As the Canadian economy gradually recovers from the adverse effects of the COVID-19 (coronavirus) pandemic, many industries are now struggling with how to regain market share and expand their businesses in a post-pandemic environment. Although almost every industry has been affected by the pandemic, industries hit hardest must now discover even more ways to generate revenue and supplement the revenue lost during the peak of the pandemic. One particular industry that has endured a significant reduction in revenue is the Scheduled Air Transportation industry in Canada.
Opportunities arise
As travel has been greatly restricted to help mitigate the spread of coronavirus in 2020 and 2021, the Canadian Scheduled Air Transportation industry experienced contracting revenue, which has fallen at an annualized rate of 6.4% to $16.1 billion over the five years to 2021. However, as economic conditions steadily improve with more vaccine roll outs, reopening borders and growing consumer confidence, airlines have been able to take advantage of pent-up demand and slowly offer more and more flights across the world.
After 16 months of a closed land border between the United States and Canada for all leisure travel, on August 9th 2021, Canada began permitting fully vaccinated Americans into the country again. In addition, on September 7th 2021, Canada further permitted vaccinated visitors from across the world to enter into Canada for leisure purposes. As international borders continuously open up and national restrictions continue to ease, airlines are expected to experience an influx in demand.
Enough is enough
Although demand for flights is forecast to increase, airline companies have been forced to come up with other revenue streams to make up for lost profit in 2020 and 2021. Many airlines are focusing on attracting premium travellers since they typically generate the most profit. Airline companies across the world have recently begun to open their premium lounges to help entice wealthy passengers to spend more money at airports. By opening more lounges, airlines are also expected to attract more passengers that are looking to avoid crowds and enjoy a nice meal.
Subsequently, Air Canada has joined this movement by opening three Maple Leaf Lounges to economy passengers that are willing to pay extra for a more private waiting experience before their flight. In addition, Air Canada is expected to continue leveraging its premium products and services since it generates the most profit within the Canadian Scheduled Air Transportation industry. However, the industry is not the only one that has strategized to market its premium products and services in an effort to recoup some of the lost revenue during the pandemic.
Make 'em want it
The Canadian Movie Theatres industry is also expected to advertise more of its premium products, such as 3D movies and IMAX experiences. In addition, movie theatres will likely continue to promote its high margin concession stands, with an emphasis on more food options that are higher quality. Efforts to promote premium products and services have been done to adapt to changing consumer preferences, many of which have been altered due to the prevalence of streaming services and a post-pandemic economy.
Overall, adapting to a post-pandemic market may be challenging for many industries, and a company that does not evolve may quickly lose market share. However, the Movie Theatre and Scheduled Air Transportation industry’s strategies of leveraging more of their premium products and services may prove to be a beneficial way to recoup some of the lost revenue during the pandemic.
