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Airlines were hit hard the by the 2008 economic recession. Still today, many companies in this business have not yet fully recovered as supported by low trading values compared to 5 years ago. Some the reasons include the continuing economic uncertainty and competitive nature of the business that has left many investors hesitant about investing in airlines.
Amidst the concerns, the announcement of Air Canada’s success in cutting costs has left a ripple of positive feedback from investors. This competitive advantage is a possible reflection a strong management team where different departments work effectively together towards a common goal. In this case, a decrease in costs suggests the the operating division and accounting division are working effectively to allocate resources. If such teamwork continues, Air Canada will definitely be a great threat to other airlines.