Sustained Advantage in the Airline Industry

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ARTICLE FILE 3

Sustained Advantage in the Airline Industry

ARTICLE FILE 3

Sustained Advantage in the Airline Industry

Since inception, Air Canada has held a sustainable competitive advantage in the Canadian airline industry. Historically, Air Canada had been successful at building solid distinctive competencies by employing their strategic resources and strengthening their capability to use resources effectively. However, at the same time, much of their advantage existed due to government regulations which dictated the level of competition within the industry. While Air Canada currently remains the dominant airline within Canada and in international flights from Canada, the company has been losing their sustained advantage for quite some time. Having recently emerged from bankruptcy protection, Air Canada is in need of a great deal of reconstruction in order to reduce costs and regain its competitive advantage. As a result, Air Canada's sustained advantage may be examined on the basis of three factors; how it was first established, why it failed, and how it might be rebuilt.

Until more recently, Air Canada had been able to build and maintain its competitive advantage in the Canadian airline industry. Essentially, Air Canada was able to build distinctive competencies by using