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Air Canada Strategic Report.docx

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University of Ottawa

Since the beginning of time it has been peoples dream to learn how to fly It all started in ththe 19 century when many innovators attempted to create the first flying apparatus Although many succeeded at creating what we now know of as a personal glider these advancements were thvery primitive in their nature It wasnt until the early 20 century that these concepts were turned from concepts to reality by the Wright brothersThe wright brothers took what most individuals would consider an unrealistic vision and turned it into actuality They had built the 1first controlled powered and sustained flight ever recorded It took them many more years to develop these concepts into more practical applications and it took many other innovators to develop the high powered jet airplanes the airline industry now uses on a daily basisAir Canadas Core Strategy Figure 1Air Canadas has gone through multiple restructuring phases following its bankruptcy protection filing which were crucial to the continuance of Air Canadas existence Through these changes Air Canada has expanded its market share in multiple different markets maintaining its image as a national brand and its continued success Air Canadas has become a very important national corporation offering opportunities to its many stakeholders around the world Its ultimate mission and objective is to keep a laser focus on improving and simplifying the customer experience at every point in their journey One 2way of simply putting it is they wish to connect Canada and the World It is necessary to understand the airline industry structure and the competitive environment before analysing the internal core strategy that Air Canada currently instills The Airline industry has come a long way thsince it was first established in the early 20 century Its given the World opportunities beyond most peoples comprehension allowing increasing globalization the possibility to reach further and further destinations to the average North American and even providing opportunities for individuals to build a career in and increase the standard living The Airline industry is divided into four categories international domestic regional and cargo flight networks Air Canada has a leading market share in the international domestic and regional flight networks and offers a variety of cargo shipping capabilities In order to comprehend the competitive presence within this industry the use of the five porter forces analysis can be used to identify these characteristics The threat of new entrants although at first may seem quite low it most definitely isnt true New Airlines have been emerging in the past decade increasing competition and slowly gaining market share as well as increasing saturation of the markets little by little This brings emphasis on brand recognition and frequent flyer programs as new airlines like WestJet or Porter airlines form new lowcost niches to compete with Air Canadas domestic flights The power of suppliers is fairly strong as there are only two major manufacturers of airplanes Boeing and Airbus accordingly The power of buyers isnt very high as most airlines offer the same service with the same chairs and often time switching companys costs a great amount in cancelation fees The Availability of substitutes although very low for international flights as using other modes of transportation are not convenient the domestic and regional categories have seen increasing use of trains and automobiles The competitive rivalry in the airline industry has seen increasingly more and more new entrants These new entrants have positioned themselves in the no frills lowcost niche against Air 1 WrightDrSteveandDrGaryBradshawWrightbrothersWilburandOrvilleWrightWrightHouseFrankLloydOrvilleandWilburStevenNpndWeb12July2011httpwwwwrighthousecomwrightbrothersWrightshtml2 RousseauMichealBANKOFAMERICAMERRILLLYNCHGLOBALTRANSPORTATIONCONFERENCEAirCanadaNp16Aug2010Web8Dec2011wwwaircanadacomenaboutinvestordocumentsbankamericajune2010snpdf
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