a: The Canadian dollar has been on rise since the downfall of U.S economy, growth in Canadian economic performance and increases in prices of commodities that Canada exports. Canada's currency is always compared with the U.S because they are Canada's leading trade partners and a rising Canadian dollar connotes weakening of U.S dollar. (http://www.cbc.ca/news/background/dollar_cdn/ - Feb 05, 2010)
In 2006, U.S had a trade deficit of $723.6 billion which resulted in selling U.S dollars in international money markets. This hit to the U.S economy resulted in a weakening of its currency (http://www.cbc.ca/news/background/dollar_cdnHYPERLINK "http://www.cbc.ca/news/background/dollar_cdn/"/ - Feb 05, 2010).
U.S Government lent too much money to borrowers/investors with weak lending practices at low interest rates after 2002 persuading investors to invest more; while trying to boost the economy after a dot com bubble (http://www.bankofcanada.ca/en/rates/us-interest-look.html - Feb 05, 2010). This hit the U.S economy in the long run following with a housing bubble (http://mysite.verizon.net/vzeqrguz/housingbubble/- Feb 05, 2010). When interest rate drops, it results in a decline of currency power (Brean: 50).
In 2006, Canada's GDP grew by more than 3% and unemployment rate was lowest at 6.3% - factors which strengthened the Canadian economy causing the Canadian dollar to rise (http://www.cbc.ca/news/background/dollar_cdn/- Feb 05, 2010).
Increased price and demand of Canada's export (Brean: 42); resources such as oil, nickel, copper, aluminum and zinc made the Lonnie globally as a "commodity-based currency" to bid on, pushing the Canadian dollar up (http://www.cbc.ca/news/background/dollar_cdn/- Feb 05, 2010). This corresponded with the increased percentage of Canadian export to U.S market of 56% in 1960 to 84.5% in 2004 (Barrows: 13).
Question 1b: Bank of Canada and the federal government played a vital role as Canadian dollar has been on rise since the downfall of U.S economy, growth in Canadian economic performance and increases in prices of commodities that Canada exports. The role of government is to support firms by decreasing pressure in the competitive environment (Barrows: 21).Some sectors are winners i.e. companies with debt in U.S dollars and importers, while others are at a loss i.e. Canadian manufacturing sector, auto part makers, lumber and paper companies (http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20070920 /loonie_story_070920/20070920HYPERLINK "http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20070920 /loonie_story_070920/20070920 - Feb 07" HYPERLINK "http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20070920 /loonie_story_070920/20070920 - Feb 07"- Feb 07, 2010HYPERLINK "http://www.ctv.ca/servlet/ArticleNews/story /CTVNews/20070920/loonie_story_070920/20070920 - Feb 07")HYPERLINK "http://www.ctv.ca/servlet/ArticleNews/story /CTVNews/20070920/loonie_story_070920/20070920 - Feb 07". Therefore the government must intervene for more equitable distribution of income or wealth (Jurkowski: 22), which they do by levying taxes on households and use proceeds to redistribute income (Brean: 36). An example of how government intervened in a specific losing sector: "M&P tax credit", given to manufacturing and processing industry was 1.5% till 2004 and increased to 2% after 2004 as Canadian dollar rose in value against U.S (http://www.rev.gov.on.ca/en/BULLETINS/ct/4008.html- Feb 07, 2010). In general, Bank of Canada decides at what rate money can be lent out (Brean: 36). Monetary policy controls the interest rates (Brean: 50). It is evident of how Bank of Canada used their monetary policy to change (increase) interest rates with rising Canadian dollar; as in 2002, $1CDN was equal to $0.62USD with interest rate of 2.5%, and in 2007 $1CAD went up to $1.04USD with an increased interest rate of 4.75%. Federal government and the Bank of Canada can lower the rising Canadian currency by selling Canadian dollars from its "Canadian-dollar cash balances" and consequently buying foreign currencies to increase Canadian dollars available in foreign exchange markets (http://www.bankofcanada.ca/en/backgrounders/bg-e2.html Feb 07, 2010).
Question 1c: Governor and Minister of Finance of Canada response to an increase in value of Canadian dollar was that it reduces the growth, makes it complex to maintain the inflation target and hence various policies/strategies need to be implemented to control the appreciation in Canadian dollar.
On October 22, 2009, Bank of Canada Governor Mark Carney (appointed in 2008) said that the rise in the Canadian dollar as compared to the U.S. dollar is slowing down the recovery and growth as policy makers' efforts to reduce inflation back to the target of a 2% (1-3%) annual rate is at risk. Also, he clearly stated that "he can use his tools effectively to diminish the effect of rise in Canadian currency" (http://www.theglobeandmail.com/report-on-business /mark-carney-says-he-could-move-on-dollar/article1333735/ - Feb 08, 2010). The inflation rate year over a year back was 1.3239% (compared to 0.9641% for the previous month) (http://www.rateinflation.com/inflation-rate/canada-inflation-rate.php - Feb 08, 2010). He made it clear that bank cannot decrease current interest rate below the 0.25% level to bring back the inflation to its target level, but he can use any "unconventional measures" to do so, even if he has to directly intervene in the foreign exchange market (http://www.vancouversun.com /sports/Bank+Canada+Mark+Carney+ worried+about+Canadian+dollar+strength/2043783/story.html - Feb 08, 2010). David A. Dodge's (Governor: 2001-2008) response to the appreciation of the dollar was different and he increased the bank lending rate from 2004 to 2006 as the Canadian currency was rising to maintain the inflation target of two percent, even though manufacturers in Central Canada had a negative impact (http://www.cbc.ca/news/background/dodge/ - Feb 08, 2010).
Finance Minister Jim Flaherty was more concerned about the consumers paying too much for imported goods as the Canadian dollar rose in value. His goal is also to keep prices steady (Brean: 52). He said that "the government expects business leaders to pass along savings to consumers from the higher Canadian dollar (http://www.cbc.ca/canad a/story/2007/08/06/flaherty-apec.html#ixzz0fYxZM7Xw - Feb 08, 2010). If businesses don't reduce their prices then the Canadian economy will have a huge negative impact as consumers will start buying more of U.S products/goods that can save them up to 40% (http://www.cbc.ca/canada/story/2007/08/06/flaherty-apec.html#ixzz0fYxZM7Xw - Feb 08, 2010). Even the import prices haven't reduced in accordance with the rise in Canadian dollar. In response of Mr. Flaherty request, business leaders' response was that they purchased inventory when the Canadian dollar was still weak (FIFO method will be applicable). Hence, in September 2009 when there was a deflation(http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?symbol=CAD- Feb 08, 2010), Mr. Flaherty said he will use tax credits to reduce the effect of rising dollar which would increase productivity and will bring the inflation closer to the target of 1-3% (http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20070920 /loonie_story_070920/20070920- Feb 08, 2010). When inflation started to rise and rose to a high of 1.3% in Jan 2010, Mr. Flaherty in January 2010 contradicted with his statement made in 2009 and commented that he is not considering any plans of tax credits (http://www.northernnews.ca/ArticleDisplay.aspx?e=2238357- Feb 08, 2010). Mr. Flaherty also said that "one way to cut the value of the currency was for the central bank to engage in quantitative easing: effectively printing more money to buy debt" (http://www.canada.com/business /High+loonie+putting+pressure+manufacturing+Flaherty/2147585/story.html- Feb 08, 2010).
Question 1d: The Canadian airline industry is a winner with the rise in Canadian dollar because of reduction in operating costs, increasing their competitiveness and encouraging Canadians to travel more with an increase in their buying power.
Although there are negative and positive effects of rising Canadian dollar on the Airline industry, overall the Canadian airline industry is a winner. Even though rising Canadian dollar makes Canada an expensive nation to travel to, but numbers suggest that in 2007 major airlines accounted for about 55 million passengers which is an all-time high (http://www.statcan.gc.ca/pub/51-004-x/2009003/part-partie2-eng.htm- Feb 14, 2010). The trend of an increase in number of passengers enplaned by Canadian airlines commenced in 2004 (following the path of rising Canadian dollar). The domestic airline industry grew 6.7% in 2007 to 33.1 million passengers, while the international airline industry only grew by 4.8% to 21.8 million passengers (http://www.statcan.gc.ca/pub/51-004-x/2009003/part-partie2-eng.htm- Feb 14, 2010). "The appreciation of Canadian dollar is a real boost for Canadian airlines as it decreases their costs (http://www.wednesday-night.com/T-cc.asp- Feb 14, 2010), as Canadian airlines pay for aircraft parts, aircraft leases, fuel and other associated costs in U.S. dollars. (http://www.thefreelibrary.com/Part+1+of+2+-+Canadian+Airlines+Corporation+Reports+Loss+for+1998-a053853163- Feb 14, 2010). Moreover it makes it easier for Canadian airlines to maintain and replace planes at low cost (http://www.canada.com/vancouversun/news/business/story.html?id=755f8a24-21a9-4ddf-9353-419d292e7dd3- Feb 14, 2010). It is evident from the fact that when Canadian dollar dropped in 1998, Canadian airlines increased costs of tens of millions of dollars, although fuel prices were low (http://www.thefreelibrary.com/Part+1+of+2+-+Canadian+Airlines+Corporation+Reports+Loss+for+1998-a053853163- Feb 14, 2010). It also persuades Canadians to travel abroad more often because of the rise of Canadian dollar (http://www.wednesday-night.com/T-cc.asp- Feb 14, 2010). For example: In fourth quarter of 2009, Air Canada reports a decline in operating expenses amounting $213 million or 8% as compared to the fourth quarter of 2008. Out of $213 million reduction in operating expenses, $105 million was solely due to the rise in Canadian dollar (http://memorial.aviation.ca/content/view/8426/117/- Feb 14, 2010). The Canadian dollar was $0.96 USD in fourth quarter of 2008 against $0.77 USD (http://www.bankofcanada.ca/en/rates/exchform.html- Feb 14, 2010). According to 2007 statistics, operating revenue for airline industry started to follow an upward trend from 2004, after a long 15 year period from 1990- 2004, when they lost $6.9 billion (http://www.statcan.gc.ca/pub/ 51-004-x/2009003/part-partie2-eng.htm- Feb 14, 2010).
Question 1e: Increase in revenues and air traffic with the rise in Canadian dollar proves that Canadian airline industry sector has outperformed the challenges to gain global competiveness by improving service, reducing fare (discounts & other offers) and reduction in cost.
Economically speaking when the Canadian dollar increase in value, people buy less of Canadian products because it costs them more as buying power of U.S dollar decreases. For example with the airline industry, Canadian airfare used to be cheaper for business travelers because of low value of loonie, but now since it is almost at par with US dollars people will fly with US commercial airlines instead. This hit the airline industry dramatically but Canadian Airline industry rose to the challenges of gaining global competiveness of the rising dollar with various strategies. "Porter through competitive advantage of nations has emphasized the importance of effective strategy in comparison to traditional determinants of competiveness such as labour, raw materials, capital, or land costs, and other factors of production" (Barrows: 30). The only way to gain/ maintain competitive advantage globally is that Canadian airlines would have to provide better services or give flexible pricing options to consumers. "The marketplace establishes an economic framework within which firms compete on the basis of a number of factors: price, quality, delivery, after-sales service etc"(Barrows: 3). Even though, Canadian airline industries are saving millions in operating expenses due to rise in Canadian dollar, they still need to remain efficient to be competitive in domestic and global market. And they did become efficient as air traffic at Canadian airports continued an upward trend begun in 2003; supported by the fact that in 2008, the total enplaned/deplaned passengers were 108 million (http://dsp-psd.pwgsc.gc.ca/collection_2008/statcan/51-203-X/51-203-HYPERLINK "http://dsp-psd.pwgsc.gc.ca/collection_2008/statcan/51-203-X/51-203-XIE2006000.pdf"XIE2006000.pdf- Feb 15, 2010). The way Canadian airline industry countered the challenges of rising dollar resulted in an increased growth in passenger traffic in 2007 in all sectors including domestic, trans-border and international (http://dsp-psd.pwgsc.gc.ca /collection_2009/statcan/51-203-X/51-203-x2007000-eng.pdf- Feb 15, 2010).
Rising Canadian dollar brings the inflation rate down which is favorable for Canada's global Competitiveness because it makes Canada less expensive in terms of production and unit labour cost. "A productivity basement using cost based model to measure competitiveness at macro level is affected by exchange rates" (Barrows: 15) "Exchange rate appreciation had mixed effects and the rewards of Canadian economic growth are not necessarily shared equally across the land" (Brean: 42). Not only appreciation in Canadian dollar negatively struck the airline industry, it also had numerous positive impacts. Canadian airline industry benefited as it became less expensive for Canadians to travel, reduced operating cost, repair and change planes at less cost (http://www.canada.com/vancouversun/news/business/story.html?id=755f8a24-21a9-4ddf-9353-419d292e7dd3- Feb 15, 2010). As ATAC (interest group) stated: "With a healthy US dollar exchange rate, imports such as parts, fuel and aircraft will be less expensive for Canadian carriers as these are purchased in US dollars" (http://www.atac.ca/en/files/2007_ATAC_%20Annual_en.pdf- Feb 15, 2010). T o enhance global competiveness, it is important to be cost competitive in terms of production, distribution, sales and service (Barrows: 10).
Porter's "diamond" has four categories which are important determinants of competitiveness: "Factor conditions, demand conditions, related and supporting industries, firm strategy, structure and rivalry (Barrows: 19).
Porter model of demand conditions: "increased concern of quality of goods and service" (Barrows: 20) - "An increase in real disposable income led to a strong demand for air services" (http://www.atac.ca/en/files/2007_ATAC_%20Annual_en.pdf- Feb 15, 2010). As the purchasing power of U.S dollar decreased, the demand decreased to travel Canada. To face this challenge and to increase their competiveness, many Canadian Airline companies increased their intensity of their service; hence making customer more satisfied by having more flights, frequent flights, commenced services to additional destinations and introduced further non-stop services in 2007 (http://dsp-psd.pwgsc.gc.ca/collection_2009/statcan/51-203-X/51-203-x2007000-eng.pdf- Feb 15, 2010). Porter's belief is that nations do not compete: rather it is the firms within a nation that must be competitive (Barrows: 19). Some airlines started to offer discounts/promotions to stay competitive by attracting U.S. passengers. For examples: in 2007, Air Canada started offering their US customers "subscription flight passes providing un-limited air travel between Canada and the US for a flat monthly rate" (http://dsp-psd.pwgsc.gc.ca/collection_2009/statcan/51-203-X/51-203-x2007000-eng.pdf- Feb 15, 2010). International trade is important for Canada's economy because of Canada's small and open economy (Barrows: 154). As Canadian exports to U.S market is almost 84.5% in 2004 (Barrows:13), it is essential for Canada to be cost competitive in the U.S market (Barrows: 13). Other promotions targeting everyone included 'Winter Getaway Pass' promotion by Air Canada offering unlimited trips to selected places within Canada and between Canada and the U.S (http://dsp-psd.pwgsc.gc.ca/collection_2009/statcan/51-203-X/51-203-x2007000-eng.pdf- Feb 15, 2010). Airlines not just gave special offers to U.S passengers; in 2007, Air Canada offered Canadians an "Unlimited Pass- multi-trip pass product" to travel within Canada and to U.S. (http://dsp-psd.pwgsc.gc.ca/collection_2009/statcan/51-203-X/51-203-x2007000-eng.pdf- Feb 15, 2010). Porter model of "related and supporting industries: relations with suppliers" (Barrows: 20), is supported by an example in 2009 when Air Canada modified their credit card processing agreements with one of their primary credit card processors on favorable terms because of drop in inflation rate (rise in Canadian dollar), which increased their cost competitiveness (http://memorial.aviation.ca/content/view/8426/117/- Feb 15, 2010).
Porter model of "firm strategy, structure and rivalry": organizational goals, increase in domestic competition will increase competitiveness globally (Barrows: 20) Firm strategy in terms of organizational goals is evident in an example as in 2009, Air Canada initiated a "company-wide Cost Transformation Program (CTP) which targeted $50 million in annual savings and cost reduction benefits for 2009, $250 million for 2010 and the full $500 million by the end of 2011 on a run-rate basis" (http://memorial.aviation.ca/content/view/8426/117/- Feb 15, 2010). Also, in 2008 many international rivals of Canadian airlines ceased their operations in Canada because the increased power of Canadian currency made it expensive for them to carry on business in Canada. But most of the Canadian airlines increased their domestic as well as international services with new Canadian airline entrants, which increased Canada airline industry's competiveness with increased domestic competition (http://dsp-psd.pwgsc.gc.ca/collection_2009/statcan/51-203-X/51-203-x2008000-eng.pdf- Feb 15, 2010). Speaking of strategy, in 2009, "Air Canada confirmed Continental Airlines as a new Star Alliance partner, providing their customers with new travel options throughout Continental's network in the eastern United States and Central America"(http://memorial.aviation.ca/content/view/8426/117/- Feb 15, 2010). All these commending efforts by Canadian airline industries proves that, "the primary source of a company's international competitive advantage lies in its home nation; foreign sources of advantage (favorable exchange rate) can supplement national sources but cannot be sufficient as a substitute" (Barrows: 30).
Other factors of porter model: "Roles of Government and chance"- Government can offer support to firms by reducing pressures in the business environment that hinders competitiveness (Barrows: 21). High prices of crude oil had a drastic impact on Canadian airline industry. Hence in early 2010, Government of Canada invested $61.1 million in R&D which also included "the development of a cost-effective biofuel production system using a marine microorganism and the development and commercialization of a new generation of advanced composite struts for the airline industry" (http://mediaroom.acoa-apeca.gc.ca/e/media/press/press.shtml?4651- Feb 15, 2010). To compete globally, industry must be cost-competitive as well as innovative. "Competitive pressures ensure that a firm's comparative advantage can be quickly lost as competitors act to lower costs, compete on price and continue to innovation process" (Barrows: 26). The government plays an important role in spending as well as in influencing saving and investments (Brean: 37). "The combination of increased fuel costs as well a desire to reduce our greenhouse production as emissions resulted in an interesting and innovative ways to save fuel" (http://www.atac.ca/en/files/2007_ATAC_%20Annual_en.pdf- Feb 15, 2010).
Competitiveness also means "driving down costs to the lowest common denominator by hollowing out corporations, shifting operations to lower- cost locales, reducing wages, benefits and social entitlements to workers" (Barrows: 4). For example: in 2009, Air Canada reported decrease in operating expense per available seat mile year-over-year. The reductions of these operating expenses (excluding fuel expense) were mainly because of the rise in Canadian dollar, lower wages, salaries and benefits expense. (http://memorial.aviation.ca/content/view/8426/117/) "A productivity basement using cost based model to measure competitiveness at micro level is determined by wage rates and productivity." (Barrows: 15) Due to a rise in Canadian dollar, inflation rate dropped and hence lower wages were paid (Brean: 50), which let the Canadian airline industry increase its global competitiveness. "Canadian labour costs are currently below those of Japan, Germany and U.S" (input costs) (Barrows: 15).
Productivity is increased if inflation is low and rise in Canadian dollar brought down the inflation. "Competitiveness involves increased productivity capacity achieved by innovation, superior technology, continuous skill-enhancing training and a concern with social equity and environmental preservation (value increasing society) (Barrows: 4). For examples, in 2009 Air Canada developed applications for iPhone and Blackberry users for North American airline and 56 % of Air Canada's passengers used self-service check-in products globally in 2009 (http://memorial.aviation.ca/content/view/8426/117/- Feb 15, 2010). Competitiveness can also be created by investing in what can be broadly defined as innovation (Barrows: 13). "The Heckscher-Ohlin theory assumed that all countries would have access to the same technology. Therefore countries with an abundance of a specific factor of production would have a comparative advantage in those goods and services whose production involved the intensive use of that factor in the production process" (Barrows: 147). This specific factor of production for Canadian airline industry was the rise in Canadian dollar which reduced their overall operating expense.
Question 2 (a): The Air Transport Association of Canada (ATAC) is a lobby group representing the Canadian airline industry who lobbies government and Transport Canada to eliminate/lessen costs, reduces taxes, change policies, directly/indirectly fund the Canadian airline industry to make it globally competitive.
"Lobbying appears to be a unilateral activity: the group seeks to have government do what it wants" (Stanbury and Moore: 238). One of the ATAC's objectives is to discuss with government to look for the improvement of Canadian airline industry (http://www.atac.ca/en/about/mission.html- Feb 18, 2010). With a favorable exchange rate, imports such as parts, fuel and aircraft will cost less to Canadian carriers as these are paid for in US dollars. "In 2007, Loonie traded near its highest point since 1960 trading well above the U.S. dollar. Hence, an increase in real disposable income led to a strong demand for air services. This made for a profitable year for ATAC members"(http://www.atac.ca/en/files/2007_ATAC_%20Annual_en.pdf- Feb 18, 2010). While international visits are increasing, they may not be sufficient to offset U.S. visitor decreases. Hence, for the Canadian airline industry to be cost competitive (i.e. to attract U.S visitors), ATAC raised many issues to the Federal Government in terms of reducing airport rents, fuel taxes and security costs, international harmonization, and SMS implementation (http://www.atac.ca/en/files/2007_ATAC_%20Annual_en.pdf- Feb 18, 2010). "Interest group makes an effort to influence public policy" (Wesson and Barrows: 218). ATAC put a great effort to convince government to decrease input taxes when Canadian dollar rose in value, to make their members competitive and as a result "the government signed several new "Open Skies" initiatives", which reduced the costs of their members. (http://www.atac.ca/en/files/2007_ATAC_%20Annual_en.pdf- Feb 18, 2010).
Question (b): ATAC's ability to present the facts in an organized, comparative and competitive manner has convinced, forced and encouraged the Federal government and Transport Canada to take various actions in favor of Canadian airline industry to stay cost competitive globally.
In specific ATAC lobbies the Minister of Transport Canada and in a broad manner they also demand and present proposals to cabinet ministers. ATAC has been actively involved in lobbying against government for all new increasing fees and charges imposed by the government so that their members can stay cost competitive in the global market (http://www.theglobeandmail.com/life/travel/article586517.ece- Feb 19, 2010).
Type of interest group- institutional-oriented interest group: "Groups with characteristics of having organizational continuity, extensive knowledge of areas of government relevant to members, immediate operational objectives and organizational imperatives that is more important than any other objective" (Stanbury and Moore: 229). ATAC worked together with the new lobby group NACC and tried to stop an appreciation in the "Air Traveller Security Charge" that was planned to be included in the budget of 2009 to increase the collections from Canadian airline industry. They argued on the basis that additional security charges will add to their current problems of reducing consumer demand (http://www.avcanada.ca/forums2/viewtopic.php?f=5HYPERLINK "http://www.avcanada.ca/forums2/viewtopic.php?f=5&t=49613"&HYPERLINK "http://www.avcanada.ca/forums2/viewtopic.php?f=5&t=49613"t=49613- Feb 19, 2010). According to sources, amount in excess of $400 million was collected of what was required to run the Canadian Air Transport Security Authority in Canada (http://www.avcanada.ca/forums2/viewtopic.php?f=5HYPERLINK "http://www.avcanada.ca/forums2/viewtopic.php?f=5&t=49613"&HYPERLINK "http://www.avcanada.ca/forums2/viewtopic.php?f=5&t=49613"t=49613- Feb 19, 2010). So, ATAC collaborating with NACC lobbied for no increase in security charge in the 2009 budget, using the airport rents paid for airport upgrades only, and reduction of excise tax on fuel (http://www.avcanada.ca/forums2/viewtopic.php?f=5HYPERLINK "http://www.avcanada.ca/forums2/viewtopic.php?f=5&t=49613"&HYPERLINK "http://www.avcanada.ca/forums2/viewtopic.php?f=5&t=49613"t=49613- Feb 19, 2010). According to Mr. Everson vice president for policy and strategic planning, "the Canadian security tax is the highest in the world, and as much as three times the $2.50 security charge levied on each leg of an American domestic flight up to a maximum of $10" (http://www.nytimes.com/2002/10/01/business/worldbusiness/01AIR.html?pagewanted=all- Feb 19, 2010). In 2008, ATAC worked with NAV CANADA to develop and implement new technology such as RNP, ADSB and RNAV B which will make significant improvements in Canadian airline industry (http://www.atac.ca/en/files1/2008_Annual_Report.pdf- Feb 19, 2010). In 2008, ATAC was successful to convince Federal Aviation Administration not to impose "Terrain Awareness Warning system (TAWS) requirements" on Canadian airlines (http://www.atac.ca/en/files1/2008_Annual_Report.pdf- Feb 19, 2010). In addition, "institutional-oriented group has a collective memory, rules governing the behavior of members and leaders, and procedures for reaching and implementing decisions" (Stanbury and Moore: 229).
Organization structure- All the members of ATAC appoint a board of directors. The Board controls the president & the CEO. There are three vice presidents for monetary affairs, operations and commercial general aviation, directly controlled by president. There is a corporate secretary who serves as an assistant to the president, an executive assistant who helps all three vice presidents and an accountant. Sources of financing- Financial statements of ATAC clearly indicate that their main source of revenue is from membership fees. Other source of revenue is from association meetings and other fees. Also for special programs, the funds come from airport and in form airline contribution (http://www.atac.ca/en/files1/2008_Annual_Report.pdf- Feb 19, 2010).
Attention devoted to research and the presentation of studies, brief, press releases etc- ATAC should be considered a staff group as they have "effective control, identifies the issues to be addresed and determines the targets and tactics of the group and have high level of commitment to the organizaiton" (Stanbury and Moore: 230). The new requirements introduced by Transport Canada require airport security clearance for employees in Canadian airline industry who have been out of Canada for three months in last five years. Countries like Sudan and South Africa do not keep any records of foreign worker and countries like Germany will refuse to give any information or clearance. With these rules thousands of airline employees were not able to have their security clearance confirmation to work at airports. On this matter ATAC stated that: "We have been in touch with Transport Canada to make them aware of how it's affecting us in terms of employees. Vice president of ATAC said that "While the requirement hits recent immigrant workers hard, many skilled airline employees who have worked abroad find they are unable to get aviation jobs when they return to Canada" (http://www.pprune.org/canada/347948-red-pass-lawsuits-human-rights-cases.html- Feb 19, 2010). All these facts were put forward to Transport Canada and demanded to eradicate such rules that is detrimental for the employees of their members (http://www.pprune.org/canada/347948-red-pass-lawsuits-human-rights-cases.html- Feb 19, 2010).
"Since the deregulation of the airline industry in 1987 the federal government has assumed a relatively minor role in the airline industry" (Jurkowski: 478). When Canadian airline industry was under the Federal government before 1988 (http://dsp-psd.pwgsc.gc.ca/Collection-R/LoPBdP/CIR-e/892-e.pdf- Feb 19, 2010), the Federal government supported the Canadian airline industry by subsidizing more than $200 million per year. But after privatization, "the 28 largest airports are run by local authorities that must pay more than $220-million in annual lease payments, says ATAC" (http://www.theglobeandmail.com/life/travel/article586517.ece- Feb 19, 2010). Government has been increasing the landing and terminal fees since then which hit the airline industry and it has been one of the contributing factor adding to an operating cost of Canadian airline industry (http://www.theglobeandmail.com/life/travel/article586517.ece- Feb 19, 2010). "Direct approach is used by ATAC, "which consists of brining organizational representativeness into direct contact with public officials" (Stanbury and Moore: 230).
"Interest groups demand direct financial assistance from government" (Stanbury and Moore: 230). For example: In 2010, ATAC has been lobbying at all three levels of government to fund $394 million for tunnel project in Calgary, "that is required to link the east LRT route to the airport by arguing that it is city's responsibility to fund for building a roadway system" (http://www.calgarysun.com/news/alberta/2010/01/30/12680246.html- Feb 19, 2010).
In 2005, ATAC demanded the transport minister to reduce airport rents and ATAC said that " we had presented such a convincing case, that several Federal Ministers, including Jean Lapierre, recognized that rent had become a major problem for airports." On May 9, 2005 Minister Lapierre declared a new rent formula which will in effect from 2010, which saved airline industry $350 million between 2006 and 2010 (http://www.atac.ca/en/files/2005_ATAC_Annual-en.pdf - Feb 19, 2010). "The force of logical and well prepared arguments will be sufficient to convince reluctant ministers and skeptical public administrators that their proposal should be adopted": Persuasiveness (Boer: 5)
In 2006, ATAC was successful in demanding a decrease in the charges imposed by NAV CANADA by 2% and the surcharge for the "Rate Stabilization Fund" was successfully eliminated and working with NAV CANADA to reduce more costs (http://www.atac.ca/en/files/ATAC-AR-ENG-061130.pdf- Feb 19, 2010).
On December 4, 2009, ATAC went to court to file a legal case against the government for "public nuisance" and demanded compensation for some of their members who will be financially affected by security measures and other restrictions that will be implemented during the 2010 Winter Olympics. Not only they used legal action to get compensation, but they also had new lobby efforts in place trying to get compensation directly from Transport Canada (http://www.atac.ca/en/media/?id=09Dec04_1- Feb 19, 2010). "Interest groups of all types have sought to use the courts to achieve their political and policy objectives" (Stanbury and Moore: 230). ATAC also demanded government to intervene to help "improve governance of airport authorities" (http://www.atac.ca/old_files/Pearson_hangover_release.pdf- Feb 19, 2010). ATAC demanded the federal government to permit a qualified mechanic to be with Border Service officers while searching the aircraft to comply with Part VII of the Canadian Aviation Regulations (CARS), which is a vital safety issue (http://www.atac.ca/en/files/ATAC-AR-ENG-061130.pdf- Feb 19, 2010).
