Abstract
The airline industry is, once, one of the most highly regulated industries in Canada. Initially a government owned company, Air Canada has enjoyed the monopoly and protection of the country’s legislation. However, the increased pressure to improve the country’s airline industry led to its privatization. In the modern era, the need to be more competitive has been more pressing than before as Canada’s airline industry became open for competition. In a bid to improve the company’s business processes and customer experience, in 2011, Air Canada employed IBM’s expertise in providing computing systems. This partnership aims to address Air Canada’s marketing strategy, which is to simplify the customer’s experience. In an increasingly competitive environment, Air Canada finds it necessary to invest in information technology and it did so by choosing IBM, one of the pioneers in the computer industry and a leader in I.T. business solutions. This paper discusses the advantages of Air Canada’s partnership with IBM and how this partnership impacts the airline’s future sustainability. It also reports on how the company needs to change in line with the current trend wherein clients increasingly utilize I.T. services for convenience.
Introduction
Formerly known as Trans-Canada Airlines, Air Canada was created and operated by the Canadian government in 1937; serving as the country’s national flag carrier (Historica Canada, n.d.). Since its creation in 1937, Air Canada has become one of the largest and longest serving commercial airlines in the world to have maintained an uninterrupted operation. Over the years, the company has sought ways on how to improve its service. Just recently, its Customer Solutions and Innovations team with Patrice Ouellette as its director, announced the company’s partnership with long-time information technology specialist, IBM, in an effort to improve the carrier’s customer experience. Being leaders in their respective industries, the collaboration between Air Canada and IBM is nothing less than groundbreaking, which could define the future of airline companies in terms of customer service.
The Need to Improve the Airline’s Processes Through I.T.
One of the initiatives that the company launched in order to improve its competitive advantage is to improve its customer service through the utilization of information technology. The company’s Customer Solutions and Innovations team recognize that the only way to improve its customer service is to make sure that the company’s services is made more accessible to as many people as possible. For the same reason, in 2011, the company signed an agreement with IBM for the latter to provide, IT-based, Human Resource services. These services includes: “HR services for Air Canada employees, managers and retirees, including HR contact center, employee data management, employee travel support, payroll, benefits administration, leave management, and certain recruiting services, in support of Air Canada's North American Operations” (IBM, 2011).
The IBM Company
As far as computer and information technology solutions is concerned, IBM is one of the leading players in the market. Starting out as a maker of tabulating machines, the company has been around since the 1890s; inventing and developing hardware and software solutions for different industries (IBM, 2008). Air Canada is just one of the many companies that the company serves globally. As its name implies, IBM, which is short for International Business Machines, is an expert in developing computing hardware and software business solutions. As far as aviation technology is concerned, the company boasts a 50-year experience, providing service to airline companies around the world in order to improve their operational efficiency and customer service (IBM, 2011).
Simplifying Customer Experience
Air Canada’s contract with IBM cost the company $80 million, a contract that is only valid for eight years (IBM, 2011). Nevertheless, the company is hoping that the cost will be negligible compared to the benefits of upgrading the company’s IT services. The shifting trends towards IT services is one of the major reasons why Air Canada employed IBM’s services. It becomes increasingly obvious, for instance, that most people are using computing technologies in almost all of their interactions. Air Canada’s Director of Customer Solutions and Innovations, Patrice Quellette, understands that such trend will only intensify in the future. With the help of IBM, Quellette would like to position Air Canada in line with the advancement of information technology. A move that would define Air Canada’s leadership and sustainability. The partnership with IBM, according to Quellette, is aimed at simplifying the customer’s experience; a strategy that has been proven effective, particularly in the airline industry where the competition is intense (IBM Corporation, 2011).
I.T. Solution in the Airline Industry
Air Canada’s investment in the development of its information technology platform is not a new concept. In fact, most of the commercial airlines in the world today are looking towards I.T. for their business processes and customer service solutions. Ryanair, one of the largest airline company in the United Kingdom, for example, has made a similar approach. Today, 98% of the company’s ticket sales are made online (IdeaWorks, 2012). Furthermore, the company earns ancillary income through its website by promoting other products. Information technology is the future of the airline industry. For the same reason, investments in this area could not be avoided. Rather, a company who wishes to make its development sustainable, should pursue development in this area. As to how much revenue the company could gain with the IBM partnership could not be fully determined. However, it is safe to say that such initiative is imperative since most of the company’s clients and potential customers are increasingly using online services for booking their flights.
Conclusion
Air Canada’s decision to look into information technology as a platform to improve its business processes and customer service is inevitable. With the current consumer trends wherein people are increasingly using their gadgets and communication devices to interact with their personal and business needs, Air Canada has no other choice, but to change towards the direction of the trend. On the other hand, Air Canada’s partnership with IBM is a timely decision that would have a profound impact to the airline’s future. Using IBM’s expertise and experience in information technology, the company is strategically placing itself in a position wherein it can maintain its lead in Canada’s airline industry. With Air Canada’s hardware and software system in place, the airline would be able to perform its business process more efficiently and, in effect, serve its clients better. Apparently, there is not better way to achieve the goal of simplifying the customer’s experience than making the company’s services accessible anytime, anywhere through information technology.
References
Historica Canada. (n.d.). Air Canada. Retrieved from http://www.thecanadianencyclopedia.ca/en/article/air-canada/
IBM. (2008). Think: A History of Progress. Retrieved from https://www-03.ibm.com/ibm/history/interactive/ibm_history.pdf
IBM. (2011). IBM to Provide Human Resource Services to Air Canada. Retrieved from https://www.ibm.com/news/ca/en/2011/10/06/b261592d68343y85.html
IBM Corporation. (2011). Air Canada: On a never-ending push to make life simpler for the customer. Retrieved from http://www-05.ibm.com/innovation/uk/wimbledon/pdf/Air_Canada.pdf
IdeaWorks. (2012). Ryanair - The Godfather of Ancillary Revenue. Retrieved from http://www.ideaworkscompany.com/wp-content/uploads/2012/05/021908AnalysisRyanairAncillary20081.pdf
