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More Turbulence For Air Canada - The T.O. Star  
User currently offlineCanadi>nBoy From , joined Dec 1969, posts, RR:
Posted (11 years 5 months 2 weeks 3 days 2 hours ago) and read 4920 times:

More turbulence for Air Canada
Airline's debt cut to junk status Shares nosedive to hit 3-year low


SUSAN PIGG
BUSINESS REPORTER

Air Canada executives were preparing yesterday to start selling a new deal to an old-style workforce as bad news just kept piling up for the country's troubled flagship carrier.

Air Canada shares continued their nosedive yesterday, hitting a three-year low of $2.51 on the Toronto Stock Exchange before rebounding to close the day at $2.65, down 42 cents.

That's on top of the 43 cent, or 12.3 per cent, drop the airline's shares suffered on Thursday after it reported what one analyst called a "gargantuan" fourth-quarter loss of $364 million and announced plans to cut $650 million in labour costs and sell off some divisions, including its struggling regional carrier, Jazz.

Yesterday, Standard & Poor's lowered its long-term corporate rating on the airline's debt to B, its fifth-highest junk grade, from B-plus.

The bond rater warned that another downgrade is possible given liquidity concerns, rising fuel costs and fears of the impact of a possible war with Iraq.

Analysts were busy reducing their forecasts for the airline yesterday, citing concerns about "the sustainability of the balance sheet," while the S&P downgrade will make it more costly for Air Canada — with debt exceeding $12 billion — to raise capital or refinance its debt.

One industry observer suggested yesterday there could be more bad news to come — strikes or work-to-rule action from frustrated union workers who face a March 15 deadline to agree to major concessions or, many fear, face the possibility of pink slips.

"The big risk here is a strike" among a workforce that is already legendary for its "surly service," said Joseph D'Cruz, director of the aerospace executive MBA program at the University of Toronto's Rotman School of Management.

"All of this could just push passengers more and more to (low-fare rival) WestJet."

A letter from Air Canada chief executive Robert Milton to some 40,000 employees of the airline, its regional carrier Jazz and other Air Canada subsidiaries said it all.

"I urge you to let your union leadership know now that you are willing to recognize and accept the new realities of our industry and want us to change the way we do business permanently."

That means giving up 65 years of hard-won union rules, some based on safety concerns, that Milton says have increased Air Canada's labour rates to about twice that of rival WestJet and are crippling its ability to compete with low-fare carriers like Jetsgo and CanJet.

Air Canada's managers will start selling that critical message directly to employees Monday, explaining the company's recent financial results and why the airline — despite having more than 65 per cent market share — is having difficulty.

Those executives will not only be facing the ghost of Canadian Airlines — which Air Canada acquired in 1999 — but the skepticism of a workforce plagued by schisms between unions and within unions.

"There's a disconnect between the membership and the leadership. You've still got long-term animosity between former Canadian and Air Canada employees and there's internal friction between more senior and more junior employees over seniority," said York University business professor and industry expert Fred Lazar.

"There are still a lot of employees who think the government will bail the airline out (if the effort to win union concessions fails). You put all of that together and this is going to be a hard sell for Robert Milton."

Federal Transport Minister David Collenette said he's "very concerned" about the state of Air Canada.

And while there's no doubt some of the airline's problems are deeply rooted in Ottawa, Collenette faces a difficult balancing act.

"We're prepared to be as helpful as we can," Collenette said in an interview. "We have to keep our eye on the ball on the viability of Air Canada on the one hand, and a competitive marketplace on the other."

Collenette likes to point out that competition has improved since Canada 3000's failure in November, 2001. WestJet, Jetsgo and CanJet have eroded Air Canada's market share from its high of about 80 per cent in late 2001 to about 65 per cent today. But he's keenly aware that any competitive gain only causes more pain for Air Canada.

Collenette's concerned there may now be too much capacity in the Canadian marketplace — a dangerous phenomenon that is only adding to Air Canada's problems, leading to fare slashing and half-empty planes.

"It seems to me that Air Canada's problem is that it has a cost structure of another era and is trying to compete in a modern environment. I understand where management is coming from. They've got to reduce those costs."

But Ottawa "has contributed a lot to the mess that Air Canada is in," says Lazar, pointing to the merger with failing Canadian Airlines in 1999 and the tough no-layoff conditions Ottawa forced on the company that expired last month.

There's a lot the Liberal government could do — and quickly — to ease Air Canada's financial pain while also helping its competitors, says Lazar:

Ease or drop the $250 million Ottawa will collect in rent from the country's airports this year, fees that are passed on to airlines by airport authorities.

Put controls (Collenette says legislation is about to be introduced) on airport fees and airport spending.

Lower the $24 return security surcharge — now the highest in the world — that has encouraged passengers, especially on short-haul routes, to take the car or train instead and contributed to the $90 million loss suffered by Jazz last year.

Remove, at least temporarily, the excise tax on jet fuel that Lazar estimates costs Air Canada at least $40 million a year.

Reform or replace the Canada Industrial Relations Board, a federal labour board that has had no success mediating internal union disputes.


48 replies: All unread, showing first 25:
 
User currently offlineYyz717 From Canada, joined Sep 2001, 16245 posts, RR: 56
Reply 1, posted (11 years 5 months 2 weeks 3 days 1 hour ago) and read 4880 times:

Typical socialist crap from a socialist newspaper.

But Ottawa "has contributed a lot to the mess that Air Canada is in," says Lazar,

Nope. Incorrect. AC's problems are self-inflicted from an inefficient work force, to a high debt level, to a poor decision to buy out CP.

Ease or drop the $250 million Ottawa will collect in rent from the country's airports this year, fees that are passed on to airlines by airport authorities.

Why? TS and WJ can make money under the same envrionment. Why can't AC?

Lower the $24 return security surcharge — now the highest in the world — that has encouraged passengers, especially on short-haul routes, to take the car or train instead and contributed to the $90 million loss suffered by Jazz last year.

Once again, why? WJ and TS can make money with these same fees. Moreover, the security cost for a passenger flying from YYZ to YUL is the same as to YVR.....there should be no discount for short routes.

Remove, at least temporarily, the excise tax on jet fuel that Lazar estimates costs Air Canada at least $40 million a year.

Again, no. Excise taxes on fuel force all companies to conserve fuel usage.

In short, the fed govt should butt out of AC's problems completely. IMHO.




Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineCanadi>nBoy From , joined Dec 1969, posts, RR:
Reply 2, posted (11 years 5 months 2 weeks 3 days 1 hour ago) and read 4864 times:

Yyz717, I agree with each of your points with the exception of the
CAD$24.00 security tax. Note that Clive Beddoe himself has had to cut back on frequency on certain WJ short-haul routings due to the security tax issue.
He too is against this tax, and would like to see it either reduced or eradicated
by YOW.

I was amused when reading this article, wondering if Susan Pigg was taking dictation from Uncle Miltie himself!



User currently offlineSafeFlyer From Canada, joined Jan 2001, 627 posts, RR: 5
Reply 3, posted (11 years 5 months 2 weeks 3 days 1 hour ago) and read 4837 times:

Once again, why? WJ and TS can make money with these same fees.

Even If they make money, that doesn't mean they wouldn't like to see the tax lowered as many Canadians have observed no changes in airport security since it's implementation.

Remove, at least temporarily, the excise tax on jet fuel that Lazar estimates costs Air Canada at least $40 million a year.

Certainly not. Even If it was for all Canadian airlines.

Typical socialist crap from a socialist newspaper.
This a civil aviation forum. Comments like that belong in the Non-Aviation forum.


User currently offlineCanadi>nBoy From , joined Dec 1969, posts, RR:
Reply 4, posted (11 years 5 months 2 weeks 3 days ago) and read 4830 times:

"This a civil aviation forum. Comments like that belong in the Non-Aviation forum".

Excuse me? I believe Yyz717 was exercising his democratic right to express his opinion of a newspaper article posted IN the civil aviation section. Who appointed you judge and jury?


User currently offlineCessnapimp From Canada, joined Oct 2001, 1320 posts, RR: 20
Reply 5, posted (11 years 5 months 2 weeks 3 days ago) and read 4806 times:

I am suscribed to the Star. I was, this morning again after reading that article, arguing out loud to my roomates that I want to make a switch due to the poor poor sensationalistic buisness reporting.

Examples off the article:"One industry observer said", and "That means giving up 65 years of hard-won union rules, some based on safety concerns,"

Poor... poor...


User currently offlineCaptaingomes From Canada, joined Feb 2001, 6413 posts, RR: 56
Reply 6, posted (11 years 5 months 2 weeks 3 days ago) and read 4799 times:

I will disagree with Neil on the security tax issue, but I've rambled enough on that in these forums. I also believe that Ottawa has in fact contributed to a lot of the mess at AC these days. I'm a true believer in the market system, with as minimal intervention as possible. Ottawa should not bail out or work out deals in favour of Air Canada due to the situation it is in. However, it's especially at times such as these that it is prudent that Ottawa look at their policies (i.e. security tax) and see what works and what doesn't. Ottawa also put pressure on AC to purchase Canadi>n, I'm sure Air Canada wanted to just let them die, and buy off the used market whatever they could get their hands on. It's also important to realize that the past with Ottawa bailing out Air Canada repeatedly had not helped the situation. It's with points such as those that Lazar makes the statements he makes (at least I'm assuming).


"it's kind of like an Airbus, it's an engineering marvel, but there's no sense of passion" -- J. Clarkson re: Coxster
User currently offlineCanadi>nBoy From , joined Dec 1969, posts, RR:
Reply 7, posted (11 years 5 months 2 weeks 3 days ago) and read 4796 times:

Err......Cessnapimp, with all due respect, you're backtracking just a t a d
and are now expressing your own, "non-aviation" comment?  Smile/happy/getting dizzy But that's
okay, we're all one big Canadi>n...oops me!...Canadian family here!

I made a boo-boo in my earlier reply. Of course, the comments about
the union concerns would not be comin from "Miltie" himself!

Now, as for moi (as if anyone cares! LOL), I very much admire and respect the writing and viewpoints in the Globe and Mail, especially the weekend edition. No Saturday morning is complete for me without (in no order):

a). Strong kick-ass morning coffee
b). Toasted bagel (sesame seed) with cream cheese / extra crunchy
peanut butter
c). Big kick-ass glass of freshly squeezed orange juice
d). A loooong, hot shower
e). More kick-ass coffee, whilst perusing the weekend Globe and Mail
I especially enjoy their book review section.


User currently offlineHmmmm... From Canada, joined May 1999, 2104 posts, RR: 5
Reply 8, posted (11 years 5 months 2 weeks 3 days ago) and read 4789 times:

No question about it. The Toronto Star is a left-wing rag. It's a great newspaper with a great tradition, with high quality writing, but, since the '70s, the Star is left of center, big-time on everything. A great wheels, sports, and classified sections, but the daily editorial is terribly predictable.

Their editorials either attack George Bush, the conservative Ontario government, the school boards, or their favorite whipping boy, the Toronto police force. The only way to get the Toronto Star to look upon you kindly is to be a French-speaking, aboriginal lesbian poverty-activist and artist-writer living on social assistance protesting US foreign policy. In which case, they then nominate you for a govenor-generals award. Unless you are a French-speaking, aboriginal lesbian poverty-activist and artist-writer protesting US foreign policy, who is also a member of the Toronto Police Force. Then they'd slam you as a racist storm trooper out of control.

But like I said, a great sports, wheels, and classified sections!



An optimist robs himself of the joy of being pleasantly surprised
User currently offlineCanadi>nBoy From , joined Dec 1969, posts, RR:
Reply 9, posted (11 years 5 months 2 weeks 2 days 23 hours ago) and read 4774 times:

CaptainGomes wrote:

"Ottawa also put pressure on AC to purchase Canadi>n, I'm sure Air Canada wanted to just let them die, and buy off the used market".

True. AC was somewhat coerced into purchasing the dying Goose. And as much as I HATE to say this, from a purely business standpoint, the best situation for AC would have been to sit back and wait it (Canadi>n) out.
Ottawa's standpoint was (in my opinion) looking good in the eyes of the
Western voters by salvaging Canadi>n jobs, with little attention paid to
the repercussions of a too-large-for-the-demographics factor.


User currently offlineCanadi>nBoy From , joined Dec 1969, posts, RR:
Reply 10, posted (11 years 5 months 2 weeks 2 days 23 hours ago) and read 4775 times:

Hmmmm wrote:

"But like I said, a great sports, wheels, and classified sections!" (The Star)

Yeeeesh, and don't forget, a superlative comics section! "Mother Goose and Grimm", to name just one! And WHO could resist the family goings-on in
"Hi & Lois"?


User currently offlineCanadi>nBoy From , joined Dec 1969, posts, RR:
Reply 11, posted (11 years 5 months 2 weeks 2 days 23 hours ago) and read 4756 times:

"Unless you are a French-speaking, aboriginal lesbian poverty-activist and artist-writer protesting US foreign policy, who is also a member of the Toronto Police Force. Then they'd slam you as a racist storm trooper out of control."

As a French-speaking, Poutine cookin, aboriginal Lickin Lesbian who raises funds for homeless and needy underprivileged sexy people by selling my freelance anti-Bush articles after my long days writing traffic tickets, I must say I am OUTRAGED by your comment!!



User currently offlineYyz717 From Canada, joined Sep 2001, 16245 posts, RR: 56
Reply 12, posted (11 years 5 months 2 weeks 2 days 22 hours ago) and read 4731 times:

Thanks for your support Canadianboy. I am EXTREMELY suspicious of most TO Star writers, including the business writers. The TO Star is an extreme reactionary left wing rag. They have had a deliberate anti-West, anti-business, pro-government interventionist editorial policy for decades & have not wavered from it.

No Saturday morning is complete for me without (in no order):
a). Strong kick-ass morning coffee
b). Toasted bagel (sesame seed) with cream cheese / extra crunchy
peanut butter
c). Big kick-ass glass of freshly squeezed orange juice
d). A loooong, hot shower
e). More kick-ass coffee, whilst perusing the weekend Globe and Mail
I especially enjoy their book review section.


Errr....sounds like my Sat morning if I'm around. Just throw in the National Post with the Globe and Mail.







Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineMx5_boy From , joined Dec 1969, posts, RR:
Reply 13, posted (11 years 5 months 2 weeks 2 days 18 hours ago) and read 4688 times:

Guys,

Does no-one particularly care about workers rights, their ability to survive on reduced wages and living standards?

Whilst they must be competitive, sure no-one cannot see writing on the wall for what it is worth? At present there is plenty of talented and well experienced crews, ground staff and other ancilliary workers. What is going to happen when that generation of *staff* who have devoted themselves to having an airline career eventually retire, leave or are treated so badly they'll never want to work in an airline again?

And the push will continue till wages and conditions are so bad only very ordinary people will want to work for an airline?

Pay peanuts get monkeys.

Todays excellent pilots will no long wish to fly, but will make sure they direct their intelligence in other directions - probably a desk with a $150k job.

mb



User currently offlineCessnapimp From Canada, joined Oct 2001, 1320 posts, RR: 20
Reply 14, posted (11 years 5 months 2 weeks 2 days 17 hours ago) and read 4662 times:

I was always told (and therefore belived) that you had to pay professionals what they are worth in order to acheive an effective workforce.

In essence, that sounds noble, you will be able to attract higher brain power and have an "at- ease" workforce, ready to work for you.

Is flight attendant and pilot (speaking from my point of view) a profession? Well, not exactly! It's a lifestyle. You do things differently than a 9- 5er desk jockey.

It also entices that you have certain sacrifices that will have to be made in difficult times. Will the workforce have to accept, or ideally volunteer concessions? Yes. The "i've seen it all before and it turned out okay" attitude will not work this time. No more reserve to fall back on. One has only to look at the fallen great ones, Pan Am, Eastern and especially La Sabena and Swissair. They were chanting to themselves "everything's gonna be allright" to themselves." the gov. will not let this happen... not to a flag carrier.

24 smackeroos is pretty harsh, but an easy scapegoat to our problem. We are now close to 150 employees per aircraft operated. CO only has 114. Westjet, well, I'd like to know.

I do believe we can get through this without furlough though. It will take brainpower, a little time and Gordon Bethune.

What's my point, I have no idea... tonight I'm just typing random thoughts so I can sleep better, for tomorrow is a planespotting day! Yay! Canadi>nBoy(I will permit you the >), you should come on over, we'd be happy happy to chat along with a guy with strong ties to aviation. No idea you were french! Alors viens- t'en donc demain, le groupe est très sympathique. Je suis certain que t'as des bonnes "histoires de galley"!

Grégoire "I promise this is my last post tonight" Lefèvre


User currently offlineYyz717 From Canada, joined Sep 2001, 16245 posts, RR: 56
Reply 15, posted (11 years 5 months 2 weeks 2 days 17 hours ago) and read 4649 times:

I hate to burst your bubble MX5-boy, but workers' right (other than safety) are fast becoming secondary to shareholder rights, as they should be.

The LCC's are showing the world how airlines can be run efficiently, and the only reason that they are successful is because the customer (whether in Canada, the US, Australia, or Europe) is more interested in price than service.

Look at Australia with the highly regarded AN service.....you probably could not find a more inefficient, poorly run airline in the world. It has effectively been replaced by the profitable & successful Virgin Blue which simply pays its employees what the revenue base can cover.

Air travel is becoming a mass transit, commodity based service.....the spoils will go to the lowest cost provider. This does not mean that safety is compromised.

Cessnapimp above highlighted just how inefficient AC is.....150 employees/aircraft while CO has 114....CO is not even a LCC and yet operates a full service airline with 24% fewer employees/aircraft than AC!








Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineCanadi>nBoy From , joined Dec 1969, posts, RR:
Reply 16, posted (11 years 5 months 2 weeks 1 day 3 hours ago) and read 4581 times:

YYz717 wrote:

"I am EXTREMELY suspicious of most TO Star writers, including the business writers. The TO Star is an extreme reactionary left wing rag. They have had a deliberate anti-West, anti-business, pro-government interventionist editorial policy for decades & have not wavered from it."

No argument from me there. Their "expose" on T.O. police racial profiling a short while ago really knocked me for a loop. It was so bloody biased, and NO
police viewpoint or point of reference at all there. My brother and a good friend of mine, both O.P.P., steadfastly refuse to purchase this paper. And Rosie Dimanno(sp?).....aye yi yi yi yi!

And......

"Errr....sounds like my Sat morning if I'm around. Just throw in the National Post with the Globe and Mail."

Hmmm, yes, I have no doubt you are out on Friday nights, trolling the streets of our fair gotham, using your, ohhhh suave sophistication and charm to entice some unsuspecting/niave poor soul. Yesssh, the Post. Although, with cutbacks at that publication, it aint quite what it used to be. But, great journalists and on-target articles. I have to admit I am a die-hard Christie Blatchford fan.

And just so ya know......I love my coffee steamin hot....with p l e n t y of
straight-from-the-backwards-amish-farm cream. Ummmmmmmmmmm.








User currently offlineCanadi>nBoy From , joined Dec 1969, posts, RR:
Reply 17, posted (11 years 5 months 2 weeks 1 day 1 hour ago) and read 4542 times:

Cessnapimp wrote:

"Canadi>nBoy(I will permit you the >), you should come on over, we'd be happy happy to chat along with a guy with strong ties to aviation. No idea you were french!"


Me no Francois-Canadienne, monseiur! Me Irish Catholic with a wee dash of Spanish! Me oh so sexy and suave ex-steward/sky-mattress/trolleypusher!

Me too sexy for Milan, too sexy for Japan!
Too sexy for Galley duty
I'm an ex sky-hag, ya know what I mean?
And I do my little walk on the Airbus
Yeah on the Airbus
On the Airbus
Ohhhhhh, I shake my little tush on the Airbus

Hmmmm, if ONLY I could stay away from those Goddamned buffet tables at the Mandarin AND Amato Pizza on College Street...oh hell, ALL of College
Street!

Thanks for your "blessing" in regards to the ">" eh! Yes yes, I know, I know, get my brain outta da past and face the future. But...one must adhere to our rich Canadian aviation history and be the "keeper of the flame", no?

I know, I know I really should haul my jumpseat ass over to Pearson and meet up with the motley GTAE crew one of these fine days, and besides, T1-roof days are numbered.

I must say that I would find myself amongst exceptionally good company, what with the YYZ (and GTA) gang here whom I have never met but have had the good fortune to get to somewhat know (and to be educated with every post and thread they type) GMonney, Awspicious, Captaingomes, AirCanadaMn, Rootsgirl, Dripstick, Slawko, Rindt, you-Cessnapimp, Lasbagman (goota love them ex-Canadi>ners, eh?) Oh, and.......uh......err......umm........
you,Yyz717  Smile/happy/getting dizzy Just joshin ya. AND anyone else in the Great White Aviation North whom I neglected to mention. Each of you, all of you, are, in my opinion amongst the most educated, knowledgeable, insightful and interesting and thank God LIBERALLY minded people on this entire website. I mean that sincerely. But then I suppose I guess its no coincidence that we all happen to be CANADI>N!!! (couldn't resist!!).

I do hope to one day soon have the absolute privilege and pleasure of meeting all of you and standing on the roof of T1, doing, well,
as the AmercianAirlines (pardon the non-patriotic reference) song goes:
"doin what we do best!"

Ciao for now, my fellow Canuckbirds.

Canadi>nBoy
YYZ










User currently offlineSquigee From Canada, joined May 2001, 652 posts, RR: 4
Reply 18, posted (11 years 5 months 2 weeks 1 day ago) and read 4497 times:

Ignoring the banter about certain newspaper's ideologies (which is still entertaining!), I think it comes down to one thing:

Bad management decisions will always come back to haunt you!

  • 1. Air Canada's Purchase of Canadian
  • 2. Their baffling decision to spend millions on a rebranding campaign for Jazz, only to turn around and try to sell it (Which begs the point, if it's not making money for Air Canada, who would want to buy it?)
  • 3. Who's wise decision was it to start not one, but TWO new airlines! Imagine the staggering costs involved... It really makes you think- if Air Canada couldn't make one airline profitable, what makes them think they could make three?

    Air Canada's only hope is to ignore the short range market, which they have little hope of competing with WJ in, and instead focusing on the long range market, something I think most people will agree they are good at.

    Mr. Milton: Your company is no longer financed by the government. Stop acting like it is!



  • Someday, we'll look back at this, laugh nervously, and then change the subject.
    User currently offlineKdonohue From Canada, joined Sep 2001, 373 posts, RR: 0
    Reply 19, posted (11 years 5 months 2 weeks 22 hours ago) and read 4465 times:

    Squigee,

    You make an interesting comment about AC abandoning the short range market. But then that would leave WestJet with a virtual monopoly in that segment. Is that what Canadians want?

    Yes, AC's purchase of Canadian might be seen as bad business move. But Air Canada was under a lot of pressure to prevent a hostile takeover from Onex. To prevent Onex from acquiring Air Canada, AC managment were forced to present a counter-offer. You can bet that the only thing AC wanted was the Canadian's lucrative Asian routes. Do you really think they wanted CP's debt, employees? Do you know how costly it has been to merge the two airlines?

    If we lived in a perfect world, then the federal government would have let CP go bust and then let Air Canada and others come in and pick up the pieces. But because the government and the public is too concerned over letting Air Canada become too big and successful, we knee cap them. It's really quite hillarious and we never seem to learn from history.

    Can Air Canada improve its practices? Of course it can, but let's let them run their business, so we can have a strong international airline, one that can afford to upgrade its services.

    People keep asking why WestJet can succeed and Air Canada can't? It's more simple than people want to think.

    WestJet has a totally different cost structure (non-union), and began with a different culture in a different time. Air Canada has been carrying around 65 years of baggage. WestJet has successfully served a niche. Is it any better? Maybe, maybe not, but it's difficult to make comparisons about two distinctly different operations.

    A friend told me recently that he tries to hate Air Canada, but then admitted that he really hasn't had any really bad experiences. Oh, I'm sure some have had bad experiences with Air Canada but we've all had good experiences with them as well.

    What we need in Canada are strong airlines. And the government and public need to understand that a healthy industry, one in which the airlines are profitable is healthy for the country as a whole.

    K.


    User currently offlineYyz717 From Canada, joined Sep 2001, 16245 posts, RR: 56
    Reply 20, posted (11 years 5 months 2 weeks 20 hours ago) and read 4428 times:

    But then that would leave WestJet with a virtual monopoly in that segment. Is that what Canadians want?
    Why is a potential WJ monopoly any worse than the current AC monopoly that many domestic routes rely upon? No monopolies are good but I'd much rather have one that was developed via private sector machinations (WJ-only routes, for example) as opposed to govt-imposed or govt-subsidized dictates (AC-only routes, for example).

    Can Air Canada improve its practices? Of course it can, but let's let them run their business, so we can have a strong international airline, one that can afford to upgrade its services.

    AC is already a private sector carrier free to make its own operational decisions. The reason they are failing is due to their own incompetent mgmt & intransigent unions.

    WestJet has a totally different cost structure (non-union), and began with a different culture in a different time. Air Canada has been carrying around 65 years of baggage.

    Don't make excuses for AC. There's no "business rule" that older businesses carry around inefficient baggage. AC's higher cost structure than WJ is simply due to poor mgmt and inflexibility.

    WestJet has successfully served a niche. Is it any better? Maybe, maybe not, but it's difficult to make comparisons about two distinctly different operations.

    From my perspective, they're very SIMILAR operations. They both offer a commodity product, flying from A to B. If AC chooses to have a higher cost structure, that's their problem.

    What we need in Canada are strong airlines. And the government and public need to understand that a healthy industry, one in which the airlines are profitable is healthy for the country as a whole.

    No, Canada does not need "healthy" airlines. We need a "healthy" industry. Any private sector industry unhindered by govt intervention will have a mixture of "healthy" and "unhealthy" competitors....as we have now. The Canadian airline industry is in the hands of the private sector.....let it evolve as it is doing now....that is the most efficient solution.



    Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
    User currently offlineSquigee From Canada, joined May 2001, 652 posts, RR: 4
    Reply 21, posted (11 years 5 months 2 weeks 19 hours ago) and read 4403 times:

    Yyz717 climbed into my head and took my thoughts!

    Great post, 717, you're right on the money  Smile



    Someday, we'll look back at this, laugh nervously, and then change the subject.
    User currently offlineCaptaingomes From Canada, joined Feb 2001, 6413 posts, RR: 56
    Reply 22, posted (11 years 5 months 2 weeks 19 hours ago) and read 4395 times:

    I also agree with Yyz717, except on the point about the Air Canada and old baggage it's carrying around. Air Canada is a big dinosaur business, and seems to change very slowly. This is a result of its massive size, and yes also due to the fact Air Canada used to be a crown corporation. It takes time for Air Canada to adopt new policies, etc to make it a much more lean operation with a more competitive cost structure. As such, yes the 65 years of baggage is a valid argument. Tie that in with the restrictive unions, and you have a very cumbersome operation.

    Canadi>nBoy, you really ought to meet up with us one of these weekends! Enough of the excuses!



    "it's kind of like an Airbus, it's an engineering marvel, but there's no sense of passion" -- J. Clarkson re: Coxster
    User currently offlineLymanm From Canada, joined Jan 2001, 1138 posts, RR: 1
    Reply 23, posted (11 years 5 months 2 weeks 18 hours ago) and read 4382 times:

    "The reason they are failing is due to their own incompetent mgmt & intransigent unions."

    Correct, especially regarding the unions. However, there is simply no way you can deny Ottawa's role concering AC's current sitatution. (And no, I'm not refering to the 24$ security tax). Ottawa did not let those free market forces you keep refering to act when it bailed out CP on numerous occasions, prolonging a predictable death while putting AC at a disadvantage. Nor did Ottawa let market forces act when they put undue influence on AC's boardroom to purchase CP in order to rescue western jobs. Suggesting that all other Canadian carriers operate in the same environment is delusional - I would argue that Ottawa tries desperately hard to disassociate itself from AC much as possible. How many complaints filed with the Competition Bureau against AC ended in AC's favour? Once again, Ottawa not letting free market forces operate.

    I find it odd you keep refering to a utopia where there is no government intervention (thus acknowledge that it currently exists), yet refuse to admit that government intervention is a factor putting AC in it's current mess.

    "Don't make excuses for AC. There's no "business rule" that older businesses carry around inefficient baggage."

    No, but there is such a thing as unions. Look at our young Canadian LCCs and union penetration. Then look at AC and CP (old companies) and look at union penetration. Ideally, wages would never go up, people would never expect a promotion and employees would never care for such things as job security and pension plans. Unfortunately or fortunately (depending where you stand!), people are not robots and eventually, unions are formed and such plans are implemented. Obviously there is a difference between acting irresponsibly as a union (as is the case with certain AC unions) but fundementally, older companies will always have higher cost structures that newer companies because of union penetration.

    "If AC chooses to have a higher cost structure, that's their problem."

    Oh sure! Milton wakes up in Westmount and says to himself "What a beautiful morning! I am deeee-lighted I've chosen to have the highest cost structure in my industry!"



    buhh bye
    User currently offlineLymanm From Canada, joined Jan 2001, 1138 posts, RR: 1
    Reply 24, posted (11 years 5 months 2 weeks 18 hours ago) and read 4384 times:

    btw - I am refering to yyz717 when I saw "you". Just thought I'd clarify that, I forgot to mention your name. Look forward to the response! hehehe


    buhh bye
    25 Spyderz : While unions do seem to play integral parts in airlines, one of the most successful airlines of all time, Southwest Airlines are unionized. Its a perc
    26 Captaingomes : WestJet was formed in 1996, so it is definitely a very young company. WestJet has also worked hard to create a positive working environment for employ
    27 Captaingomes : Spyderz, I never saw regulation first hand, so I can't really comment on how things have changed in the deregulation process. However, I can't be too
    28 Lymanm : "While unions do seem to play integral parts in airlines, one of the most successful airlines of all time, Southwest Airlines are unionized. Its a per
    29 Yyz717 : What yall have to remember is that a "healthy" industry implies constant change with some airlines doing well and some fairing poorly, AT ALL TIMES! T
    30 Lymanm : "Therefore, why not go to total airline regulation instead of this pseudo de-regulated industry we are currently in that still has large government co
    31 Lymanm : "Once again Lymanm....I still think you're making excuses for AC" Perhaps I am. I just don't feel right blaming someone for something they largely hav
    32 Yyz717 : Bad analogy, but I see your point. However, forget about the govt for a sec.....look at all the mistakes that Milton has made.....buying CP, not negot
    33 Canadi>nBoy : Captaingomes wrote: "I also agree with Yyz717, except on the point about the Air Canada and old baggage it's carrying around. Air Canada is a big dino
    34 Post contains images Canadi>nBoy : Yyz717 wrote: "AC is already a private sector carrier free to make its own operational decisions. The reason they are failing is due to their own inco
    35 Slawko : Unfortunatly CanadianBoy I cant agree with you about WJ and unionville.....Iv'e spoken with a few people there, mostly pilots, and things are starting
    36 Lymanm : As someone pointed out above, a union doesn't have to wreak UA/AC-style doom on an airline. SWA does quite well with their unions.
    37 Kdonohue : Why when anyone has an argument that supports Air Canada, does Yyz717 say they are making excuses for the airline? Do we only want one-sided arguments
    38 Yyz717 : Why when anyone has an argument that supports Air Canada, does Yyz717 say they are making excuses for the airline? Do we only want one-sided arguments
    39 Kdonohue : Yyz717, Educate me a little. Tell me how AC willingly bought Canadian. I have no problem discussing issues, but it seems that anytime someone supports
    40 Yyz717 : AC willingly bought CP. It's a fact. As a private sector corp, AC is immune to government pressure of any sort to pursue any acquisitions. AC is answe
    41 Slawko : Neil you are right AC is immune to government pressure of any sort to pursue any acquisitions. But that doesnt mean that they can't make deals with th
    42 Canadi>nBoy : Canadi>nBoy wrote (in response to a posting by Yyz717): "And that, folks, in a nutshell, says it all here. " Yyz717 responded: "Whats your point Canad
    43 Yyz717 : Don't be so defensive. I was merely stating that you summed up the argument/discussion re this topic very well. I was agreeing with you! Cool, but I w
    44 Canadi>nBoy : "Cool, but I wasn't being defensive. Just asking. You can read comments ~softly~ or HARD!" Ohhhhhhh.........beleive ME, Daddy Long-Legs......I read an
    45 Yyz717 : Well, just dont aim your THRUST in my direction!
    46 Post contains images Canadi>nBoy : No worries there, man. My doctor has advised me to stay away from junk food of all types. Sheeesh! Talk about an ego! Talk about a, pardon the pun, sw
    47 Post contains images Mark_D. : LOL, you two I agree with Canadi>anBoy though, Milty was caught up a bit in the vortex of Ottawa politicking, rather than just making a simple 'busin
    48 Yyz717 : Milton is paid big bucks by the BOD to manoeuver thru the Ottawa politicking & execute the best decisions for AC. In this regard, he is an abject fail
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