Air Canada Air Canada has experienced several challenges in the recent years, particularly intense competition in the domestic market because of the entry or expansion of other carriers to compete with the airline. The immediate issues for the Air Canada were the recent labor dispute and declining share price that affected its financial position. The basic issue was the intense competition brought by new and existing rivals in the domestic market. While Air Canada was experiencing a decline in its share price, the competitors were experiencing tremendous growth in market share, especially WestJet. These issues were important in the firm’s operations since they affected Air Canada’s financial position and its operations and productivity. The …show more content…
The firm’s pension plans differed from its competitors’ plans on the basis that Air Canada’s collective pension plans were among the largest in the country (Henderson, Wiedman & Cheung, p.2). However, the current defined benefits plan used by Air Canada is characterized by some major problems. These problems include its history of solvency issues in relation to its pension funding and deficient payments. Under the defined benefits plans, Air Canada cannot afford its pension liabilities as evident in its persuasion of unions and retirees to endorse a 21-month suspension on pension solvency deficient payments. The firm’s financial position also affects its ability to afford the pension liabilities given that its aggregate pension deficit was approximately $2.1 billion. The defined benefits plan has significant effects on attracting and retaining employees in the future. The company will experience difficulties in attracting and retaining employees in the future since the defined benefits plan hinders its ability to provide competitive benefits to employees. This enhances the likelihood of high employee turnover as workers seek for better and industry-standard