Air Canada Porter's 5 Forces

Air Canada’s mission was to connect Canada and the world. For this it followed an international growth strategy. Making partnerships with Lufthansa and united/continental, helped its growth strategy and connection mission. To reach the goals it followed a strategy involving engaging with customers, mainly focusing on passengers and products.

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.

“Air Canada is one of 99 airlines based in Canada; it is the largest domestic and international airline. It is among the top 20 airlines and together with it’s partner’s Air Canada express regional and Air Canada rouge, Air Canada attends over 38 million passengers annually and flies to more than 190 destinations on five continents” (Air Canada). It serves 60 Canadian cities, 49 destinations in the United States of America and 73 cities in Europe, the Middle East, Asia, Australia, the Caribbean, Mexico and South America, it flies to most cities using codeshares with airlines such as: Etihad Airways, Lufthansa, Singapore Airlines, Ethiopian Airlines, etc. Air Canada is one of the founding members of “Star Alliance”, the world’s largest and

Westjet Airlines has achieved considerable success in the past few years, winning estimable rewards related to its service, gaining loyal customers and, of course, increasing market shares. It devotes to a “high-value, low-fare airline” which provides humanized services to customers. Another pride of Westjet is its IT, which designs all systems in-house and is operated based on the business demands.

Air Canada said operating its own program will boost its financial performance while allowing it to offer customers better value.

The airline industry history can be broken down into two distinct eras, the regulation era, prior to 1978, and the deregulation era, post 1978. During the regulation era, with fare prices fixed, customer service and extra amenities were the main areas of achieving a competitive advantage. During this era, there were little new entries into the industry, indeed, “not a single new carrier was approved between 138 and

result of this, no other airline in the industry’s history has enjoyed the customer loyalty and

At the start of the twenty first century, JetBlue commenced service “to bring humanity back to air travel and to make flying more enjoyable”. JetBlue offered 75 destinations in the United States for any potential consumers requiring low-cost options for air travel. The replacement cost for consumers regarding the selection of airline travel is low. Providing the greatest value, through either incentives or travel experience, is crucial to how all airline companies conduct business.

The airline industry has exhibited high grow throughout 2016. In 2016, passenger demand grew by 6.3% - above the 5.5% 10-year average annual growth. In North America, demand rose by 2.6%. Alexandre de Juniac, CEO of IATA, said that “air travel was a good news story in 2016. Demand for air travel is still expanding” (“Another Strong Year”, 2017). In the first half of 2017, Juniac’s prediction already came true. In June, the airline market has demonstrated a substantial upward trend. Demand rose by 7.8% with ASK, or ASM, capacity increasing by 6.5% (“Strong Demand Growth”, 2017). Given the expectation of growing demand, the airline industry continues to appear more attractive and

In an attempt to achieve high performances in the competitive economy, the airline industry specializes on the vocational and unrivalled price consideration. Among its long-term strategies that enhance its competitiveness include; high service standards, blanket coverage, market positioning and segmentation, ticket booking, low price considerations, flight connections and safety of the passengers and staff and the overall efficiency in its operations.

According to ATAG, “in 2013, over three billion passengers were carried by the world’s airlines” (Facts & Figures, 2014). This fact demonstrates how the airline industry is a ubiquitous part of our lives. Even if a person has never used an airline for personal transportation, they are still likely to have consumed and/or used an assortment of goods transported by the industry. Still, even with its major impact on the world around it, inside the airline industry, firms must learn to encounter a wide array of external factors that influence their everyday operations and strategies. These factors can come from both the general and local environments that surround the industry. Each of these factors in their own way have an impact on the competitive environment found within the industry.

Airline industry is one of the major transportation systems in Canada because of the total area of the country. Most of the people in Canada prefer to take flights when visiting other provinces because of the distance involved to make the trip and the weather plays an important part of the decision as well. Despite the necessity for air travel, the fares of the airlines are very expensive in Canada and because of these people are opting out.

The growing popularity of LCCs has led many full-service airlines to launch subsidiaries offering flight options with limited services. For example, China Eastern Airlines announced the launch of China United Airlines in July 2014 and in July 2013, Air Canada launched its LCC, Air Canada Rogue.

Due to globalisation, the flow of people is more rapid among the world. The demand for fast and easy transport increases in the past few years, and the passenger airline benefits a lot from the change which becomes a huge and important industry in the globe. Unlike some other industries, passenger airline business actually has target customers all around the world including you and me. There are a few main kind of purposes for taking a flight, for example, business, leisure, students etc. As there is a broad base of customers, different companies are set to target different customers group, such as Ryanair and Easyjet targeting the budget customer group and Singapore Airlines aiming for the high-end business and leisure customer group. The basic inputs of airline business are fuel, labour and aircraft leasing and others such as food and entertainment vary between companies. The outputs are the flight itself and the services provided in the journey.

The airline industry exists in an intensely competitive market. In recent years, there has been an industry-wide shakedown, which will have far-reaching effects on the industry 's trend towards expanding domestic and international services. In the past, the airline industry was at least partly government owned.