Air Canada hit some turbulence in its relationship with retail travel agents when it announced changes to its incentive program. Duncan Bureau, Air Canada’s Vice President, Global Sales, talks about the airline’s decision in this edition of Friday 5.
1. There’s been a lot of talk about Air Canada’s decision to eliminate the 7% at-source Cash Reward on Tango fares and reduce commission on other fares, while paying 4% for Flex and higher fares on domestic bookings. Why did Air Canada make this move and how was it received by agents?
Bureau: The reviews, as we anticipated, were mixed. Some are disappointed with the changes we have made. However every business evaluates their business model on an ongoing basis and the investments it makes and adjusts as required. We spent close to 12 months monitoring the investment results we made in the Cash Rewards Program and we solicited feedback from industry partners and thought leaders. Based on that analysis and the collective feedback we decided to reinvest in other areas of our incentive programs.
What we have also done is to now pay on the bookings made in the GDS which is something we have not done in a very long time.
2. Air Canada and Canadian travel agents have a long history together. What’s Air Canada’s message to its agency partners?
Bureau: Air Canada’s message to our agency community is that we want to work with them as value-add partners and we will work to earn that trust with them every day. That partnership has to be mutually beneficial. We sometimes have to make hard decisions that may not seem to support that vision but every decision we make is to create a viable, sustainable Air Canada which contributes positively to the travel industry and makes us great partners for the agency community.
3. Air Canada is coming off the best financial year in its history. Why was 2014 so successful for the airline?
Bureau: In 2014 we carried more people than ever – 38.5 million – and set records for earnings and load factors. It has not been easy and the job is not complete, but we achieved success by focusing in on our priorities of revenue growth, international expansion, customer engagement, channel management and culture change. In each area we have scored significant wins that provides momentum heading into 2015.
4. What key new routes and/or added frequencies can Air Canada passengers look forward to in 2015?
Bureau: 2015 is a great year as we continue to expand our network – the team is excited about the new routes we have lined up. Last year we announced North American route network expansion with the addition of new nonstop services from Calgary-Terrace; Calgary-Nanaimo; Vancouver-Comox; Toronto-Austin, Montreal-Mexico City and more recently Toronto – Atlantic City. All of these flights are set to launch in spring to early summer 2015. On the international side we start new nonstop service between Toronto and Amsterdam in June. Toronto – Dubai and Toronto – Delhi are both scheduled to start in November 2015.
5. The Brand Keys 2015 Customer Loyalty Engagement Index recently recognized Air Canada as the leading airline in customer loyalty. How are you winning passengers and gaining their loyalty?
Bureau: What we want our customers to say is: “I look forward to flying with Air Canada – I know that my experience will be comfortable and enjoyable.” We will accomplish this by getting both the big and small things right, and by delivering exceptional service with care and pride.
The entire Air Canada team, in every single department and branch, is focused on making sure that we get the big and small things right. How do we do that? By continuing to invest in the products that enhances the Air Canada experience for every single customer. We want that trip to be so outstanding that they are compelled to share it with family and friends.
What that means is when we purchase an aircraft, the features are carefully selected with the customer in mind. Take the B787 aircraft as an example. The overhead bins are bigger so our customer doesn’t have to sacrifice legroom. The windows are 30% bigger and designed so even the passenger sitting in the middle of the aircraft can have a view of the outside. There is an electrochromic dimming system allowing passengers to control the amount of natural light that enters the cabin with the touch of a button.
We will continue to invest in technology, staff, onboard and airport products, all with the aim of consistently delivering an exceptional experience.