Canada is the second largest country in the world, which ranks 28th in terms of population. The population density of Canada approximately is three persons per square kilometer. Canada's 30 million population is located in the area which is 10 million square kilometers in size from the Atlantic Ocean to the Pacific. Therefore, Canada needs fast and efficient transportation for such a wide surface area and great population. There are air, surface and marine transportation in Canada. Air transportation is the most popular one because it offers fast and efficient travels with the developed route network in Canada.
             Country's air transportation industry is highly competitive because of the deregulation by government bodies in 1984. At that time, much freer regime was expressed in the National Transportation Act which accepted an air company automatically to a market if it is at least 75% Canadian owned or controlled, has enough fleets, and can meet Transport Canada's safety requirements (McArthur, 2004). This regime has created a highly advanced competitive environment where air companies can easily enter a market but hardly compete in it. For example, Roots Air failed to fill its planes and became bankrupt after a moth and a half in 2001 (Smith, 2001); Grey Hound Air, which used Boeing 727 to link Winnipeg with major Canadian cities, failed in 1997 because they didn't use the world booking system (McCarten, 1997).; Canada 3000 was also recently bankrupted. Therefore, air companies with successful marketing strategies can survive in this environment such as Air Canada (AC) and WestJet (WJ). The recent scandal between AC and WJ, where AC filed a lawsuit against WestJet for $220 million for hacking AC's confidential website and stealing commercial information ("Jetsgo," 2004), drew public attention and presented them as two active competitors. The competitive struggle of these two companies can be presented b...