Toxic culture is damaging Air Canada: analysts
April 16, 2012, Toronto - Air Canada must purge its toxic culture and attitude if it hopes to win back consumers frustrated with an airline increasingly known for labour strife and shaky service, industry observers are warning.
April 16, 2012 By The Canadian Press
While the effects of the latest labour dispute faded over the weekend, some experts predict that persistent tensions within the ranks of 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.
Experts believe that years of operating in a near-monopoly may have made the airline complacent.
But with upstart carriers such as WestJet and Porter Airlines nipping at its heels, salvaging its ailing reputation may be a matter of survival for Air Canada, Forgacs said.
Labour troubles have hobbled the airline in the past year, plunging airports into chaos and frustrating travellers.
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.
Those simmering tensions — and the possibility they could erupt at any moment — have shaken the public's confidence in the company, said Forgacs.
What's more, clashes between management and workers have fostered a toxic atmosphere that stressed-out employees then pass along to passengers, he said.
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.
Inadequate explanations for the cancellations and delays show "a lack of concern and a lack of effort'' when it comes to helping passengers, he said.
"It means (Air Canada) isn't worried about losing my business,'' a dangerous attitude to adopt even for an industry leader, said Wong.
For many Canadians, particularly those in remote regions, Air Canada is the only option, but that may not be the case forever, Wong predicted.
Already, some travellers are jumping ship whenever they can.
Jean-Francois Boileau, a salesman from Montreal who often flies for business, said deteriorating service at Air Canada — coupled with the risk of cancellations — have led him to book with other airlines when possible.
"(Air Canada is) not making the effort,'' he said. "Others are making more effort so they're not up to par.''
In order to win back customers, the company must start by taking care of its "internal issues,'' said Blair Robertson, another traveller from Deer Lake, N.L..
"They can't keep pushing this off or it's going to get worse,'' he said.
"They have to realize people have lives to attend to … The
well-being of their customers needs to be at the top of their