Market / Industry Analysis The NAICS code for Air Canada is 48111, which stands for Scheduled air transportation. The International Air Transport Association (IATA) is the global trade association for the airline industry. It focuses on representing, leading, and serving the whole airline industry. Air Canada and Air China are both the members of The International Air Transport Association, which means they all have the same value and put passengers’ safety on priority. Also, ITAT supports these airlines to help them reduce carbon dioxide emissions by promoting the Carbon Offset Program among them. ITAT is also a great platform for all airlines around the world to corporate and become partners. According to SME Benchmarking, there are 260 companies …show more content…
43.1% of sales in Scheduled Air Transportation are Scheduled international passengers, which is the largest portion of the whole industry, and 26.6% of it are Scheduled domestic passengers. Since Air Canada is the largest airline of Canada that provide services for both international passengers and domestic passengers. The majority of its revenue comes from international passengers on long-haul flight. The industry’s international passenger segment has been growing at a rapid pace in the past years. Being one of the major carriers, Air Canada gets the most volume, and 42.6% market share in the whole industry. The Scheduled Air Transportation industry is expected to continue growing for the next few years. The major market segmentations in the industry are consumers and business travelers. Consumers who travel for a vacation, to visit family members are estimated to be 76% of total industry revenue. For business travelers, they account for about 17% of industry revenue since they often choose to pay for first class or premium economy for their seats. However, the competition in the Scheduled Air …show more content…
In 2013, air transportation made 23,104.8 million CAD sales, and other transportation includes bus, ferry, rail, and cruise only made 3248.7 million. It is easy to see that consumers prefer taking airplanes than other transportation when going for a trip. From the data provide by PMB Product Data, 17.7% of Canadian above 12 years old will choose Air Canada compared to other airlines. People from Edmonton are 103% more likely to choose Air Canada than average Canadian while people from Montreal are 17% less more likely to choose Air
WestJet is the second-largest carrier in Canada, which mainly focuses on economic airlines. In decades past, WestJet expanded its destination network form all western Canadian cities to international scope. During this development period, IT played a important role. For example, electronic ticket is used in the airline reservation system. However, some IT-related issues also hinders the company’s development.
As shown in Table 4, (Appendix 2)29 WestJet directly compete with Air Canada and throughout the years constantly increased the market share30. For WestJet to realise the plan “Be a top 5 global airline by 2016,” is to have challenging competition on the international level.31 Table 4 (Appendix 3) is market share/revenue analysis as of mid of 2013 (CAPA, 2014).32
International passenger traffic to and from Australia in December 2103 was carried by forty-eight international airlines that were in operation in that month, offering seats to over three million passengers. The number of realised passengers represents a growth of 7.8% over the number of booked seats in December 2012 (BITRE, 2014). Passenger utilisation however is on the decline, with December 2013 passenger utilisation being 80.2%, a fall from 82.4% at the same time the previous year (BITRE, 2014).
With the growth of globalization, countries, cities and people are more connected than ever. With the advance in aviation technology, travelling by plane has increased dramatically over the past few years. The Greater Toronto Area in Ontario is home to some six million people and has welcomed an additional two million in international travelers during the first quarter of 2015 (Canadian Tourism Commission). A large percentage of travelers entering and exiting the GTA will travel through the Toronto Pearson International airport, Canada’s busiest airport, servicing 41 million travelers (an increase of 6.4% from the previous year) and 440
Air Canada is focused on attracting most share of sixth freedom traffic of United States to their three major Canadian hubs, that is, Toronto, Vancouver and Montreal. The company targets to change these hubs into the larger transfer points for global travellers crossing Canada. This strategy is generating huge revenues for the company. Air Canada is becoming, the most powerful and effective airline in the global airline market.
Government regulations have a big impact on how the Airline Industry works, besides the strict policies and regulation Airlines must follow; Airlines are also entitled to large airport taxes including the cost for security changes, airport rent, and fuel excise taxes. The example in the article illustrated the regulatory Airport tax that Canada charges Air Canada to land on a Canadian Airport is much more than in comparison to if that plane was to land in America. Being a Canadian based company (with hubs in Canada) Air Canada must follow these regulations and it does cost them at a disadvantage.
The airline industry has long attempted to segment the air travel market in order to effectively target its constituents. The classic airline model consists of First Class, Business Class and Economy, and the demographics that make up the classes have both similarities and differences to the other classes. For instance there may be similarities between business class travellers on a particular flight, but they will not all be travelling for the same reason. An almost-universal characteristic of air travel is that customers do not fly for the sake of flying; the destination is the important element and the travel is a by-product, a means-to-an-end that involves the necessity of an aircraft that gets the customer from point A to point B. Because the reasons can differ greatly in the motivations for a customer wanting to fly, it can be difficult to divide the market into discrete segments, that is, there is always going to be overlap in the preferences and characteristics of any given segment. With that in mind, the commonalities that are shared between the clientele that make up the respective classes can easily withstand analysis.
1. Issues 2. American Airlines’ objectives 3. The airline industry 4. Market 5. Consumer needs 6. Brand image 7. Distribution system 8. Pricing 9. Marketing related strategies 10. Assumptions and risks
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.
This pursuit created unique challenges for Air Canada which primarily centered around operational efficiency issues, operating cost
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).
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
Airline of choice: Remain the top choice for international flights for premium customers as well a...
Within the airline industry currently the airlines can be divided into low cost airlines and full service airlines. The low cost airlines targets customers that are seeking no frills connectivity between cities at low ticket prices. The full service airlines provide several add-ons like free meals, on plane entertainment, and communication facilities. The target market for full service airlines are customers who are willing to spend extra for the services that the airlines provides.
Air Canada today is the largest full-service airline and the largest provider of scheduled passenger services in the Canadian and International market with 178 destinations worldwide. Air Canada involves in the international market to and from Canada. Air Canada has interesting story behind its journey to be one of the most successful airline company in the world. The company was born with the name of Trans-Canada Air Lines (TCA) about 78 years ago on April 10, 1937. Its main objective is to connect the young countries such as Canada by air service. From its founding year on 1937, twelve years later, in 1959, the government was surprisingly fully owned the TCA company and complete the monopoly on all of Canadian domestic air routes which is very crucial for the company at that time; in 1964 government make a crucial decision once again by changing the name from TCA into Air Canada, they had all the monopoly on all Air Canada International routes until 1967. At the same year, Canadian government continued make its regulations flexible and allowed CP Air to flights more than one time per day and, by 1970, CP Air was given access to gain 25% of the intercontinental traffic in Canada. At the 1980s,