The topic in which I chose to do a scrapbook on was “How the government affects the airline industry in Canada”. Specifically I chose articles that related to the aftermaths of the September 11th tragedy. This event affected airlines in an enormous manner.
Many airlines were facing economical problems and in turned asked the government for assistance. As a result, Canada 3000, which was Canada’s second largest airline carrier filed for bankruptcy protection on October 11th. Air Canada was also faced with many hard to make decisions. They turned to the Canadian government and asked for financial assistance. The Problem Solving Method will be examined to determine how the government came to the decision of actually granting Air Canada some assistance.Problem Solving Method1.Decide on the “Issue” (Define it carefully to avoid arguments later.
)The issue that is being discussed in whether or not the government should help Air Canada out financially. As can be seen in the articles presented in the scrapbook, it is known that the government controls many of the operations at Air Canada.2.
Examine various points of view and the opinions they have.Your ownIn my opinion, I think that the Canadian government should help Air Canada with financial assistance. I believe that if the government wants to have control over their fare prices, whether or not they can open a discount airline, and the amount of workers they are able to hire, that they have an obligation to the airline to help them out in these types of situations.Those of key groups or individuals (stakeholders) a) Air Canada Union Representatives – This group feels that the government should be active in financial aid relief. During the events after September 11th, the union stated in many national papers, that they felt that they deserved the same amount of support and relief that the US government was giving their airlines.
b) The Canadian Government – The government had essentially three choices: i)They could help the airline.ii)They could do nothing and let the airline claim bankruptcy.iii)They could buy back into Air Canada.
With the first choice, the government has to allocate some of their resources to the airline. The second option was not feasible for the government to partake in because of the fact that Canadian citizens would be loosing the biggest airline carrier. The third option, which the government did consider, involved two options.
The government could either buy a minority of the shares or they could buy the entire operation and that would result in Air Canada becoming a crown corporation.c) The Shareholders – This group has major concerns since they own stocks and have invested their money into the struggling company. The shareholder’s opinion counts a great deal. They would like to see basically anything done in order to save the company, even though the value of their stocks had dropped drastically in the weeks after the September 11th terrorist attacks in the US. d) Canadian Citizens – Although much of the population fall into one of the above groups, it is important to discuss the views of those who do not.
Canadian citizens had varying views on what the government should do with respect to Air Canada. Some felt that the government is not responsible for what happened and that they shouldn’t be involved. However, these people fail to realize the role that the government plays in the airline industry. If they were more informed, they might understand why the government has a responsibility to the airline. On the other side, some citizens felt that the government should do anything and everything to help.
They took the stance that Canada cannot let the country’s largest airline claim bankruptcy.4. Is there a possible resolution that satisfies everyone to a reasonable degree? (Even an “improbable” solution might be acceptable to most parties and not strongly opposed to the others.)There is a possible resolution that the Canadian government arrived at.
It is still unsure whether or not it satisfies everyone. However, with every decision in society, is it really possible to satisfy everyone? In my opinion, I don’t think that you can, there will always be someone opposed.The solution that the government decided upon after considering all the above alternatives satisfied most involved.
Air Canada had initially asked for at least $3 billion in relief. The government was unable to fulfill this demand due to a lack of money. The government did decide to help Air Canada and grant them $160 million. The government arrived at this amount by deciding that this was the amount of money that Air Canada lost for not flying in the days following the September 11th tragedy. It was decided that it was not the fault of the company for the loss in revenue during that time.
The airline was pleased with this amount but felt however that they were being under-compensated. The shareholders were happy that something was done and were hoping that the stock prices many start to rise. The general public still maintained the same views and opinions they had before the decision was made public. However, even though the government did grant some relief, thousands of employees were laid off as a result of the terrorist attacks. As mentioned earlier, these attacks had greater effect on Canada 3000 as they could not survive and in the end filed for bankruptcy protection.As can be seen, the airline industry is in need of major aid. Whether that aid comes in the form of government assistance or from citizens who trust the airlines and are not afraid to fly, this aid needs to arrive soon in order for Air Canada to remain an airline carrier in Canada.
This is especially important at this time in the economy since our country is on the verge of a recession.