Financial Comparisons Across Different Business Models in the Canadian Airline Industry Report as inadecuate

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This paper examines the stock and accounting performance of two airlines in Canada, WestJetand Air Canada, over the past four years, taking into account the aftermath of the September 11,2001, attacks. September 11 (9-11) resulted in dramatic changes in the airline industry and hadsignificant implications on the economic gains of most airlines. Our study focuses on the viabilityof low-cost (LCC) versus conventional-cost (legacy) business models in Canada under the currentbusiness environment. We chose WestJet as a typical low-cost airline and compare its accountingand stock performance to Air Canada, a legacy carrier and rival in several business sectors. Wefound that WestJet’s performance was highly superior to that of Air Canada. As a result of ourfindings, we argue that WestJet’s business model provides the firm with significantly morefinancial and operational flexibility than the one exhibited by its legacy rival, Air Canada.WestJet’s lower operating costs, high consumer trust, product offering, corporate structure,workforce and work practices, as well as operational procedures are all factors that appear tocontribute to its relative success.

Subject(s): Research and Development/Tech Change/Emerging Technologies

Research Methods/ Statistical Methods

Issue Date: 2005-03

Publication Type: Conference Paper/ Presentation

PURL Identifier:

Total Pages: 28

Record appears in: Transportation Research Forum > 46th Annual Transportation Research Forum, Washington, D.C., March 6-8, 2005

Author: Flouris, Triant ; Walker, Thomas


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