Air Canada - Risk Management
Air Canada – Risk Management
Case Report
Industry Overview The airline industry is one of the largest global industries in the world. Airline companies in the airline industry have gone through challenging obstacles in the past decade. Many changes have occurred within the industry and increased regulations have driven up cost for the industry. The attacks on 9/11 left the industry in shock when planes were used in terrorist attacks in the United States. These attacks changed the mentality of the industry and shifted the focus towards safety. Safety was also a major concern in the industry with the breakout of SARS in 2003 and the H1N1 flu in 2009. The airlines had to ensure that public health and safety of the travelers were their main priority. Safety comes at a big price for the industry since a breach in safety can affect the reputation of the company and industry. Mergers and consolidations were a key to the survival of the airline industry in recent history. The United Airlines and Continental Airlines merger created the world’s largest airline in 2010. After decades of misery for airline passengers, employees and shareholders alike, the proposed United-Continental merger offers an opportunity to rethink long-held assumptions about what the industry needs. The airline industry has lacked the kind of stability necessary to make long-term investments and long-term decisions necessary to serve fliers. It operates in an environment where a seat on a plane has become a commodity for which people will generally pay the lowest price to any airline they think will get them to their destination alive. Letting the number of legacy carriers shrink to a sustainable level of as few as three healthy ones might be the best way to ensure that fliers can get services they have lacked for so long. In the long run, fliers might be better off with fewer, stronger carriers rather than a bunch of small sickly ones. In the United States, many low cost carriers are
Case Report
Industry Overview The airline industry is one of the largest global industries in the world. Airline companies in the airline industry have gone through challenging obstacles in the past decade. Many changes have occurred within the industry and increased regulations have driven up cost for the industry. The attacks on 9/11 left the industry in shock when planes were used in terrorist attacks in the United States. These attacks changed the mentality of the industry and shifted the focus towards safety. Safety was also a major concern in the industry with the breakout of SARS in 2003 and the H1N1 flu in 2009. The airlines had to ensure that public health and safety of the travelers were their main priority. Safety comes at a big price for the industry since a breach in safety can affect the reputation of the company and industry. Mergers and consolidations were a key to the survival of the airline industry in recent history. The United Airlines and Continental Airlines merger created the world’s largest airline in 2010. After decades of misery for airline passengers, employees and shareholders alike, the proposed United-Continental merger offers an opportunity to rethink long-held assumptions about what the industry needs. The airline industry has lacked the kind of stability necessary to make long-term investments and long-term decisions necessary to serve fliers. It operates in an environment where a seat on a plane has become a commodity for which people will generally pay the lowest price to any airline they think will get them to their destination alive. Letting the number of legacy carriers shrink to a sustainable level of as few as three healthy ones might be the best way to ensure that fliers can get services they have lacked for so long. In the long run, fliers might be better off with fewer, stronger carriers rather than a bunch of small sickly ones. In the United States, many low cost carriers are