Financial Comparisons Across Different Business Models in the Canadian Airline Industry

Triant Flouris and Thomas Walker

No 208157, 46th Annual Transportation Research Forum, Washington, D.C., March 6-8, 2005 from Transportation Research Forum

Abstract: This paper examines the stock and accounting performance of two airlines in Canada, WestJet and Air Canada, over the past four years, taking into account the aftermath of the September 11, 2001, attacks. September 11 (9-11) resulted in dramatic changes in the airline industry and had significant implications on the economic gains of most airlines. Our study focuses on the viability of low-cost (LCC) versus conventional-cost (legacy) business models in Canada under the current business environment. We chose WestJet as a typical low-cost airline and compare its accounting and stock performance to Air Canada, a legacy carrier and rival in several business sectors. We found that WestJet’s performance was highly superior to that of Air Canada. As a result of our findings, we argue that WestJet’s business model provides the firm with significantly more financial and operational flexibility than the one exhibited by its legacy rival, Air Canada. WestJet’s lower operating costs, high consumer trust, product offering, corporate structure, workforce and work practices, as well as operational procedures are all factors that appear to contribute to its relative success.

Keywords: Research and Development/Tech Change/Emerging Technologies; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 28
Date: 2005-03
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/208157/files/2005_FinCompare_paper.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:ndtr05:208157

DOI: 10.22004/ag.econ.208157

Access Statistics for this paper

More papers in 46th Annual Transportation Research Forum, Washington, D.C., March 6-8, 2005 from Transportation Research Forum
Bibliographic data for series maintained by AgEcon Search ().