Air Canada Essay

874 Words2 Pages

In 2011, Air Canada was Canada’s largest airline and the 15th largest commercial airline in the world, serving over 32 million customers annually with more than 170 destinations. Their mission was “connecting Canada and the world.” According to Air Canada’s Senior Vice-President of E-Commerce and Chief Information Officer, “We are in the customer service industry. In this line of business, the differentiators are service level, identification and innovation, but innovation is the key” (Karimi-Alaghehband and Rivard, 2014, p. 1). Air Canada was pursuing the dual strategic objectives of operational excellence and building customer loyalty through innovation. This pursuit created unique challenges for Air Canada which primarily centered around operational efficiency issues, operating cost …show more content…

This proved successful in aiding their growth strategy. However, Air Canada still had to complete with strong, growing airlines in the domestic, US and International markets. While their vision was to build customer loyalty through passion and innovation, cost reduction was a critical issue. Fuel was the most significant cost to Air Canada, but with no control over fuel prices, they focused their cost reduction efforts on costs in all other areas of the business. Air Canada implemented the Cost Transformation Program (CTP) to change its cost structure and seeking cost reductions throughout the enterprise as a means of becoming more competitive with the low pricing structures of low cost carriers. The CTP focused on operational process improvements, supplier contract renegotiations and revenue optimization (Karimi-Alaghehband and Rivard, 2014, p. 2). These three3 focus areas required technology innovation and realignment of technology

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