Air Canada maintains several defined benefit pension plans, including domestic registered pension plans, supplemental pension plans and international pension plans. Air Canada’s pension funding obligations may vary significantly based on a wide variety of factors. Any changes to these factors may result in an increase in Air Canada’s obligations. Besides, deteriorating economic conditions or a prolonged period of low or decreasing interest rates may result in significant increases in Air Canada’s funding obligations, which could result in a huge adverse effect on Air Canada`s business. Underfunded pension plans, failure or inability by Air Canada to make required cash contributions to its registered pension plans will harm Air Canada`s …show more content…
In section 9.8, MD&A provides more detailed information on above mentioned issue.
Current legal proceedings
Air Canada is involved in or may be subject to legal proceedings which could negatively impact the company`s operations. Recently, Air Canada was involved in investigations by competition authorities relating to Air Canada Cargo division and mandatory retirement issues. MD&A explains the details of the court proceedings.
External risks
Fuel cost, airport user and air navigation fees, foreign exchange, Aeroplan, Star Alliance, key suppliers, regional carriers, economic and geopolitical conditions, competition.
Fuel cost
Cost of fuel is also one of Air Canada’s largest operation costs items. Fuel prices have and may continue to fluctuate widely depending on many factors and, therefore Air Canada cannot accurately predict fuel prices. Due to the competitive nature of the airline industry, Air Canada may not be able to pass an increase in fuel prices to its customers by increasing its fares. In addition, Air Canada may be unable to appropriately or sufficiently hedge the risks associated with fluctuations in fuel prices. Furthermore, the impact of lower jet fuel prices could be offset by increased price competition, resulting in decreased revenues. Significant fluctuations in fuel prices could have a potential negative effect on Air Canada.
Foreign
Air Canada has been in the business of air transport for an extended period of time. Due to the experience and the exposure of the carrier in the field, it has made a commendable progress through many strategies as well as customer proximity. One of the approaches taken by the airline involves the identification as well as an implementation of cost reduction initiatives in a bid to increase revenue from its operations (Air Canada, 2016). It is also attempting to connect with the existing carriers across the world to connect the current customers to the international world. This approach has been adopted to increase its competitive advantage over other existing airlines.
However, despite the correct decision to privatize, the company continued to have troubles. The financials of the newly privatized airline were unreflective of the successful stock offerings. “Air Canada reported losses of C$74 million in 1990 and C$218 million in 1991, and it reported that it had nearly two million fewer passengers in 1991 than in the previous year.” These failures were blamed on the effects of the economic recession and the decrease in travel due to the war in the Persian Gulf. However, it was clear that competition with international carriers was a major cause. To elaborate, the airline industry is considered to be a cyclical industry, meaning that it is directly affected by the business cycle. As such, during times of
WestJet develop their IT operation early and force them get the lead in the aviation businesses. However, as the global economic and the change of people’s demand, the strategic plan of WestJet need to be change to follow the change of the world. Compare with other aviation business, the IT structure of WestJet is small and keeps running on their pervious operation before Smith join into the organization. There are some risks coming out if WestJet continue these IT operations.
Canadian based airline may find it hard to find strong support from US and International customers
For instance, Canada's federal government has delegated the responsibility for airports to local authorities. As a result, many Canadian airports have transformed into brighter, cleaner, and more modern facilities that have become more expensive to operate 3. Canada’s airports have spent more than $9.5 billion on improvements since 19922. According to the CEO of Transat A.T. Inc, “it costs three times as much for an airline to land in Pearson Airport in Toronto as at Charles-de-Gaulle in Paris” 2. Such high landing fees have made Pearson and other major Canadian airports less desirable landing destinations; increasing costs for airlines, and as a result, often increasing prices for consumers. Pearson Airport is West Jet’s “second-largest hub and main connection point in Eastern Canada” and almost half of its destinations are to Canadian airports2, Such high costs of landing in major Canadian cities require that WestJet finds more ways to cut costs and remain the cost leader in its industry.
"In 2014, Air Canada achieved its best full year financial performance in the Corporation 's 77-year history," said Calin Rovinescu, President and Chief Executive Officer. (Air Canada Website CIO 2015) Adjusted net income was $531 million, representing an increase of 56.2 per cent year-over-year.” The purpose of this paper is to examine how Air Canada in 2011 successfully aligned their business strategy and Information Technology (IT) by managing information resources on several levels to accomplish a competitive advantage over other airline carriers and gain the attention of their customers through innovation. Finally, this paper will address suggestions to achieve better Business-IT alignment to meet Air Canada’s goals for the future and continued success.
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 arranges a proactive strategic procurement plan to obtain different goods and services that are vital and fundamental for company growth. These strategies are based on analysis of their historical spending and on educated forecasting of requirements and opportunities. Air Canada is able to create and improve important relationships with key strategical suppliers due to their pronounced buying volume allowing them to acquire greater leverage.
This was evident with the purchase of Canadian Airlines, in 1999 (The National, 2003). With the purchase of this airline, Air Canada also inherited their estimated eight billion dollar debt (The National, 2003). Also inherited from the merger, were underappreciated employees and under trained employees who lacked morale (The National, 2003). In 2003, Air Canada filed for bankruptcy (The National, 2003), this was due to the large financial deficit, the economy and the underappreciated/paid employees. Although, this was a difficult time for the airline, this truly marked the change in how the airline is structured. In 2005, it marked the true return of Air Canada, they reached record breaking revenues and far exceeded anyone’s expectation, including their own. Currently Air Canada, is the largest Canadian Airline, which has a lot to do with their change in business strategy.
Air Canada is Canada 's largest full-service airline and the largest provider of scheduled passenger services in the Canadian market, the Canada-U.S. trans-border market and in the international market to and from Canada. In 2010, Air Canada improved its reputation as one of the world’s leading international air carriers. Significant progress was made on executing and delivering on its four key priorities and this, coupled with improving economic conditions, allowed Air Canada to record operating income of $407 million in 2010, a $677 million improvement from 2009. Air Canada’s financial strategy is to continue to improve both the level and sustainability of its
This paper will review the case study of Delta Airlines which was suffering like all its competitors with rising fuel costs which averaged anywhere between 30 to 50 percent of its total operating costs. This paper will answer six questions which will help identify what the company did to handle the high cost of fuel. The questions that I will answer will include the following.
There are some barriers or weaknesses common to most interventions that target addictive behaviors in the community. Heterogeneity in the population and cultural barriers has contributed to the lack of knowledge regarding substance use and its effects. Issues related to taboo, denial and loss of face mask understanding of the extent of the problem. Institutional barriers and lack of community infrastructure make treatment efforts difficult in serving a diverse population (Ja, 1993). In addition to the psychological barriers, other physical problems also exist. Most primary care physicians do not feel competent to treat alcohol and drug related disorders. Physicians generally do not like to work with patients with these disorders and do not find treating them rewarding. There is substantial evidence that physicians fail even to identify a large percentage of patients with these disorders (Miller, Sheppard, Colenda, & Magen, 2001). Financial barriers include inability to access treatment services by addicted individuals as indicated in various studies. There is also a competition for resources that has to be considered. Local governments allocate some part of their funding for specific issues and there is a competition among several stakeholders to ensure that their cause is represented. Research shows that prevention programs in the community on the issues of substance abuse, risky sexual behavior, school failure, juvenile delinquency and violence have to be
Colin Rovinescu, the Chief Executive Officer (CEO), for Air Canada was reviewing the Risk Management program of the company because the scheduled board meeting was approaching soon. He needed to deliver a comprehensive presentation in front of the board members.
The gothic narrative and concepts of psychoanalysis are often linked in literature as psychoanalysis can create a space for tales and themes on which the gothic plays. One trope of psychoanalysis in the uncanny. The Merriam-Webster Dictionary defines uncanny as: fearfully and mysteriously strange or fantastic (“Uncanny”). In 1919, Sigmund Freud published “The Uncanny,” making Freud one of the first theorists behind this feeling of unfamiliar familiarity. Freud uses Jentsch’s definition of the uncanny, and “he ascribes the essential factor in the production of the feeling of uncanniness to intellectual uncertainty; so that the uncanny would always be that in which one does not know where one is, as it were” (Freud, 154). Edgar Allen Poe’s short story, The Fall of the House of Usher, provides its readers a glimpse into how the uncanny is exemplified in the American Gothic. Poe creates a tale of two reunited school fellows, catalepsy, and a home that is bewitching in its deterioration that leaves the reader in uncertainty. The uncanny is depicted through the narrator’s mixing of pleasure and displeasure in the tension between his conscious and unconscious, Roderick Usher’s epitomization of “the double,” and Madeline Usher’s living death.
Flanders’ article on prostitution in Victorian London focuses on the misinformation and misconceptions surrounding sex-workers of that era, especially focusing on how unreliable the numbers involved can be. She approaches the topic with three main arguments in mind: the supposed amount of prostitutes and the evolution of what defines a prostitute, how women are frequently mistaken for prostitutes based upon their appearance, and the often looked-over presence of male prostitutes. Within her article she presents multiple primary sources including: diary entries discussing encounters with prostitutes, letters detailing how women were leered at and the public’s response to such incidents, and even some authors. It is when she first introduces her argument as a whole that she discusses the questionability of the reported number of prostitutes in Victorian London.