Air Canada’s Flight Overbooking Scandal

Air Canada’s Flight Overbooking Scandal

On February 10^th, 2019, the CBC News investigative column highlighted the unscrupulous means that Air Canada uses through its employees to misuse the legal provisions that allow various flight companies to oversell their tickets to increase their revenues. According to CBS News (n.d.), different anonymous employers came forward to offer an insight into how the company trains the employees, especially the ticket agents, to provide false information about the availability of the booking space in the flight. The individuals who testified in anonymity asserted that it was the company’s policy to ensure that the ticket agents are prepared to handle pressure from the customers after they miss the flight to their destinations. The ticket agents are trained to ensure that the bookings supersede the requisite amount of passengers that the flights could handle on a single journey.

Owing to various testimonies, it is evident that such practice is encouraged by the company since there are several technological advancements through the use of algorithms that helps in predicting the likelihood of individuals booking the flight. The overbooking scandal emanates from the belief that the airline could increase its revenues even if some passengers cancel or miss their flights. Air Canada premise that assertion from the global provisions that allow various airline companies to oversell the tickets in a bid to prepare for such instances. However, the requirements also require the airlines to have a sound travel plan even if the individual passengers do not cancel or proceed with their flights normally. However, Air Canada and its staff do not have in place such measures.

Again, several anonymous individuals that participated in the article highlighted that the human resource department encourages the ticket agents to engage in such unethical practices and lie to the individuals blatantly concerning the scale of the ticket sales of the airline. Seemingly, it is a tradition cherished and fostered by the company’s hierarchy to increase revenue at the expense of the wellbeing of the travelers who they are supposed to ensure are satisfied in different ways. The human resource department also provides that the individuals recruited as ticket agents can handle stress emanating from such clients proportionately (CBC News, n.d.). In that case, these sales individuals are always in constant pressure and at pains explaining to the customers these decisions, costing them their reputations and creating a toxic working environment around them.

The practice of training employees to flout the laws and regulations to increase the revenue of the company has subjected the airline to multiple issues. First, being a national airline, the use of employees to flout laws in place causes it colossal damage in the image, and the brand loses the consumers’ trust to a great extent. Additionally, when the article was published, the Canadian government had initiated plans that would ensure that the affected passengers are compensated (CBC News, n.d.).  These are exclusive of the hotel bookings, costly refunds, and other expenses that the airline incurs whenever such instances occur.

Summary of the Issue

In a bid to enhance their revenues and effectively exploit the regulations allowing airline companies to oversell tickets, Air Canada employees found themselves in rather distasteful practices that could be equated to fraud. The management of the national airline embarked on an aggressive effort to overbook the flights by ensuring that the employees oversell tickets to travelers without taking into account appropriate measures. As a result, the human resource department initiated a recruitment process that would ensure that only individuals who can handle pressure from the passengers as a result of overbooking are recruited. The human resource further engaged in training the employees in ways that they could seamlessly navigate through the existing regulations and laws that govern the overselling of the tickets. Primarily, the ticket agents were trained and encouraged by the Air Canada hierarchy to blatantly lie to the customers, putting them under unwanted inconveniences. Such activities are aimed at bending the laws at the expense of expanding the revenue of the company. Again, the constant disputes between the employees and the customers when the deal goes sour often creates a toxic working environment, ruining the image of the national flight, contradicts the tenets of human resources, and is economically non-viable to the company in different ways.

The Article and the HR Practice

The CBC News investigative article illustrates how the human resource department could have overtly or covertly contributed to that scandal. Though the article does not directly mention the shortcomings of the human resource department, the practice of employing and subsequently training employees to engage in unlawful acts directly renders them accomplices in different ways. One of the essential aspects of human resource practice is to ensure that the employees work by the objectives of the corporation in place. However, the goals of the company are subject to various laws and regulations that must be followed without contempt. However, the human resource department in Air Canada’s decision to use employees as tools for bending the rules had multiple impacts on the individuals. Consequently, the image of the business brand is soiled as the exposé has enlightened the prospective customers on the unethical practices that the company engages on to expand its revenue and simultaneously disregarding the customers and the existing laws (CBC News, n.d). Further, the article alludes to the quote from the minister of transport that promised harsher penalties on such practices, spelling an economic toil on the company through compensations.

Recommendations

Though the Air Canada overbooking issue could be blamed on the hierarchy in the management, there exists one underlying human resource issue. The human resource issue in the case of Air Canada is training the employees to navigate through the legal barriers and overtake compliances put in place. Though overselling of flight tickets is allowed by the law in Canada, various provisions articulate the measures that should be in place in case all the bookings are confirmed. Air Canada’s human resource is complicit of illegally engaging in illicit practices where the ticket agents are trained and encouraged to sell flight tickets in a manner that supersedes the legally allowed quantity. Such an aspect contributes to these individuals acting as a tool meant to circumnavigate the law and enable the company to maximize its profit through illegal interventions. The practice turns a blind eye to the fact that human resource plays an essential towards compliance with the law and other regulations in place (Alexander & Papadeas, 197). However, the following are the measures that could be put in place to ensure that human resource is not used as an accomplice to illegality but rather for promoting compliance and regard to the law.

First, by offering proper education and training to the employees. In most cases, adequate education and training remain one of the most pivotal aspects of human resource function (Stewart, 51). Such training would emphasize the need for compliance, regulatory requirements, and various legal thresholds. In the case of Air Canada, such practice would ensure that the ticket agents are trained on multiple regulatory and legal requirements related to overselling of tickets, the impacts of such practices, and other essential aspects revolving around compliance with statutory and legal prescriptions. Such interventions would ensure that the employees are well conversant by several laws and regulations, as well as their rights and scope (Alexander & Papadeas, 191). Training of the employees is an essential function of the human resource that is not only vital for capacity building but also ensures that there is compliance with the existing laws and regulatory frameworks.

The other intervention is conducting various scheduled compliance audits for the employees. Most companies avoid instances of non-compliance due to the financial and reputational impacts they have on such companies. Therefore, as a remedial measure, these companies ensure that they follow up on the training and the level of compliance through carrying out several compliance audits (Alexander & Papadeas, 173). Such practice could prove beneficial to the human resource department at Air Canada in addressing the compliance shortcomings, making them evade the existing regulatory frameworks in place.

Finally, there is a need for the human resource department to put in place an effective communication platform that cuts across the organization. One of the HR functions is to communicate regulatory and legal issues that require compliance under different levels (Stewart, 36). Thus, communication should target both the executives and the lower employees. In the case of Air Canada, the HR department should put in place different communication platforms that would sensitize all the employees on the compliance regulations and defining their scope as guided by the legal provisions in place. In that regard, the individuals would be made aware of their roles, the legal requirements, and other regulations so that no employee contravenes the law and provisions at the expense of revenue to the company.

Works Cited

Alexander, Tamra. & Papadeas, Pat. The Canadian Business Law. 3^rd Edition. Emond Montgomery Publications Limited, 2018. 169-198.

CBC News. “Air Canada Employee Says Staff Trained to ‘Dupe’ Passengers at Risk of Being Bumped from Oversold Flights | CBC News.” CBC News, CBC/Radio Canada, 11 Feb. 2019, www.cbc.ca/news/business/air-canada-agents-reveal-oversell-practices-1.5008217

Stewart, Eileen B. Essentials of managing human resources. Scarborough, Ont.: Nelson Thomson Learning, 2016. 6^th Edition. 36-72