Prepared for Strategic Management at the Schulich School of Business, Toronto Canada. Focused on airline industry and the direct impact of COVID-19.

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2. 2
Presented By:
Akash
Sidhu

3. Agenda
3
Background
External Environment
Internal Environment
Strategy
Recommendation
Intro External Internal Strategy Solution

4. 1937Setting Up
Founded in 1937, HQ in
Montreal, Quebec
1998
TCA Privatized
Trans-Canada airlines
privatized in 1998 after
deregulation of industry

5. 1990s
Hits and Misses
Joined Star Alliance,
reported losses and
restructured
2000s
Turbulence
Economic environment,
acquired rival airline and
filed for bankruptcy
protection

6. Intro External Internal Strategy Solution

7. Optimistic
Pessimistic
Intro External Internal Strategy Solution

8. Optimistic
Pessimistic
Intro External Internal Strategy Solution

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The effect on our industry has been
devastating. What can we do to
rebound and survive?
- Calin Rovinescu
CEO of Air Canada
Intro External Internal Strategy Solution

10. PESTEL Analysis
10
Political Economic Social
Government imposed
travel restrictions;
potential bail-out on the
horizon
Racial unrest in the US
has put pressure on
corporations to invest in
diversity & inclusion
Sluggish economy and
recessionary
environment due to
COVID-19
Intro External Internal Strategy Solution

11. PESTEL Analysis
11
Technological Environmental Legal
Disruptive technology
coming to air transport
with biofuels and
hybrids on the horizon
and better screening
technologies
Lawsuits on the horizon
from angry customers
and severe travel
restrictions nationally
and Atlantic bubble
Increased pressure to
add emission
reduction as part of
post-COVID strategy
Intro External Internal Strategy Solution

12. Porter’s Five Forces
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Rivalry against
competitors: Low
Despite ultra low-
cost carriers
(ULCCs) like
Swoop,
competitiveness
remains low
Capital intensive,
high regulatory
requirements, high
operating costs
(fuel), difficult to
reach economies
of scale of
incumbents
Threat of new
entrants: Low
Consumers only
have a handful of
airline options in
Canada; subject
to high prices
Buying Power of
Buyers: Low
Few aircraft
manufacturers,
labour is
unionized, fuel
providers subject
to volatility in oil
prices
Bargaining Power of
Suppliers: High
Because of
widespread
geography of
Canada, travelers
rely heavily on air
transport
domestically
Threat of Substitute
Products: Low
Intro External Internal Strategy Solution

13. 13
Internal
Analysis
Intro External Internal Strategy Solution

14. Internal Profile – Pre-COVID-19
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Intro External Internal Strategy Solution

15. Business Lines
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1. Air Canada Cargo
2. Air Canada Vacation
3. Air Canada Jetz
4. Air Canada Rouge
5. Air Canada Express
Intro External Internal Strategy Solution

16. Primary Activities
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Inbound – value CDN identity, work mostly
with CDN suppliers
Operations – flying to over 183 destinations
Outbound – 4 major hubs, Toronto Pearson is
largest
Marketing - impactful marketing campaign
such as “Hello/Goodbye” from the 90s and
“You and I were meant to fly” sung by Celine
Dion.
Service - call center, respond through phone
and email to large volume of requests
Intro External Internal Strategy Solution

17. Secondary Activities
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General Administration – ranked best airline
three times consecutively by Skytrax
HR – signed multiple long term agreements
with unions
Tech Development – Amadeus technology,
2D barcode technology, Air Canada
CleanCare+
Procurement – negotiate with suppliers for
various airplane models and recently let go of
Boeing 737-8 and Airbus A220 deliveries
Intro External Internal Strategy Solution

18. VRIO Analysis – Competitive Advantage
18
Valuable Rare Imitate Substitute
Tangible
Resources
Yes No No No
Intangible
Resources
Yes Yes Yes Yes
Organizati
onal
Structure
Yes Yes Yes Yes
Intro External Internal Strategy Solution

19. Financials
Stock Performance
19
Intro External Internal Strategy Solution

20. Financials
Detailed Financials
20
Intro External Internal Strategy Solution

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Strategy
Intro External Internal Strategy Solution

22. Business Level Strategy
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Air Canada will need at minimum three years
to recover to 2019 flying levels
Differentiation – focusing on key groups that
are to fly for essential reasons and keeping
relations with soon to be flyers
Intro External Internal Strategy Solution

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1. Related
2. Unrelated
3. Strategic
Alliances
This strategy, while difficult to
implement is what will ultimately
establish Baldwin as a cornerstone
within the sensor industry. Solidifying
ourselves as market leaders in product
design while simultaneously
maximizing market share, profit and
shareholder returns.
▪ Creating
premium
products in all
market
segments
AirCanadaDiversification
Guiding
Principle:
Work towards
being the leader in
Canada in the
airline industry
and come back
strong.
Intro External Internal Strategy Solution

24. Multidomestic Strategy
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Multidomestic Strategy
- Meeting safety requirements of
international countries
- Providing safety communication
styles for various ethnic groups
- Pet friendly
- Chinese government restricted to
2 Air Canada flights a week
After market rebound transition to
transnational strategy currently
price is not a major factor.
Intro External Internal Strategy Solution

25. Recommendation
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Government
Support
Negotiate
package with
government
Customer
Centric
Refund strategy
Safety
Learn from best
practices of other
airlines
New Revenue
Focus on cargo
and Ecommerce
Intro External Internal Strategy Solution

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This strategy, while difficult to
implement is what will ultimately
establish Baldwin as a cornerstone
within the sensor industry. Solidifying
ourselves as market leaders in product
design while simultaneously
maximizing market share, profit and
shareholder returns.
▪ Creating
premium
products in all
market
segments
Plan A
Mandatory quarantine should be shortened to 48
hours by allowing the rapid COVID-19 test to
showcase that the individual is virus free and able
to fly.
Asking for a large investment from the
government, loosening restrictions and turning
down an equity stake. Air Canada will need to
restore the closed regional routes and bring back
more employees.
For example, Delta Airlines received $5.4 billion
and a $1.6 billion loan
If Alberta trial goes well proof to reduce quarantine
period
Plan B
The worst-case scenario is
that the government will
request several conditions with
an equity stake with little
overall liquidity support. In this
case, Air Canada will most
likely be better off to reject
support.
Intro External Internal Strategy Solution

28. Customer Centric and Safety
- Communication in multiple
languages to inform
customers
- Better customer service by
offering integrated web chat
- Transparency with booking
flights and providing new
flights for cancelations
- British Airways and Lufthansa
received 4-star COIVD-19 safety
rating
- Lufthansa introduced RT-PCR tests
at airports in Frankfurt and Munich
in October
- British Airways and American
airlines trialing free testing through
LetsGetChecked 72 hours under
medical professional supervision in
virtual visit
2. Customer Centric 3. Safety Leader
Intro External Internal Strategy Solution

29. BCG Matrix
29
Question Marks
- Vacation Packages
Stars
- Air Canada Cargo
Dogs
- Low traffic regional routes
Cash Cows
- Vacation Packages
Intro External Internal Strategy Solution

30. Four Prong Strategy - Timeline
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01 02 03 04
Government
Support
Revenue Generation Safety Customer Service
2021
Intro External Internal Strategy Solution

31. Controls
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Controls
Hire Back Employees
Bringing laid off employees back –
employee morale, took 5 years to bring
10,000 new employees less than 3 months
to let go of 20,000
Cargo Business
Focused targets and goals for
cargo business
Diversity Framework
Diversity framework clearly
established both within board and
company wide
Leadership Transition
Calin Rovinescu → Michael Rousseau
Intro External Internal Strategy Solution

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33. Enter Michael Rousseau
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- Rousseau was formerly
named the best CFO in
Canada in 2017
- Leverage knowledge and
strength of finance to
showcase to board and
shareholders he can help bring
Air Canada to a solid fiscal
position
Intro External Internal Strategy Solution

34. The Air Canada Story
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Tortoise and The Hare
Legend:
Air Canada
Air Canada
during COVID-19

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“Pessimists are usually right and optimists
are usually wrong but all the great changes
have been accomplished by optimists.”
- Calin Rovinescu quoting
Thomas Friedman
CEO of Air Canada

36. Questions?
36
THANK YOU !