In 1987 Calgary based regional carrier Pacific Western Airlines formed Canadian Airlines after their purchase of CP Air. Two years later they purchased Wardair, which established them as a major airline within Canada. However over the following 10 years Canadian was faced with many problems which led to their merger with Air Canada in the year 2000. Canadian Airlines was unsuccessful in their business venture due to their failure to plan for the future, poor business ventures, and refusal to accept their part of the market share. It was a direct result of these problems which cause the company to crash.
Over the company's 13 years of existence they continually did not plan for the future. They made their decisions based on what was pertinent at that moment, more often than not using 'band-aid' solutions to solve complex problems. Canadian Airlines had continual problem with money and capital. Normally when in financial trouble an airline can dip into cash reserves or raise funds on the equity market.
Another fallen flag that lived on for a while as C...
Canadian Airlines Boeing 737 at Ottawa Macdonald-C...
English: Original counters once operated by Canadi...However, at this point Canadian can do neither. On top of that, their borrowing capacity is almost non existent. Furthering their lack of future planning is their refusal to invest their money into building a fleet of airplanes. Canadian owns just 10 of its 79 aircrafts, and six of those ten are rarely used DC-10's. By relying on lease agreements for their aircraft it only reduced the minimal amount of capital on hand, while increasing the expenses of the company. Canadian also has experienced planning problems with what is called 'yield management." Defined as an obscure and highly complex science in which computers allocate the right number of high-priced and low-priced seats per flight in order to maximize revenue . By utilizing this science, an airline can be significantly more profitable. However according...