MONTREAL (Dow Jones)--The strength in the Canadian dollar has provided modest relief to skyrocketing jet fuel costs, acting as a "natural hedge," said Air Canada Chief Executive Calin Rovinescu.
"We have a natural hedge in the Canadian dollar," he said in an interview. "It takes a portion of our fuel hedge requirements off the table."
For many airlines, today's higher crude prices have translated into a sudden, costly boost in the price of fuel. Canadian carriers have at least benefited somewhat from the strengthening Canadian dollar, the currency in which they ..
2.
DAVID FINCH AND NORMAN O’REILLY
The debate over the heavy hit on Max Pacioretty of the Montreal Canadiens took a fascinating twist recently when Air Canada threatened to pull its sponsorship of the National Hockey League. This isn’t just about the future of hockey and sponsorship – it also tells us a lot about modern marketing and communications and how social media empowers its audience.
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Over the past year, there has been a frenzy in the Canadian media over head injuries in professional hockey. Sidney Crosby, Canada’s golden boy, has lost months to a concussion and when he will return remains uncertain. Medical researchers from Boston University confirmed that former NHL tough guy Bob Probert had chronic traumatic encephalopathy when he died at the age of 45. Then, Boston’s Zdeno Chara checked Mr. Pacioretty heavily into the boards, resulting in a fractured vertebra and severe concussion.
This is a difficult time for the NHL, as the debate about its next step rages on the sports networks and Twitter. But a new voice has entered the conversation – the sponsor’s.
Air Canada, airline sponsor of several NHL clubs and naming rights sponsor of the Air Canada Centre in Toronto, sent the following warning to NHL commissioner Gary Bettman:
“From a corporate social responsibility standpoint, it is becoming increasingly difficult to associate our brand with sports events which could lead to serious and irresponsible accidents; action must be taken by the NHL before we are encountered with a fatality. Unless the NHL takes immediate action with serious suspension to the players in question to curtail these life-threatening injuries, Air Canada will withdraw its sponsorship of hockey.”
Another sponsor, VIA Rail, also decided to engage. While distancing its statement from its sponsorship, VIA nonetheless stated that “being a sponsor gives us the right, as a stakeholder, to say what we said to the NHL today, from inside the arena if you will.”
This hard-line and very public position by a major sponsor is rare, but it is appropriate when a sponsoring company decides that an organization or personality no longer shares its corporate image or values. A number of Tiger Woods’s former sponsors made this decision.
However, we can find no precedent in which a sponsor has made such overt demands, under the guise of corporate social responsibility, including the offer to remain a sponsor if the league responds to its demands.
The strategic value of sponsorship – a promotional tool – extends beyond traditional advertising. Sponsorship is about demonstrating that a company shares the values of its target market. It is about building a deep emotional connection with the audience through what is called a halo effect, the value a sponsor receives by being associated with the product’s image.
In this context, the halo effect is powerful: Canadians are deeply passionate about hockey. Sponsors are therefore passionate about the NHL, because it offers an opportunity to build an emotional connection with a large, affluent market. This passion nets the Toronto Maple Leafs alone more than $50-million a year in sponsorship revenue.
What has motivated Air Canada and VIA to risk this sudden and public intervention? The fact that both organizations are headquartered in Montreal cannot be forgotten, because their employees are also passionate hockey fans, and the injured player in this case is a Canadien. Perhaps the companies are driven by a true concern for the violent nature of the game. Or perhaps they’ve decided that recent events have tarnished the NHL’s halo so significantly that the value of the sponsorship itself has dropped. If so, these sponsors’ positions may have more to do with Twitter and Facebook than Mr. Pacioretty or Mr. Crosby. In the world of social media, fans are no longer merely spectators; they are also active and empowered participants in issues around the game.
The companies clearly saw the opportunity, through social media, to capitalize on this event by positioning themselves on the popular side of this debate among the hockey fans who are also customers. It then becomes the job of these millions of newly empowered fans to spread the word and tell the league which side is right – one tweet at a time. Our early analysis of social media traffic suggests that the outrage of these fans, measured by volume, is almost unprecedented.
However, the league’s response to Air Canada in particular was immediate and blunt. The league said it will miss Air Canada but there are other sponsors who will be happy to fill that void – in particular, other airlines that would be happy to take the reported $20-million a year Air Canada generates from its NHL partners.
But if the league wants to use social media to promote the league, it must also be prepared for a conversation on more serious issues. Air Canada and VIA are betting on the public interest in continuing that conversation.
Both the league and these sponsors are treading in uncharted territory. The league’s recent actions on concussions suggest that it recognizes the risk to its brand’s value. When it comes to Air Canada’s threat, who will blink is anyone’s guess. But who is winning is easy: the newly empowered fan.
3. BSS rocker cheers Rush at Junos
TORONTO - Toronto indie-rockers Broken Social Scene, in an eight-man configuration, rehearsed World Sick at their Juno broadcast rehearsal at the Air Canada Centre on Friday afternoon and guitarist Brendan Canning said afterwards it just seemed like the right song to perform.
"I guess it's a good time to be playing a song like World Sick, lyrically speaking, with all that's going on, clearly the world's in need of some help," said Canning. "We're definitely not going to solve it with our song but it's a small part (we can do) as musicians or artists. It's about slightly being dismayed at what's going on around you and sort of (being) handcuffed."
BSS last played the Junos in 2006 in Halifax in a formation that was about twice the size.
"We did have the big band," said Canning. "This is basically the 2010 touring lineup. We wanted to do the 2011 Junos with kind of the band that put in the real time on the road for the Forgiveness Rock record." Canning said there are no plans to have frequent BSS members, Feist or Metric's Emily Haines, who are both presenting on Sunday night's Juno broadcast, be part of their performance.
"This song is good for the official touring 2010 lineup," he said.
As for the band's chances in their four categories (five including recording package), he's giving Arcade Fire's The Suburbs an advantage for alternative album of the year but he hopes they'll get group.
"That would be diplomatic," said Canning.
He also thinks Rush: Beyond The Lighted Stage will trump This Movie Is Broken for music DVD of the year.
"As much as I like our film and our concert DVD, you gotta give credence and credit. What are you going to do? You can't take Rush, you can't knock them off the podium. And video, I honestly haven't looked at the other nominees in video."
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