PESTEL Analysis: Political Factors: "The 'Open Skies Agreement' between governments of US and Canada in March 2007 came into action as it liberalized the air transportation services. Cargo and passenger services as well greater flexibility in the operations developed" (Air Canada Annual Information Forum, 2011-2012). Economical Factor: "In early 2000 Air Canada along with entire airline industry faced huge loss due to the high global economic downturn. With slow travel outstanding to the downturn and September 2011 incident the airline industry was hit extremely hard. Air Canada consequently posted net losses of $1.32 billion in 2001 and $828 million in 2002. Furthermore, with the spread for SARS disease Air Canada’s Asian route got effected …show more content…
Classic Pods have massage function, touch TV screen and long lie-flat mode". With the changes in consumer's behaviour and trends, these are demands of consumers. Environmental Factors: The new trend in airline industry to use fuel efficient, high -tech aircraft is of a major concern for Air Canada. It has been under immense pressure to replace its fleet aircraft with more efficient Boeing 777 aircraft. However, the airline has purchased some Boeing777 aircraft, but these new purchases are used only for more profitable international routes depriving Air Canada’s domestic consumers of the facility. Furthermore, the varied fuel price has affected pricing policy significantly as its promotional policies are more price point based as compare to consumer based. Legal Factors: The legal rights of its employees must not be violated. "For the assurance of smooth operations, Air Canada comply with all the law defined criterion such as no excessive burden etc on employees as per defined by the law. The safety, hygiene, and effective regulations are factors that are legally imposed, and Air Canada do operate within the capacity of …show more content…
For these administrations it utilizes Boeing 777s and Boeing 787s as an unmistakable item. Price: Air Canada assure the consumer's that it's price the best in the region as it states, "Stop searching far and wide. You’ll always find the lowest Air Canada prices right here on aircanada.com. Promotion: Air Canada has promoted itself in the targeted audience through efficient and effective positioning strategy. Onboard Cafe, Maple Leaf Lounges, Aeroplan loyalty program, and Air Canada Altitude program. "For the frequent travelers; such as adventures, dreamers, world explorers Altitude is a ticket to enrich their worldly experience". Place: Air Canada has deliberately set its self around the domestic and also worldwide market of carrier industry. The aircraft has substantiated itself as a superior Canadian brand becoming a part of Star Alliance, joined different famous carriers such KLM, Lufthansa carrier, Thai aircraft and so forth. Moreover, Air Canada has code offering consent to in excess of 26 aircrafts including Swiss Airlines, Singapore Airline, Etihad Airways et
The following value chain, which focuses on Spirit Airlines, is representative of most of the firms in the Ultra Low-Cost Airline industry. Spirit is the industry leader in many areas such as operational efficiencies/cost structure, aircraft fleet management, brand/network and growth. The firm, however, trails industry foes in areas such as customer service and operational reliability and recoverability. While most in this segment pursue the cost-leader competitive strategy, Spirit has demonstrated the most effective model to date – whether the model is the most sustainable remains to be seen.
Qantas has undertaken significant changes over the last decade to cope with internal and external factors such as the terrorist attacks on September 11, 2001 which effectively reduced the demand for international travel. Qantas initially reduced its international travel flying capacity by 11%. Fortunately, the collapse of Ansett which halted domestic competition in the Australian aviation industry which had dropped the bidding price war for consumer finances, softened the blow on September 12, 2001.
After September 11th, 2001, the airline industry experienced a significant drop in travel. The reasons for the airline industry downfalls also included a weak U.S and global economy, a tremendous increase in fuel costs, fears of terrorist's attacks, and a decrease in both business and vacation travel.
According to the International Air Transport Association, 2001 was only the second year in the history of civil aviation in which international traffic declined. Overall, it is believed that the IATA membership of airlines collectively lost more than US$12 billion during this time (Dixon, 2002).
In order to measure the impact of United's price increase, we would need the price elasticity of the demand. The main problem is that there is no agreement as to whether, generally speaking, air transportation is or is not relatively price elastic. There is ample evidence that the introduction of deeply discounted fares by the low cost carriers can be very price elastic, although, each type of traveler has its own price characteristics.
Along with the low stock index numbers of September 17th, the airline industry and travel stocks were also rocked. One of several airlines announcing layoffs, US Airways said that they would be terminating 11,000 jobs. These heavy losses were contributed to airlines “being grounded last week [week of September 11th], plus passengers have been apprehensive to fly, in the wake of the hijackings” (Stock Markets Reopen 1).
In addition, there is the country’s largest distribution center in Quebec. Halifax imports approximately 25 % of Canadian Tire’s shipment; on the other hand, Vancouver imports rest of them (Ouellette, 2010, p2).
Airline and travel industry profitability has been strapped by a series of events starting with a recession in business travel after the dotcom bust, followed by 9/11, the SARS epidemic, the Iraq wars, rising aviation turbine fuel prices, and the challenge from low-cost carriers. (Narayan Pandit, 2005) The fallout from rising fuel prices has been so extreme that any efficiency gains that airlines attempted to make could not make up for structural problems where labor costs remained high and low cost competition had continued to drive down yields or average fares at leading hub airports. In the last decade, US airlines alone had a yearly average of net losses of $9.1 billion (Coombs, 2011).
Addition to caring to the guests, westjet involve in many community investment, which reveal that westjet's culture of caring has not ended at the aircraft door. (3)Westjet take contribution to the society as their responsibility and participate in charity programs, such as Missing Children Society of Canada and The Canadian National Institute for the Blind. It is not hard to say that westjet is very caring and thoughtful.
Air Canada is Canada's biggest aircraft and the biggest supplier of booked traveler benefits in the Canadian market, the Canada-U.S. Trans outskirt showcase and in the worldwide market to and from Canada. In 2015, Air Canada together with its Air Canada Express provincial accomplices conveyed more than 41 million travelers, offering direct traveler administration to more than 200 goals on six landmasses. Air Canada is an establishing individual from Star
Several weaknesses in airline operations were identified as the causes of the RM1.3 billion loss. These included esclating fuel prices, increased maintenance and repair costs, staff costs, low yield per available seat kilometer ("ASK") via poor yield management and an inefficient route network.
Airline industry is affected by no. of factors such as fuel price fluctuations, high fixed costs, strong influence of external environment and excessive use of marginal costing by carriers. Recessions in the industry tend to last longer, while recovery periods are generally shorter. Over the past nine years, it is observed that industry has made losses for five years and during the profitable years margins were on a lower end. The airlines industry is acutely sensitive to external events such as wars, economic instability, government policies and environmental regulations.
When a business aims to be as successful as possible in selling its products and services, it must examine in detail whether or not the products will be attractive and necessary; if the price is optimal; if the product is being distributed in the best locations; and finally, how interest and awareness can be created for the products. In order for a business to target all of these elements to the right people at the right time, it must employ the right type of marketing mix: Product, Price, Place and Promotion. In a dysfunctional time for the airline industry, most airlines, especially major carriers, are adapting the concept of "doing less with more." One low-cost carrier, JetBlue, is changing the domestic aviation landscape in this regard and is defying the odds. Here is a company that has examined each marketing mix elements carefully, has adapted them to its customer’s needs, and is succeeding because of this approach.
When an airline does not have a sustainable competitive advantage, it does not have any properties of differences from there competitor and turns to a dangerous price war. The sustainable ...