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Air Canada Management Report

Executive Summary

          Founded in 1937, Air Canada is one of the biggest airlines in Canada and one of the 20th biggest passenger airlines. The company has 184 destinations globally. The company is among one the members who found Star Airline. Air Canada has its headquarters based in Montreal, Quebec. Toronto Pearson International Airport serves as its biggest hub. Air Canada is present in all the six continents, with safely and good quality facilities (The National, 2018).

          Recently, the company has hit headlines due to massive system outages that disrupted its services and led to flight delays in March 2018 break. The service glitch was as a result of computer issue during the month of February, 2018. This led to disruption of the company’s system operations negatively affecting services for long hours (Air Canada, 2018). Several passengers had to wait for long hours while some were not able to board their flights to their respective destinations. This made several Air Canada customers to take to twitter to complain about service failure brought by computer problems.

          This paper seeks to provide a report to the Quality Managers providing the major reasons for the issues that currently face the airline company. The paper also looks into the capabilities and competences of the company as well as assessing the impact Kaizen technique have in providing continuous effective quality management. The paper will also provide recommendations on how to improve the quality.

Introduction

              Foundered in 1937, Air Canada has become one of the most recognised brands in Canada compared to other brands in Canadian aviation industry. Air Canada is seen as the most dominant of Canadian aviation market together with highly flawed international airline (The National, 2018). By the time it was founded, the company had few aircraft that flew its clients within and outside Canada by offering customers different services (Air Canada, 2018). Air Canada now currently experience improved profit flow due to the strategies it has put into place including several marketing approaches such as executive upgrades, hotel reservations, and travel insurance and also good meals (Air Canada, 2018). Since it was first launched, the company has worked hard to be present in every foreign and local airport by use of different techniques.

Problems being currently experienced by Air Canada

            The company is currently experiencing massive system outages which have led to service issues such as flight delays during the month of March 2018 break. This was after the company encountered a computer problem during the month of February, 2018 which led to the disruption of its services resulting in temporary delayed boarding on some flights (Air Canada, 2018). Passengers had to wait for hours and some failing to board their flights. After the company experienced this outage, some customers took to Twitter to complain. One passenger posted and asked,@AirCanada is something wrong with your system? I’m straitened outside checking at Heathrow. Another customer posted,@AirCanada I came to DFW here to check a bag before taking a flightfor YUL– is there a system outage?? This indicates that the company is not reliable and this is manifested when it experienced system failure that led to the outage. The company should ensure that all its systems operate efficiently without problems.

            The company’s computer system resumed normalcy after almost two hour outage that was seen to have negatively affected several local and international airports. The system issue led to many clients encountering delays for long (The National, 2018). The company took to twitter and announced that airport systems, customer call centers baggage check- in had been resumed, but it was still anticipating some delays in flight. The company updated its customers about the outage through twitter. Before the incident occurred, Air Canada first informed its customers through its contact center and aircanada.com that it was expecting some outage due to computer failure.

            In its message, the company said“we are sorry for any inconvenience caused and we are doing our best to bring back our services to normalcy as fast as possible. We appreciate your patience.” The company announced through its official website that the computer problem started coming up two days earlier. The company was experiencing the second outage in a period of two weeks (Air Canada, 2018). There were long queues and congestions in every airport in Canada, from Vancouver to Toronto due to the computer problem. After system problem was experienced, the company issued a statement assuring the customer that its expert team were working hard to restore the system back to normal (Air Canada, 2018). The company also put into place necessary temporary measures to help assist customers. A statement issued by the company said in part“The current system outage has negatively impacted on our esteem customers and we are sorry for the failure.” several other customers also posted on social media to express the frustrations system outage had caused them. In a post by another customer, Omir Ozdemir,@AirCanada stuck at FLL. I have got the information that Air Canada system has issues. This is not what I meant when I said earlier that I did not want the vacation to end. What's the ETA?#pissed. From the twits, it is evident that customers are frustrated and it only shows that the company is not reliable with its services.

            The company is however responsive enough to challenges it faces. When it had issues with its system, its experts acted with speed to restore the system within hours. The company gave assurance to its customers after experiencing the outage that everything would be back to normal and it lived up to that promise and restored back the service. The company is empathetic. It felt and shared the feeling of its customer by apologising to them and ensuring that system problem was restored as soon as possible. One of the twitter post by the company read, @AirCanada the company is at the moment experiencing a system outage at our customer Contact Centers andhttp://www.aircanada.com . The company regrets this and expert team is working to ensure that the problem is solved as soon as we can. Thank you for your patience. This message shows that the company is responsive and is empathetic to its customers.

Air Canada core capabilities and competence

            The company has vision and mission statements that are developed to act as touchstone and guide Air Canada employees on every action they take. These actions include ensuring safety operations and encouraging teamwork (Air Canada, 2018). The company’s major proposition is pegged on customer service strategy,“ensure that customers receive an air travel experience that addresses their expectations…Air Canada intends to provide continuous excellent services.” (air Canada, 2018). Providing level services enable the company to become a brand that forms formidable functional and emotional relationship with its clients, gratifying its requirements as a competitive advantage. To show that Air Canada has the right capabilities and competence to improve quality, the company has employed the use of high advanced analytics and business intelligence from Teradata (Air Canada, 2018). Due to emerging economic difficulties coupled with high fuel prices, competition and economic uncertainties, the company is making use of data warehousing to enable it to compete effectively and provide quality services to its customers across Canada and abroad. The company has bought new Teradata Data warehouse appliance that enables it to run capable and agile Teradata Database. Having acquired the system, the company can now decommission legacy independent data marts now being used for revenues and how the company carries out its activities. Air Canada Company decided to upgrade and migrate to completely integrated data environment because of its experience with the new Teradata Data warehouse appliance (Air Canada, 2018).     According to the one of the company’s managers, Marc Constantineau, the integration of performance of the site and the quality of Teradata, made the company to believe that Teradata is what they can use in order to succeed with its data mart consolidation and move much of its data to new data warehouse appliance (Tripadvisor.com. 2018) The company has adopted the new platform as a means of strategic method to migrate from the old data marts to the data warehouse. According to Marc Constantineau, the quality of the information, delivery speed, and relatively lower costs made the company to make the decision. As the company moves its analytical platform to an enterprise data warehouse, it will now be able to increase the strength of its data to its current profits and produce managerial data, which include putting together ticket information regarding every flight (Judd A, 2018). The company is maximizing the use of the Tetradata Aviation Industry Logical Data as a means of helping integrate data, which then enables Air Canada to lower development period and charges. According to Peeter Kivestu who is in the Teradata market, Air Canada has a vision for its business, which makes it dependent on analytics. What was meant to cover only one business department grown to cover several other business functions currently ad now represent a strategic collaboration with information and technology (Tripadvisor.com. 2018). Peeter Kivestu, Teradata industry solution leader, says that Teradata has shown that business can improve its analytics, and that information technology has low costs and each has hope in scalability of data warehouse to make it even better in coming years.

Kaizen

Air Canada should adopt Kaizen technique. Kaizen is pegged on the philosophical belief that anything can be improved: some companies check on the process and see that it’s working as required; these companies that use Kaizen believe a process can still be improved. This implies that they do not take everything as status quo-but rather there are there is the endless improvement of the process which leads to some noticeable change after a period of time. Such small changes become significant changes over a long period of time and therefore the company does not have to go through radical changes but rather achieve change gradually. The Kaizen technique is a better way to initiate change in the company without meeting resistance from employees and also the change is undertaken while the business grows and get used to its changing environment.Understanding the approach.

            Due to the fact that Kaizen is considered as philosophy compared to other techniques, its approach is found in other various process improvement means spanning from Total Quality Management, to using staff suggestion boxes. Kaizen works by enabling workers to identify gaps and shortcomings, and it empowers virtually everybody in the company to contribute on ways of improving management. The main purpose of Kaizen is to increase productivity, effectiveness, safety and reduction of wastes.

Advantages of Kaizen technique

There are several advantages that Air Canada can get when using Kaizen technique. The technique can cultivate the culture of developing teamwork and self-autonomous groups which at the end lead to morale among employees. Kaizen can also be used in any industry, including aviation industry. Kaizen also values customers and their needs and gives them the first priority, awarding them for their efforts and achievements which lead to motivation and making employees to fall as being part of the company. Kaizen will also help Air Canada to plan on breaking down departmental obstacles, and clear way for improvement that is directed towards satisfying the needs of the customer. Using Kaizen will enable the employees of Air Canada to get encouraged to achieve desired level of quality and innovation. The employees just need to have belief that change and improvement can be achieved. Air Canada should follow the footsteps of Ford Motor Company, which adopted the management strategy to implement processes that helped the company to record a lot of success.

Disadvantages

Regardless of the advantages Kaizen technique may provide to Air Canada, there are a number of disadvantages the company needs to learn about before finally deciding to adopt this technique as its management approach. Adopting this technique in an operating company means a change to how the company system works. When Air Canada decides to finally adopt the technique, it can be really challenging to use the old system of management again, and other junior employees may feel that their workload has gone up. Other disadvantage is that Air Canada may have to change entirely every approach they use to avoid and challenges that may come due to lack of proper preparation by the company Harwinder . Due to the fact that workers are an important part of this technique, Air Canada should strive to create an environment that provides its employees with the freedom to air out their concerns without any intimidation or fear of any reprisal.

            The company may get excited about adopting Kaizen technique, but this excitement may not last because the company may find it difficult to implement these changes. It is also possible that things may remain as they were. When this happens, employees may start losing morale, while the company may lose the money it used during the adaption of the technique. Another disadvantage of Kaizen technique is that it is not suitable for companies that are already established with management system in place. The technique is more effective when used in a new business that has not yet established its management system. Another disadvantage of this technique is that it is suitable for companies that already use specific culture, or have a management system they would want changed. However, the Kaizen technique would still work if the company remains focused on its goals and continue putting more effort until change is noticed.

Financial capabilities and competences of staff to improve quality

            Aviation industry requires large amounts of capital for it to operate effectively. This is a similar situation for Air Canada (Fitzsimmons, 2018). The debt financing comprises the largest part of the entire financing. The Last Quarter Growth Rate: 2.89%, as the same level of the industry. Air Canada is doing well financially. The company experienced an increase in the net t profit and return on asset in 2017 and similar liquidity ratio as well as low financial leverage Tripadvisor.com. (2018) this growth was as a result of low oil costs and increase of international flights.

Recommendation and conclusion

            To improve service delivery to customers, the company should act as one. Employees working in airline companies know that there are several stakeholders concerned with service delivery and ensuring that customers get good experience. These stakeholders include airline, airport, handler, caterer, police, customs, immigration and retailers. Despite this, majority of customers do not know exactly where one’s responsibility starts and ends. Customers treat these responsibilities as one. In case of any system failure, customers do not want to spend more time looking for whoever is responsible. Developing such customer-facing boundaries between organisations, pushing customers through a responsibility chain is difficult, and a zero sum game for these organizations engaging in that. Successful aviation companies understand the need to create lasting partnerships and Air Canada should take this step.

            Air Canada should adopt systematic improvement of operation concept. This concept requires that all work is carried out in processes that start and stop at some point (Fitzsimmons, 2014). The work processes are important because they comprise of 85-90% of quality of services and the productivity of workers in the company. Managers, not employees, are the ones tasked with the responsibility of ensuring that systems run smoothly in the company and they bear the blame in case of any system failure. Total quality management ensures that work processes are studied quantitatively, through individuals or groups, with aim of identifying where problems occur in processes, and then come up with solution to avoid them from happening again. Studying work processes will enable Air Canada to lower costs but ensure that there is improved quality of its services and products because it is not easy to inspect quality at the end of the process.

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