The External Environment
Competitor analysis
Air Canada has four competitors. They comprise WestJet, United Airlines, Lufthansa and American Airlines. Calin Rovinescu, the CEO is rated at 80% taking the 1st position. The CEOs of United Airlines and WestJet have a rating of 73%. The CEO of United Airlines takes the second position as his rating is from 173 employees while that of WestJet is from 28 employees. In form of quality of products, Air Canada takes the 2nd position due to a score of 3.7 out of 5 by 11 clients (Leppäjärvi,2018). WestJet takes the first position with a score of 4 out of 5. In form of a net promotion score, Air Canada takes the first position. It is ranked at 67% by 12 customers. Net promotion tracks the score of customers based on how likely they can refer a friend to a particular company. In net promotion, American Airlines takes the 2nd position with 26%. In pricing, Air Canada takes the first position with a score of 4.3 out of 5. The second position is taken by WestJet which has 3.7 out of 5. In form of its service to customers, Air Canada is ranked at 1st position with a score of 4.2 out of 5. WestJet takes the 2nd position with a score of 3.9. The performance of Air Canada can also be assessed from culture scores. Culture scores are attained from all the questions answered relating to a company in comparison to competitors. Air Canada takes the first position in culture score with an 86% score. The 2nd position is taken by WestJet with 75%. In form of employee net promotion, Air Canada takes the 1st position with a score of 67% followed by United Airlines which takes the 2nd position with a score of 15 percent. Employee net promotion involves scoring employees based on how employees are likely to refer a friend to work in a certain company.
Air Canada offers less expensive and the best premium products. It also offers the correct transit programs at critical airports. These make Air Canada suitable to attract transit customers. The firm has a subsequent worldwide champion and core elements which comprise expense reductions, profitable revenue initiatives, enabling product differentiation and cultural change. The company has enhanced effective operation with leisure customers traveling to and from Canada. These investing strategies have made the airline gain a competitive advantage.
Market analysis
Air Canada carries many passengers each year. Income elasticity in Air Canada is less than 1. Barriers to entry in Canadian Airlines are very high. The wide geographical region and sparse population have a very low demand for flights. The high fees and taxes of Canada reduce the competition of prices (Case & Jones,2018). This makes Air Canada capable of pricing new clients from the aviation market. Everchanging seasonal demand further makes it hard for new firms to survive in the market. Air Canada became the first airline to ban smoking on any flights. This has ever led to free socialization during flights. In Air Canada, the risks and opportunities are external factors. As per SWOT analysis, the risks comprise government restrictions, foreign currency fluctuations and low-cost carriers. Its opportunities comprise flourishing tourism in Canada, the launch of low-cost airlines and great penetration into the worldwide market by worldwide brand understanding.
Environmental analysis
The regulation put in place by the Canadian government requires Air Canada to follow all set Covid-19 guidelines. This has made Air Canada incur losses as some people planning to travel for leisure have ended up canceling their travel plans. The firm has lost a lot of money which could have been got in the present. Fluctuation of currency and ongoing inflation have made Air Canada plan to raise fares to offset the ongoing inflation(Shi & Li,2021). This will make the company lose some customers who cannot comprehend the impact of inflation and how it can be canceled. Air Canada is impacted by various political factors such as high fees, high taxes and substantial restrictions on foreign ownership of Canadian airlines. These political factors make it hard to start an airline in Canada. Rogue provides unique culture to customers. The end of smoking welcomed customers from different beliefs. Christianity is against smoking.
Findings
From the assessments, Air Canada leads in almost all aspects. It leads in CEO score, net promotion, pricing, customer service, culture score and employee promotion. It is only defeated by WestJet in product quality but the difference between the two is just 0.3. WestJet has 4 out of 5 whereas Air Canada has a ranking of 3.7 out of 5. This means Air Canada is far more successful in form of its performance when compared to competitors. It leads in all aspects apart from product quality. Even in product quality, it is surpassed by only 0.3. Government regulation and currency fluctuation are key issues as it is found in risks and economic determinants facing the company.
References
Leppäjärvi, P. (2018). Competitor analysis: Airlines’ leisure travel products from the
frequent flyer’s perspective.
Case, B., & Jones, O. (2018). Country of Origin branding: The Case of Air Canada.
Shi, Y., & Li, X. (2021). Determinants of financial distress in the European air transport
industry: The moderating effect of being a flag-carrier. Plos one, 16(11),
e0259149.
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