The skies above Canada are vast, and Air Canada has little problem filling them. As the country's leading airline, Air Canada serves about 178 destinations, primarily in Canada and the US but also in the Asia/Pacific region and Europe. Together with regional affiliate Jazz, the carrier operates a fleet of about 330 aircraft from hubs in Calgary, Montreal, Toronto, and Vancouver. It extends its network as part of the Star Alliance global marketing group, which is led by United Continental and Lufthansa. (The alliance allows the airlines to sell tickets on one another's flights.) Besides its passenger business, Air Canada also hauls cargo and offers ground handling and travel arrangement services.
Like other major airlines, Air Canada -- which has more than a 50% market share in Canada -- has been unable to avoid the effects that the turbulent global economy and high fuel prices have had on the industry. After weathering flat revenues and profit losses in 2008 and 2009, the company bounced back in 2010 as the economy improved and certain cost-cutting measures (such as scaling back its flight capacity and workforce) bumped the company's profits into the black.
Looking ahead, Air Canada has been pursuing a multi-faceted growth strategy designed to generate revenue from new and existing sources and reduce personnel expenses. The company has been aggressively investing in technologies that enhance services to customers, including creating a Web-based reservation system and self-service check-in and adding entertainment systems to seatbacks and in-flight wireless Internet services (for a fee). It has also been bolstering its capacity to international destinations in the US, Europe, and Asia. (In Asia, it is focused in large part on China, which has eased its travel restrictions to destinations in Canada and promises an increase in Chinese tourism.) The airline also leverages its membership in the Star Alliance, which extends its network of destinations to 1,160 airports in 181 countries.
Additionally, Air Canada is looking to boost its US-Canada trans-border flights through a recent agreement with United Continental. The companies are planning to form a joint venture, due to take off in late 2011, that will add key routes between US and Canadian destinations. The JV has hit some snags along the way, however, as watchdog groups and major competitors like WestJet claim the JV will have an unfair competitive advantage along many US-Canada trans-border routes.
Its agreement with United Continental isn't the only challenging growth initiative the airline faces. Air Canada is also seeking to form a discount airline that will compete with other discount carriers in North America. But before the carrier can commence operations, it must clear regulatory hurdles and gain approval from resistant pilot and flight attendant unions. Reluctance from unions to sign on to the carrier revolves around the lower-than-average wages offered to the carrier's prospective pilots and flight attendants.
Air Canada is working on making changes to other areas of its business, including its regional travel operations. While long-time affiliate Jazz is the primary operator of its regional fleet, recent changes to Jazz, including taking on a new parent, Chorus Aviation, have left Air Canada looking to bring in other affiliates. One concern for Air Canada centers on Chorus Aviation's partnership with Thomas Cook Canada; the partnership operates several routes (mostly seasonal flights to warm vacation destinations) that compete directly with Air Canada. – less
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