Handling Turbulence

The airline world can be a harsh place for consumers - long lines, slow service, and the

unbundling of the airline service that at one time did everything for customers. Given the

experiences of customers and their great expectations, the landscape of the modern airline industry can seem harsh and unforgiving.

For Air Canada, the harshness comes not only from disgruntled consumers, but also from a very challenging external environment. And while Air Canada must face the economic, social ,technological, regulatory, and competitive forces that every airline in the world must face, it has reserved time and effort to deal effectively with another external force: corporate social responsibility.

The concept of CSR (corporate social responsibility) had its renaissance in the 1990s, when companies were under increased scrutiny from consumers and the general public. No longer were consumers simply willing to accept what was produced or be the targets of persuasive (ifnot manipulative) sales tactics. Entire industries faced backlash from consumers and social groups concerned about topics ranging from the state of the physical environment to the preponderance of ethical breaches by companies and executives.

Companies began to see the light by introducing policies that were friendlier to the

environment and to society at large. While the pursuit of profit and growth were still ever

present, the belief of a triple bottom line - one that focused on environmental and social

considerations as well as the financial bottom line - began to shape companies' actions in a myriad of industries.

The airline industry was not immune to the CSR movement but it was an industry that took its time to fully accept its social responsibility. Even as recently at 2009, only 14 of 41 airlines had annual CSR reports that were publicly available. It was in this reporting that Air Canada found its wings when it came to CSR.

Although a relative late starter to CSR reporting compared to companies in other industries, Air Canada began its CSR reporting in 2011. The focus of the initial CSR reports was on four areas: safety, the environment, the wellbeing of employees, and community involvement. The CEO of Air Canada, in the 2013 CSR report, noted: "We must behave responsibly and ensure our activities are sustainable. This heightened awareness of our interconnectedness applies not only to individuals but also to corporations. Since our founding more than 75 years ago, we have strived to balance economic, environmental, and social considerations in all that we do."

In 2017, Air Canada won the Award for Best Corporate Sustainability Report - Transportation, thanks to its 2015 CSR report titled "Citizens of the World." Highlights of the report included a Copyright 2019 by Nelson Education Ltd. $1.6 million donation to the Air Canada Foundation and fuel efficiency initiatives that saved over 11 000 tonnes of fuel that year. The primary mission of the Air Canada Foundation is promotion of the health and wellness of children and youth.

And the awards have kept on coming for Air Canada, garnering nods for one of the top two most attractive employers by Randstad Canada and one of Canada's best diversity employers by MediaCorp Canada. And while these accolades are significant feathers in the cap of a company like Air Canada, it can also be said that this is far removed from the critical eye of the

air traveller.

Looking at customer review websites for airlines, one would think that Air Canada would be far removed from winning an award of any kind. On Skytrax, an airline review site, Air Canada receives a rating of 5/10. On airlinereviews.com, Air Canada has a paltry 3.1 out of 10 rating. So, while Air Canada has put an effort into being a good citizen, this has not necessarily translated into a strong relationship with its end consumer.[If you are completing this case in class, please review Air Canada's CSR reports athttps://www.aircanada.com/ca/en/aco/home/about/corporateresponsibility/corporatesustainabilityreports.html]

Given your understanding of marketing, you are asked to translate Air Canada's CSR success into overall customer satisfaction. You will need to use the external marketing environment and the marketing orientation evolution to help make your case.

You are a marketing strategy analyst at Air Canada, and you have been asked to put

together a case for leveraging Air Canada's CSR reputation to bolster its relationships

with customers. Your ideas will have to be based on your understanding of Air Canada's

CSR reputation, be it from this case or from CSR reports that you can access on Air

Canada's website. There are no holding patterns for you- start your analysis on the

following pages.

ShortAnswer Questions

Q1. Describe the evolution of Air Canada's marketing orientation in its 80 years of existence.

Q2. Based on your understanding of Air Canada's CSR policies, describe the triple bottom line for the company.

Q3. After reading the Air Canada case, describe how Air Canada can use the success it has had

in CSR to help improve customer satisfaction.