Canadian Airlines on the Rise
The Canadian airline industry, although smaller than its southern US counterpart, is highly competitive. With major airlines holding the leading position for a multitude of years, the smaller airlines have a hard time making a break into the market. But over the past few years, things have been changing. With Canadians looking for the best deal for cost and comfort, the larger airlines are starting to lose out to local competitors that provide cheap fares with extra benefits. This month, see how the airline industry is faring in Canada in 2012.
Leader of the Industry
Air Canada has been viewed as the top dog of the Canadian airline world for a long time. Offering the most flight options and easiest opportunities across the border to the US, it’s no wonder Air Canada is leading the industry. Air Canada serves a total of 175 destinations on five continents with local flights to 59 Canadian and 56 US cities. Ranked as the 15th largest commercial airline in the world, Air Canada serviced more than 33 million customers in 2011.
Holding the leading spot in Canada hasn’t been all fun and games for Air Canada. In 2011, the airline saw disgruntled employees represented by multiple unions embarking upon negotiation talks and many employee groups on strike as a result of negotiations going south. From flight attendants to the operations crew, issues between Air Canada and its employees continued through 2012 as late as July.
Airlines on the Rise
Although not the leader of the industry, Canada has some other airlines that have real potential for growth. WestJet and Porter are becoming household names for travel to and from Canada. Both saw serious growth in August for their passenger load within the market.
WestJet has been making a name for itself. Offering new flight destinations, being named Canada’s most pet friendly airline, entering into agreements with other airlines for new destinations and more frequent flier opportunities to better serve customers while pursuing greener operations, WestJet has been implementing customer benefits to its operations. Hoping to compete for the top spot against Air Canada, WestJet offers service to 81 destinations worldwide and claims itself as the pioneer for low cost flying in Canada.
In August of 2012, WestJet had its highest passenger load factor ever of 88.9 per cent while its revenue passenger miles, or traffic, increased 9.2 per cent year over year. Additionally, the airline flew 172,000 more guests in comparison to August 2011.
"We are extremely pleased to report the highest single-month load factor in WestJet history and I thank our caring WestJetters for their added energy in this record-breaking month," commented WestJet President and CEO Gregg Saretsky. "The demand environment remains strong and we are seeing a growing contribution from our airline code-shares and interline partnerships."
An airline that got its start just recently, in 2006, Porter has been garnering a reputation for cost-effective flights with added benefits. Offering all passengers a perk of in-flight free alcohol, the Porter is slowly, through word-of-mouth, becoming the go-to airline for Canadian travel. Offering service to 20 destinations in Canada and the US, Porter is still a small airline but is focused on growth. In 2012 Porter increased flight service to multiple locations, added new destinations and set a record for load factor multiple times.
In August, Porter had a passenger load factor of 74.5 per cent carrying upwards of 260,000 passengers, the highest load factor the airline has ever seen.
"This is the best month we've had in nearly six years of operating," said Robert Deluce, president and CEO of Porter Airlines. "It's a reflection of the strong passenger experience, brand and customer service that Porter is known for."
Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.