BUSINESS ENVIRONMENT

Q1) BACKGROUND Air Canada is the largest airline in Canada by fleet size and passengers carried with its headquarters in Montreal, Quebec. Canada’s public carrier started with the Canadian Central government’s 1936 formation of Trans-Canada Air Lines (TCA), which started working its first cross-country flight courses in 1938. In 1965 TCA was renamed Air Canada. The airline was privatized in 1988. VISION STATEMENT “To be the best airlines in the whole world and providing excellent customer experience in our flight with full entertainment and loads of satisfaction” HR STRATEGY Air Canada’s objective is to improve customer relations which can be achieved through employee engagement. The company’s employment policy involves constant employee learning and training. Pre pandemic, Air Canada heavily relied on their brand name. They never felt the need for promoting opportunities in the market. With the outbreak of covid 19, the company had to revise its strategy As the passenger demand increased after the pandemic, the need to staff up quickly was essential for the company to maintain the brand name and retain the customers. To attract the employees into the business, the company strengthened its employee value proposition..

Political and legal factors that impact the airline industry Government interference in economic operations or a specific industry is an example of political and legal considerations. Airlines operate in a highly regulated and constrained political context. To protect passengers' interests and airline operations' safety procedures, government intervention is needed. Regulations and limits relating to international commerce, tax policy, and competition have a significant impact on the aviation business. It's also influenced by events like war, terrorism, and illness outbreaks like Ebola and the Corona Virus. These are political issues. As a result, government involvement is required. ECONOMIC FACTOR A strong economy stimulates industrial development. Various economic indicators are also used to assess the state of the economy. Growth in the gross domestic product (or GDP), per capita income, disposable income, industrial production, commercial activity, and consumer confidence are all examples of economic indicators. Oil price fluctuations are another key element that affects airline profitability. Economic variables such as industrial output and company confidence affect airline passenger and cargo traffic growth..

Social and demographic factors The demand for air travel has risen dramatically in recent years. This suggests that the latest generation's travel tastes are shifting. Demand forecasting and future travel preferences are heavily influenced by demographic variables. The millennial generation, for example, will shape the future of travel and tourism in the United States. 16–34-year-olds make up this generation. Travel spending by retiring baby boomers (those born between 1946 and 1964) is likely to decline. Technological and environmental factors In order to compete in the airline sector, organizations must use cutting-edge technologies. Fuel consumption is reduced due to the usage of sophisticated airplane technologies. This increases airline efficiency while lowering costs. Technology is also one of the four pillars of the International Air Transport Association's (IATA) climate change strategy. Legacy carriers such as Delta (DAL), United (UAL), and American (AAL), as well as low-cost carriers such as Southwest (LUV) and JetBlue (JBLU), have all been replacing their outdated aircraft with new fuel-efficient ones..

Q 3 ) Business Environment As a worldwide carrier and as citizens of the world, Air Canada aims to integrate environmental, social, and economic factors coordinated into three maintainability support points i.e., our business, our people, and our planet. COMPETITORS – Air Canada is one of the largest airlines in Canada. In the domestic market, it faces stiff competition from WestJet. When it comes to the international market, Air Canada flies over 98 Countries and regions. It shares codeshare agreements with airlines like Lufthansa, Air New Zealand, United Airlines, etc. Major competitors of Air Canada like Delta Airlines, American Airlines, and Lufthansa are way ahead in the international market as compared to Air Canada but in the near future Air Canada can become one of the leading international airlines in the world as it works with many regional partners under air Canada banner. Air Canada has tapped several opportunities in the market like in 2017 it introduced 30 new routes including 20 new international routes. This way there is a huge possibility that air Canada will surpass its competitors soon..

CUSTOMERS – Air Canada is one of the largest domestic and international flights operating in 6 continents and almost 210 airports and it serves more than 50 million customers every year. The major target customers are the upper-middle class and businessmen with almost 55% of female passengers and 45% males. The secondary target audience of Air Canada is travelers who travel for leisure purposes. Air Canada attracts its secondary target audience through the medium of Air Canada’s Facebook and Instagram pages. Soon, it is expected that 20% more customers would be flying with Air Canada. The Facebook engagement rate has increased by 30 %. The campaigns that promote Air Canada’s app usage are targeted to increase by 40 % in the coming years. SENIOR MANAGEMENT AND EMPLOYEES – Air Canada has evaluated one of Canada’s top diverse employers throughout the previous 6 years. Air Canada believes that its prosperity is because of the diversity in the work culture. They ensure that customers’ cultural sensitivity is respected. Air Canada promotes a very employee-friendly work culture, and their main concern is regarding their employees’ safety. They offer a wide range of benefits to their employees including healthcare, pension plans, insurance program, and more..

Q 4) 2 scenarios that may play out in the next five years : Most desirable case: Sustainable future Least desirable case: New Frontiers.

Q4) Sustainable future Make sustainability a vital part when onboarding and recruitment. Training programs in place to make sure all employees are aware of their roles and responsibilities, have appropriate knowledge of environmental issues and are competent to undertake tasks that may have significant environmental impacts. Creating model lab for trying out new ideas before releasing them to the greater public ( fuel efficient engines, using virtual reality for sharing the fight precautions and rules to be followed during the travel) . Developing a channel for sharing the results of short-term experiments, sharing lessons learned from their attempts, and determining what’s next. Incentivizing big ideas to encourage creative thinking. Not every big idea will work out, but learning to fail quickly and adapt is important for organizations that want to succeed in the long term. You never know when that big idea will stick and transform your organization..

New Frontiers In order to deal with new frontiers in the market it is important to make customer evaluation in order to know their preferences and update our service accordingly Encouraging employees to suggest on customer preferences most efficiently and effectively, from their experiential standpoint, to look forward for updating. Providing language training to cabin crew members to deepen community relations which can support socio-economic development. Focus scheduling cabin crews based on languages between destination will help to focus on health and wellness, diversity and inclusion of the customers. Ongoing training to all the staffs to provide best passenger satisfaction and keep record of employee performance by assessing them regularly..

Q5) Challenges 1)Sustainable future: Not all employees have enough knowledge about environmental issues and their duties and responsibilities to avoid the issues. Planning ideas for the future is uncertain as it could result in more loss or complications. Strengths- HR team can recruit candidates who are specialized in the field of sustainability to improve the overall work environment. HR teams can help their colleagues adapt their skill sets to fill existing knowledge gaps..

Weaknesses- The employees who are newly recruited may not always agree to others opinion or find it comfortable to work with the colleagues. Not all employees may seem to be interested to learn more about sustainability as they stick to the old generational priorities. 2) New Frontiers(New Entrants)- There is always a new competitor in the market who will provide a similar service which gives the pressure to do better with innovative ideas. The customer’s preference might change and choose the competitor’s service..

Strengths- The HR should recruit candidates who has different views from different firms on improving the current service with their new ideas. HR team should plan on arranging to ask for customer feedback in order to understand what they want in addition to the service provided or what they dislike about it. Weaknesses- The employees of the competitive firm might have a more experienced and talented team. The new employees from the other firm who are recruited may not be trustworthy as they might give out information. The customer preferences change or wish to try different airline to experience something different..