Canadian Manufacturing

Air Canada’s ‘toxic culture’ provides management lesson for business

The airline is quickly becoming known for its labour strife, flight cancellations and poor customer service. What can your company learn from the Air Canada's experiences?



TORONTO—Air Canada must purge its toxic culture if it hopes to win back consumers frustrated with an airline increasingly known for labour strife and shaky service, industry observers are warning.

Labour troubles have hobbled the airline, plunging airports into chaos and frustrating travellers.

While the effects of the latest labour dispute faded over the weekend, some experts predict persistent tensions within Canada’s largest airline have eroded the carrier’s image beyond what slick ads and promotions can fix.

“There’s a poisonous labour climate in there, and that’s more than their image, it’s already their identity now,” said Gabor Forgacs of the Ted Rogers School of Management.

“If they want to right this ship, they need to make big changes,” he said.

With upstart carriers WestJet and Porter Airlines nipping at its heels, salvaging its ailing reputation may be a matter of survival for Air Canada, Forgacs said.

A bitter contract feud with its pilots and mechanics led to federal legislation banning strikes or lockouts at the airline. Ottawa also had to intervene in contract disputes involving the airline’s flight attendants and its customer service agents.

But the move only incensed workers, who retaliated through illegal job actions, including one last week by dozens of pilots who called in sick, forcing the cancellation of about 75 flights.

As a result, many travellers are turning to competing airlines that emphasize cheerful and friendly service. Only a complete overhaul of Air Canada’s inner workings can help restore staff and customer loyalty, Forgacs said.

“They need a new management culture… because whatever approach they have isn’t working for them.”

The airline’s handling of the flight disruptions has also been “woefully deficient,” said Kenneth Wong, a marketing professor at Queen’s University.

“It means (Air Canada) isn’t worried about losing my business,” a dangerous attitude to adopt even for an industry leader, said Wong.

In order to win back customers, the company must start by taking care of its “internal issues,” said Blair Robertson, a traveller from Deer Lake, N.L.

“They have to realize people have lives to attend to … The well-being of their customers needs to be at the top of their mind.”

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