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In 1987 Calgary based regional carrier Pacific Western Airlines formed Canadian Airlines after their purchase of CP Air Two years later they purchased Wardair which established them as a major airline within Canada However over the following 10 years Canadian was faced with many problems which led to their merger with Air Canada in the year 2000 Canadian Airlines was unsuccessful in their business venture due to their failure to plan for the future poor business ventures and refusal to accept their part of the market share It was a direct result of these problems which cause the company to crash Over the companys 13 years of existence they continually did not plan for the future They made their decisions based on what was pertinent at that moment more often than not using band-aid solutions to solve complex problems Canadian Airlines had continual problem with money and capital Normally when in financial trouble an airline can dip into cash reserves or raise funds on the equity market However at this point Canadian can do neither On top of that their borrowing capacity is almost non existent Furthering their lack of future planning is their refusal to invest their money into building a fleet of airplanes Canadian owns just 10 of its 79 aircrafts and six of those ten are rarely used DC-10s By relying on lease agreements for their aircraft it only reduced the minimal amount of capital on hand while increasing the expenses of the company Canadian also has experienced planning problems with what is called yield management Defined as an obscure and highly complex science in which computers allocate the right number of high-priced and low-priced seats per flight in order to maximize revenue By utilizing this science an airline can be significantly more profitable However according to Tae Oum an air transportation professor at the University of British Columbia Canadians yield is so low because it screws up pricingit needs
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