AIR CANADA AIRLINES.

BACKGROUND.
Air Canada is the flag carrier airline of Canada, founded in 1936. The airline operates flights to over 200
destinations globally, with its main hub located at Toronto Pearson International Airport. Air Canada is a
founding member of the Star Alliance, the world's largest airline alliance. The airline has a diverse fleet of
aircraft, including Boeing and Airbus models.
Source:
Air Canada official website: https://www.aircanada.com/ca/en/aco/home/about/our-company/history.html
Star Alliance official website: https://www.staralliance.com/en/about-us/history/
Reference:
Air Canada. (n.d.). Our Company. Retrieved January 31, 2023, from
https://www.aircanada.com/ca/en/aco/home/about/our-company/history.html
Star Alliance. (n.d.). History. Retrieved January 31, 2023, from https://www.staralliance.com/en/about-
us/history/

PESTLE ANALYSIS OF AIR CANADA AIRLINES.

PESTLE analysis is a framework for evaluating external factors that impact an organization. Here is a
PESTLE analysis of Air Canada in recent 3 years based on publicly available information:
 Political:
Air Canada operates in a regulated industry and is subject to government regulations on safety,
security, and environmental issues.
The airline is impacted by trade agreements, tariffs, and taxes imposed by different countries.
 Economic:
Air Canada has been impacted by the COVID-19 pandemic, resulting in decreased demand for air
travel and significant financial losses.
The airline has also been impacted by fluctuating fuel prices, which can impact operating costs.
 Social:
Changing consumer preferences and shifting demographics can impact Air Canada's customer
base and revenue.
There is increasing public concern about the environmental impact of air travel, which could
impact the demand for air travel in the future.
 Technological:
Air Canada is investing in technology to enhance the customer experience and streamline
operations, such as implementing a new reservation system and investing in digital capabilities.
The airline is also investing in alternative fuels and technology to reduce emissions and meet
environmental targets.
 Legal:
 Air Canada is subject to laws and regulations related to air travel, including those related to
safety, security, and the environment.
The airline is also subject to employment laws and regulations related to worker rights and
compensation.
 Environmental:
Air Canada is facing increasing pressure to reduce emissions and improve sustainability,
including through investment in alternative fuels and technology.
The airline is also impacted by environmental events such as natural disasters, which can disrupt
operations.
References:
"Air Canada Announces Fourth Quarter and Full Year 2020 Results". Air Canada, 2021.
https://www.newswire.ca/news-releases/air-canada-announces-fourth-quarter-and-full-year-2020-results-
836173845.html
"Air Canada announces major investment in new technology to enhance the customer experience". Air
Canada, 2021. https://www.newswire.ca/news-releases/air-canada-announces-major-investment-in-new-
technology-to-enhance-the-customer-experience-836631115.html
"Air Canada announces new environmental targets and sustainable aviation fuel purchase agreement". Air
Canada, 2021. https://www.newswire.ca/news-releases/air-canada-announces-new-environmental-targets-
and-sustainable-aviation-fuel-purchase-agreement-836917585.html

FORCE MODEL OF AIR CANADA AIRLINES.

 Competitive Rivalry: The competitive rivalry in the airline industry has increased in recent years
due to the rise of low-cost carriers and increased competition from international airlines.
 Threat of New Entrants: The threat of new entrants remains relatively low in the airline industry
due to the high barriers to entry, such as the cost of aircraft, operational infrastructure, and
regulatory compliance.
 Bargaining Power of Suppliers: The bargaining power of suppliers has increased in recent years
due to the consolidation of aircraft manufacturers, leading to fewer suppliers in the market and
higher prices for aircraft.
 Bargaining Power of Buyers: The bargaining power of buyers has increased in recent years due to
the rise of low-cost carriers and the increasing availability of low-cost airfare options.
 Threat of Substitute Products: The threat of substitute products has increased in recent years due
to the growth of alternative modes of transportation, such as high-speed rail, as well as the
increasing popularity of online travel booking platforms.

SWOT ANALYSIS OF AIR CANADA AIRLINES.

Strengths.
Strong brand recognition and reputation as the flag carrier of Canada.
Diversified route network with a presence in both domestic and international markets.
Partnership with major global airlines through the Star Alliance network, providing expanded reach and
connectivity for customers.
Investments in modernizing the fleet and technology to enhance the passenger experience.
Weaknesses:
Dependence on a single market (Canada) makes the airline vulnerable to economic and political
instability in the country.
High operational costs, including fuel and labor expenses, compared to some of its low-cost competitors.
Strained labor relations leading to strikes and disruptions to flight schedules.
Opportunities:
Growing demand for air travel, particularly in Asia-Pacific markets.
Expansion into new markets and routes to increase revenue and market share.
Increased use of technology to drive efficiency and improve customer experience.
Threats:
Intense competition from low-cost carriers, traditional legacy airlines, and new entrants.
Economic and political uncertainties, including fluctuating fuel prices, trade restrictions, and pandemic-
related disruptions.
Climate change concerns and regulations requiring significant investment in sustainable aviation
practices.
Sources:
Air Canada Annual Report 2020
"Air Canada SWOT Analysis." Marketline, March 2021.
"Air Canada - SWOT Analysis." SWOT & PESTLE, December 2022.