What’s Air Canada Business Model?
Air Canada provides domestic and international carrier services. The Company provides scheduled and charter air transportation for passengers and cargo. AirCanada services Canada, the United States, Europe, Asia, the Middle East, and the Caribbean.
What Air Canada is doing in more details?
Air Canada is the largest provider of scheduled passenger services in the Canadian market, the Canada-US transborder market, and in the international market to and from Canada. It serves more than 190 destinations on six continents, primarily in Canada and the US.
The carrier operates a fleet of nearly 170 aircrafts 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 Airlines and Lufthansa.
Besides its passenger business, which generates the majority of sales with some 75%, Air Canada also hauls cargo and offers ground handling and travel arrangement services. Over 35% of its passenger revenue comes from its domestic operations.
Where Air Canada is Operating?
Passenger revenue (some 75% of the company’s total revenue) and Cargo revenue (around 15%) are recognized when transportation is provided, it also includes revenue, fees, and surcharges from passenger-related services such as excess baggage and seat selection.
Other revenue, (nearly 10%) is comprised of revenues from the sale of the ground portion of vacation packages, ground handling services, onboard sales, and loyalty programs.
Where is the geographical reach of Air Canada?
Headquartered in Quebec, Air Canada has an average of about 555 daily scheduled flights to over 190 direct destinations on six continents, comprised of around 60 Canadian destinations, some 50 destinations in the United States and a total of approximately 80 international destinations.
The company generated over 35% of passenger revenues in Canada, the Atlantic has around 20%, while US transborder and the Pacific accounts for the rest.
What is Air Canada’s Sales and Marketing Strategy?
The company offers the Aeroplan program, which is s Canada’s premier travel loyalty program. The Aeroplan program allows individuals to enroll as members and accumulate Aeroplan points through travel on Air Canada and select partners, as well as through the purchase of products and services from participating partners and suppliers.
What is Air Canada Financial Performance?
The company’s revenue decreased by C$13.3 billion to C$5.8 billion in 2020 from C$19.1 billion in 2019.
The company had a net loss C$4.6 billion in 2020 compared to a net income of C$1.5 billion in 2019.
Cash held by the company at the end of fiscal 2020 increased to C$3.7 billion. Financing activities generated C$4.7 billion while operating and financing activities were C$2.4 billion and C$733 million, respectively.
What is Air Canada Future Strategy?
Air Canada’s strategy for dealing with COVID-19 has been two-pronged. First, the company’ aimed was to mitigate the worst effects, particularly by implementing stringent safety measures for customers and employees and by ensuring it had sufficient financial resources to withstand a prolonged downturn.
Second, the company was also determined to have in place all the necessary elements to recover quickly in a radically different, post-pandemic aviation environment.
Air Canada’s vision for its recovery is predicated on leveraging the solid foundations it has built over the past several years to restore and rebuild towards its global champion ambition.
This involves rebuilding a strong global network with a focus on the hub to hub flying providing seamless connectivity with Air Canada’s partners, delivering consistent and superior customer service and diversifying the revenue base, including through Aeroplan and Air Canada Cargo.
Seeking and implementing measures to reduce costs and increase revenues remain key priorities.