Just 11 years after filing for bankruptcy Air Canada reported its most successful quarter in history.  In the past Air Canada has struggled with pension problems, poor service, and a bad business model.  After filing for bankruptcy 11 years ago however, things have changed.  In Austin Perry’s blog Indigo Lives, Austin mentions how a business’s must adapt to changing customer preferences to survive.  This statement cannot be more true as shown by Air Canada.  The aviation market has changed from business oriented, to progressively leisure oriented.  What Air Canada has done to counter this changing market is modernize their fleet to be as fuel efficient as possible, and increased the number of seats on their aircrafts.  This has allowed them to make routes that were unsuccessful, profitable.  Air Canada also started up a low cost leisure airline, with the name Air Canada rouge.  Air Canada has in the past attracted mostly business related passengers, however, rouge is part of Air Canada’s plan to attract more leisure travellers.  Air Canada has transferred many of its mainline routes to rouge, because of the lower operating costs associated with the subsidiary.  Both flight attendants and pilots make lower wages on rouge.  The cost per passenger is less on rouge aircraft because Air Canada crams more seats onto the aircrafts.  The average Air Canada 767 300ER aircraft seats 211 passengers, while the rouge version of the 767 carries 280 passengers.  The consumer benefits from these changes because the airline will now be able to offer service to markets that would be unattainable in the old cost structure.  Some airlines have failed to adapt and have been hit hard such as Qantas and Alitalia, who are both struggling in the modern consumer market.  With their new business structure, Air Canada has positioned themselves for success in the future, much like Indigo has done.

New Air Canada 777 300ER seat map with 36 executive class seats, 24 premium economy class seats, and 398 economy class seats, showing how Air Canada is densifying its aircrafts

Old Air Canada 777 300ER seat map with 42 business class seats and 307 economy class seats

Sources: http://www.theglobeandmail.com/report-on-business/air-canada-profit-rises-8-per-cent-on-higher-operating-margin/article21473705/, http://www.theglobeandmail.com/report-on-business/air-canada-to-charge-for-first-checked-bag-following-westjets-lead/article20653474/, http://www.cp24.com/news/air-canada-announces-plans-to-increase-international-capacity-1.2089796, http://aircanada.mediaroom.com/index.php?s=43&item=823, http://www.aircanada.com/en/about/fleet/b767-300rouge.html, http://www.aircanada.com/en/about/fleet/b767-300erxm.html

Media Sources: http://www.seatplans.com/airlines/air-canada/b777-300er-7, http://www.runwaygirlnetwork.com/2014/01/16/air-canada-sees-big-benefit-in-high-density-cabins/