Air Canada: Flying high with international technology Harvard Case Solution & Analysis


Air Canada the company was founded in 1937; it was privatized in 1989 due to heavy losses. After constant work and planning the company came out of losses in 1994. It was a founding member of Star Alliance in 1997. In 2001 it acquired Canadian airlines and in 2011 it became the 15th largest commercial airlines in the world.

In the early years of the company it was concluded that the company can not reduce the costs from buying low price fuel. So the only cost reducing factors were to make the process effective and efficient and to reduce the operational expenses.

For the sake of reducing cost, Air Canada outsourced its IT department’s major activities. The contracts were given to a number of vendors on the cost effective basis. However air Canada was never ready to compromise on the quality.


  1. How to create customer loyalty towards the company?
  2. How to increase customer satisfaction?
  3. How IT services will help in decreasing cost to the company?


H1- starts up of a customer care unit in every office to increase the customer loyalty.

Testing: in the service industry it is very important to keep your customers satisfied with your services. If a customer goes back unsatisfied, he will opt services from someone else from the next time and will influence your potential customers to opt other companies for the services. An unsatisfied customer is a bad publicity because he will share his experience with others and they may not choose you for the services you offer.

H2- teams should be built to manage the uncertain events occurring with the customers on a daily basis.

Testing: in the servicing industry, it is a daily routine that something may go wrong and a customer will be unsatisfied with the services. Teams should be helpful to the passengers and if anything that has gone wrong can be rectified at the movement it should be done and if not then the passenger should be compensated for the mistake on the part of company.

H3- customer friendly IT services will increase the customer satisfaction and decrease cost.

Testing: IT systems should be user friendly to make them able to do their bookings and check for the offers from their personal mobiles and laptops. This will encourage the customers to look for better offers and will attract them.

Proof and actions

Service industry is governed on the rule that the customer is always right. If a customer is unsatisfied, he should not return home with it. For the cause of keeping the customers satisfied there should be a customer care unit at every office specifically to entertain complains of the passengers personally.

The teams will help the customers on ground and will help the customers in need. The passengers who travel for the first time are the most important as they do not know the procedures carried out at the airport. This may cause them trouble and the teams will help the passengers.

IT systems should be customer friendly so that they do not feel difficult to interact with the company and to make their orders.

An example of best use of IT system is General Electric. It made a revolutionary decision as there was a risk of loosing its customers; it developed software’s that connects its machines to common cloud based software which ultimately help GE to generate $1.5 billion as incremental income and is hopeful to increase it to double in 2014.


It included the strengths, weaknesses and risks associated with the given recommendations.

Strengths: the use of customer care unit and customer friendly IT systems will help the customers and company comes closer as the customers will be well informed about the services offered.

Weaknesses: there may be a lack of training in the team. The employees selected to do the job may be demotivated because of the m\nature of job. Dealing with unsatisfied and angry customers is not an easy task.

Risks: the risk associated with the IT systems is that it can malfunction at any time and it can be hacked by rivals or some random hackers. The customers may receive false information about the company because of the malfunctioning of the systems.............................

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