadcasting stations. These advertisements help to capture the attention of many people and tend to encourage them to try the Air Canada airlines. Advertisements usually are made to introduce new aircrafts in the market or any other added services to the airline.
Another vendor strategy implemented by Air Canada is giving flight offers to their customers once in a while during vacation periods such as New Years’ eves. The offers can be lowering prices by a certain communicated percentage or providing double tickets at a lower price for couples. The company also lets frequent customers get a chance to fly free or at a lower cost at any time they want. This only applies to their known customers, and they must be flying with Air Canada airlines frequently.
Another strategy that Air Canada has used to improve their number of customers is by having a lot of airline destination points all over the world in all the five continents. These destinations not only provide stopping points for long flights but also attract customers who live in the neighboring areas or countries. For instance, the destination points of the Airline in the United States of America attract customers from that particular state and from other neighboring states. This way the number of people who use Air Canada is intensely increased. Considering that the total number of such destinations used by this one particular airline is one hundred and seventy-five and is spread all over the world by simple mathematics it can be seen that more than a million customers are attracted to use Air Canada without even the use of advertisement.
Also, Air Canada uses the Internet to increase it sale of tickets. They have a well-developed website where people can book for flights and order for tickets. Through the website, people can also be able to evaluate the services they offer and compare with other airlines. The website also shows the history of the airline enabling the customers to read and comprehend what they are dealing with before they make a decision to use it. This act of digging into the history of the airline not only gives the reader past information about the airline but also increases his or her confidence on the reliability on the services offered by the airline. It can, therefore, be concluded that airline also uses the Internet to inform the customers of the services they offer and at the same time increases the customers’ confidence on these services. The use of the Internet in the design of a website just like the above discussions is a vendor strategy used by Air Canada airlines to improve their ticket sales.
Another strategy that Air Canada uses to increase the sales of the airline tickets is by allowing people to invest in the business in the form of shares. After the company got back on its feet after four years of successive losses, it allowed people to buy shares and, as a result, it managed to expand and become the largest Airline in the whole world. This way the company managed to outdo a lot of his competitors and in the process conquer the airline business. A big company means a lot of customers and therefore we can conclude that by the company selling shares and managing to expand, this was a great vendor strategy. The total net profit increased from forty-one cents up to forty-seven cents per share.
Also, there is another vendor strategy in which Air Canada lets other airlines use their routes and in return get paid for the services offered. The airlines these routes also use the Air Canada's stoppage points and runways. Air Canada, as a result, gets paid for the services they offer and at the same time reduce completion as they form alliances an incorporate other airlines. Because it's a big corporation, it is in the best position to decide on most crucial issues and in the process influence the decisions of other smaller airlines. As a result, it only keeps growing bigger and bigger. Moreover considering that Air Canada has a lot of routes joining all the one hundred and seventy-five destinations, the overall idea is that by hiring out some of the routes they are able to make millions of dollars without using their own aircrafts. This is money they make from other airlines' customers.
Over the years, Air Canada as an airline has shown major trends in use of Technology for innovative purposes. This can be observed in the use of such devices as digital cameras and audio recording devices in the pilots' cockpit. These audio recording devices are used to record pilot and operator conversations to be used later should anything go wrong during the time of flight that need to be researched. Usually, these audio recording devices are fire proof and can still be recovered after crashes without being destroyed. Air Canada has shown installations of such devices in their aircrafts and monitored them over the years.
Also as innovation, bigger aircrafts have been developed to carry more passengers and rather more comfortably. Air Canada has embraced these new aircrafts and used them carefully over the years. These places are longer in length and width. Also, the runways built for this big aircrafts are longer than for smaller aircrafts are they require more time to take off from the runway or to land on the runways. The parking spaces of the aircrafts are also larger to accommodate their sizes, and the marking of the parking place is also of different dimensions from the smaller aircrafts. Bigger cargo aircrafts have also been developed to transport heavy goods such as vehicles, construction materials and many other heavy vehicles. Air Canada has embraced such aircrafts with lots positivity and the new changes that come with them.
The Air Canada airline is involved in both insourcing and outsourcing. The company has used insourcing more than outsourcing however. A lot of the companies operations have been accomplished by the use of Air Canada airline own resources. A good example is the company’s aircrafts. The passengers are always flown in the aircrafts that belong to the company and not borrowed. Outsourcing in the company was more pronounced in the past before it started making profits and expanding. After expansion, outsourcing has not been very common. However looking at the fact that the Air Canada’s company shares are owned by certain individuals, we cannot say outsourcing is completely not in the picture. My opinion is that insourcing is better than outsourcing but for the case of Air Canada, outsourcing was not a bad idea.