Introduction
Zip Air, the discount carrier launched by Air Canada, appears to have a clear HR strategy that focuses on cost reduction and positioning itself in the low-cost market segment. Some of the pivotal components of Zip Air’s HR strategy include cost reduction, competitive wages, and employee transition, among others.
Overview of Zip Air’s HR Strategy
The primary goal of Zip Air’s HR strategy is to lower operational costs. This is to be achieved, in part, by offering lower salaries to Zip Air employees compared to Air Canada’s mainline flights. This approach aligns with the broader goal of reducing expenses. Moreover, Zip Air also aims to remain competitive within the low-cost market. This indicates a strategy of attracting talent by proposing salaries that are in line with industry standards for discount carriers. Last but not least, the statement that “they will be working for Zip” suggests that employees transitioning to Zip Air might experience changes in their employment conditions. Managing this transition, in turn, will be a crucial aspect of the HR strategy.
Alignment of HR Strategy with the Business Plan
As it turns out, the HR strategy employed by Air Canada’s subsidiary, Zip Air Inc., directly aligns with the business plan and objectives of the company. The primary goal of this strategy is to reduce operating costs and enhance the airline’s rivalry in the market. This approach supports the plan in several ways, such as cost reduction, market competitiveness, and adaptation to market trends, among others. The subsidiary significantly reduces labor costs if Zip Air employees are paid competitive wages that are lower than those of Air Canada’s flights (Stevens & Templeton, 2020). This indeed aligns with Zip Air’s goal to cut costs to operate more efficiently.
By contrast, in a highly competitive airline industry, cost control is essential. Zip Air’s focus on offering lower-cost services positions the company to compete with other budget airlines successfully and upholds the business plan’s objective of enhancing market rivalry. Finally, the aviation industry is evolving, with a growing preference for lower-cost travel options. Zip Air’s adaptation to changing customer preferences is crucial for long-term success and reflects the company’s ability to respond to market dynamics.
Employee Competencies, Commitment, and Competitive Advantage
Personally, I believe that Zip Air will not be able to mobilize its employees’ skills and commitment to achieve a competitive difference. I propose several reasons for this, such as employee dissatisfaction, limited services, and market expectations, among others. The intention to pay lower wages to Zip Air employees has already sparked opposition from unions. Eventual employee discontent can lead to lower service quality, which could be harmful to Zip Air’s competitive advantage.
What is more, Zip Air plans to offer fewer amenities, such as snacks instead of meals and no in-flight entertainment. While this reduces costs, it might make them less competitive with carriers offering more comprehensive services. Last but not least, customers may expect lower fares when a discount carrier is introduced. Zip Air might face backlash from customers if it cannot offer immediate cost savings, impacting its competitiveness.
Conclusion
To summarize, as can be seen, Zip Air has a challenging road ahead. While cost-cutting measures are essential for competitiveness, they need to balance these with maintaining employee satisfaction and meeting customer expectations. The extent to which they can mobilize employee competencies and commitment will determine their ability to gain a competitive benefit (Alola & Alafeshat, 2021). It is a delicate balance that Zip Air needs to strike effectively to succeed in the greatly competitive airline industry (Armstrong, 2006). In any case, I doubt the likelihood of its future success as I would stick to my arguments against achieving a competitive advantage.
References
Alola, U. V., & Alafeshat, R. (2021). The impact of human resource practices on employee engagement in the airline industry. Journal of Public Affairs, 21(1), 1-12. Web.
Armstrong, M. (2006). A handbook of human resource management practice (10th Ed.). Kogan Page Publishers.
Stevens, A., & Templeton, A. (2020). Collective action and labour militancy interrupted: Back-to-work legislation and the state of permanent exceptionalism at Air Canada. Economic and Industrial Democracy, 41(1), 6-28. Web.