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Air Canada To Buy 717's, CR9's, 318's!?  
User currently offlineCessnapimp From Canada, joined Oct 2001, 1320 posts, RR: 19
Posted (11 years 6 months 2 weeks 2 days 10 hours ago) and read 7141 times:

Well, there's somethin' you don't read every day.

In this Saturday's Financial Post:

Paul Vieira
Financial Post, with files from Bloomberg News


Saturday, April 12, 2003


Air Canada, along with three members within its Star Alliance, are in talks with a consortium of regional jet makers to strike a multi-billion-dollar deal to buy up to 200 planes -- a key move for the insolvent airline in its efforts to revamp its fleet and restructure its organization.

But the Montreal airline said any jet purchases are conditional on receiving approval for a restructuring plan it will try to develop while under protection from creditors.

The Montreal airline said it has teamed up with Deutsche Lufthansa AG, Scandinavian Airlines System and Austrian Airlines Group to negotiate and evaluate regional jets from at least four manufacturers, including another Montreal company, Bombardier Inc.

A potential deal would be divided into two parts: a firm order for 100 planes, with an option to acquire 100 more. Early estimates value the purchase of 100 of the most expensive regional jets available -- the Airbus A318 -- at US$4.5-billion. Nonetheless, the order will be a boon for the struggling aerospace industry.

Besides Bombardier, the manufacturers involved in the Star Alliance talks are Airbus SAS, Boeing Co. and Bombardier arch-rival Embraer Brasileira de Aeronautica SA.

By joining forces, the Star Alliance members are trying to extract a better deal from the manufacturers and share in the benefits of owning a common aircraft.

It believed to be first time a group of major airlines have come together to go plane shopping together. Star Alliance members have worked together previously on information technology initiatives and the bulk purchase of other in-flight accessories, such as blankets and pillows.

"The carriers have similar requirements for equipment," said Knut Lovstuhagen, a spokesman for Star Alliance. "The idea is to bring cost savings."

Laura Cooke, a spokeswoman for Air Canada, said the carrier's decision to join in on the Star Alliance negotiating team was based on "addressing current and future needs" for the airlines' involved.

"But any final commitment would be made by the individual carriers on their own timetable," Ms. Cooke said yesterday.

Moreover, she said Air Canada, currently under bankruptcy protection, would only commit to buy regional jets after "the adoption of a plan of restructuring."

Robert Milton, Air Canada's chief executive, has said as part of the airline's restructuring under the Companies Creditors' Arrangement Act, he wants to revamp the carrier's fleet -- by retiring smaller planes such as the Boeing 747-400 and 737-200, and the BAE 146, and adding more regional jets, such as CRJ-50s and 90-seat aircraft.

That's also been reiterated by John Luth, the U.S. airline restructuring expert hired to advise Air Canada.

Sam Barone, president of Ottawa consultancy Transportation Partners, said regional jets would give the airline more flexibility.

"You maintain schedule integrity, but you operate more efficient aircraft to meet demand," Mr. Barone said. "You incur the same number of flights, but not the same number of seats." He added that revamping the fleet with an emphasis on regional jets was in line with Mr. Milton's objectives on controlling costs at the airline.

By reconfiguring the fleet by using similar planes, airlines can save on maintenance and the purchase of parts. Also, pilots on regional jets are paid less than pilots on wide-body aircraft.

Sources say the planes that might be purchased include the Airbus A318, Boeing's 717 and Bombardier's CRJ700 or CRJ900.

"[The joint purchase is] going to happen, it's just a matter of when," Jim Phillips, head of Boeing's 717 program, said in an interview, adding the consortium has discussed buying as many as 50 717s, which each cost as much as US$39.5-million.

John Paul Macdonald, a spokesman for Bombardier's aerospace unit, declined to comment.

Also yesterday, in a message to Air Canada employees, Mr. Milton said management and its advisors are working on a restructuring plan, which would be released in the coming weeks.


45 replies: All unread, showing first 25:
 
User currently offlineCaptaingomes From Canada, joined Feb 2001, 6413 posts, RR: 55
Reply 1, posted (11 years 6 months 2 weeks 2 days 9 hours ago) and read 7010 times:

I really don't see the A318 winning this, the CRJ has the best chance, followed by the 717. But I think this is a step in the right direction for Air Canada.  Smile Thanks for the link Greg!


"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 offlineBA From United States of America, joined May 2000, 11153 posts, RR: 59
Reply 2, posted (11 years 6 months 2 weeks 2 days 9 hours ago) and read 6991 times:

Robert Milton, Air Canada's chief executive, has said as part of the airline's restructuring under the Companies Creditors' Arrangement Act, he wants to revamp the carrier's fleet -- by retiring smaller planes such as the Boeing 747-400 and 737-200, and the BAE 146, and adding more regional jets, such as CRJ-50s and 90-seat aircraft.

LOL, you can always resort to the media when you want some humor.  Smile



"Generosity is giving more than you can, and pride is taking less than you need." - Khalil Gibran
User currently offlineDC-10 Levo From United Kingdom, joined Nov 2001, 3432 posts, RR: 3
Reply 3, posted (11 years 6 months 2 weeks 2 days 9 hours ago) and read 6978 times:

 Big grin Big grin Big grin by retiring smaller planes such as the Boeing 747-400 . Hopefully this is just a mistake.

DC-10


User currently offlineCessnapimp From Canada, joined Oct 2001, 1320 posts, RR: 19
Reply 4, posted (11 years 6 months 2 weeks 2 days 9 hours ago) and read 6963 times:

I laughed at that one too! Hehehe.

Air Canada is only one of four members organising a "package buy" if I understand the article correctly. For all we know, they could be getting only a handfull of CJ9 in the process. Jungle jets at AC? Could you imagine? Teehee!

Are you done your exams today Nuno? In any case good luck and gimme a shout if you want to go spotting. Ciao!

Grégoire


User currently offlineLGB Photos From , joined Dec 1969, posts, RR:
Reply 5, posted (11 years 6 months 2 weeks 2 days 9 hours ago) and read 6964 times:

My source at Boeing says that the 717 order could be bigger if one or two more Star Alliance members join the order book.

Stephen


User currently offlineJjpiecuch From , joined Dec 1969, posts, RR:
Reply 6, posted (11 years 6 months 2 weeks 2 days 9 hours ago) and read 6914 times:

>>>It believed to be first time a group of major airlines have come together to go plane shopping together.

Didn't the KSSU Group (KLM, SAS, Swissair, UTA) do that in the 1970's? Or was their "co-op" agreement more about shared parts and maintenance than the acquisition of the actual aircraft...anybody know?


User currently offlineCaptaingomes From Canada, joined Feb 2001, 6413 posts, RR: 55
Reply 7, posted (11 years 6 months 2 weeks 2 days 8 hours ago) and read 6899 times:

Greg, I'm done tonight at 10pm!!! No spotting after that.  Smile


"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 offlineYyz717 From Canada, joined Sep 2001, 16307 posts, RR: 56
Reply 8, posted (11 years 6 months 2 weeks 2 days 8 hours ago) and read 6870 times:

LH is known to be very interested in the 712 and the proposed 713. SAS is apparently relooking at the 712.

The KSSU group didnt place a joint order per se but they all chose the DC-10-30 together deliberately to coordinate mx etc.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineWingman From Seychelles, joined May 1999, 2289 posts, RR: 5
Reply 9, posted (11 years 6 months 2 weeks 2 days 8 hours ago) and read 6812 times:

AC and LH buy aircraft from Boeing? I will get roasted yet again for saying it...but not in a million years. Just like IB, AC and LH will do their best to make Airbus and Bombardier think they are seriously entertaining a Boeing offer only to drive the price of 318s and CRJs through the floor. This order will end up a mix of 318s and CRJs even with a $1 per unit price for 717s. I guarantee it and am willing to put money on the line (one dollar per unit ordered). Anyone who thinks 717s are a real possibility is simply delusional.

User currently offlineCaptaingomes From Canada, joined Feb 2001, 6413 posts, RR: 55
Reply 10, posted (11 years 6 months 2 weeks 2 days 8 hours ago) and read 6798 times:

I also don't think the 717 has many chances with Air Canada. They don't have commonality with anything else in the fleet, but you never know if other aspects of the aircraft can negate the positive effects of commonality of the Airbuses or the CRJ's. But for that to happen, the 717 has to be really that good, and chances are it's not.

The A318's only real advantage is commonality with the large number of A32X aircraft in Air Canada's fleet currently. It can also be used for long, thin routes, but the A319 already does well in that respect. Then you still have a heavy aircraft that will have to fly pretty full, especially at today's yields to break even. Not much chance there. I honestly think the 717 has better chances.

The CRJ 90 has many advantages, namely commonality with the 50's, and I am guessing excellent economics on short haul flights. However, it is a very small aircraft, and many people I have spoken too find it uncomfortable due to it's very small fuselage. This will not be good for business class, if Air Canada is even still serious about business class. Also, as the article pointed out, CRJ pilots make less money.

So .....

CRJ: commonality and economics
717: economics and comfortable cabin
318: commonality and comfortable cabin

What are the important factors for Air Canada's future success? I'm sure they are debating that right now.



"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 offlineFlying-Tiger From Germany, joined Aug 1999, 4165 posts, RR: 36
Reply 11, posted (11 years 6 months 2 weeks 2 days 8 hours ago) and read 6798 times:

Be prepared for a larger A318/319/320 and CRJ700/900 order late last year. No order is imminent at the moment as at least Lufthansa has put every large project/spending on hold for the time being. However a merger with Swiss could throw in some trouble.

Regards
Flying-Tiger
http://fly.to/rorders



Flown: A319/320/321,A332/3,A380,AT4,AT7,B732/3/4/5/7/8,B742/4,B762/763,B772,CR2,CR7,ER4,E70,E75,F50/70,M11,L15,S20
User currently offlineFlying-Tiger From Germany, joined Aug 1999, 4165 posts, RR: 36
Reply 12, posted (11 years 6 months 2 weeks 2 days 7 hours ago) and read 6779 times:

Ehmm... the CRJ900 hasn´t really much commonality with the CRJ100/200. Fuselage is different, wing is completely different, engines, too. Bombardier talks about 20% parts commonality of the CRJ200 with the CRJ900 but about 90 % when comparing CRJ700 and 900.

What you mean is the CRJ500 - the CRJ200 with a shortened CRJ700 cabin and the CRJ700 wing.

Regards
Flying-Tiger
http://fly.to/rorders



Flown: A319/320/321,A332/3,A380,AT4,AT7,B732/3/4/5/7/8,B742/4,B762/763,B772,CR2,CR7,ER4,E70,E75,F50/70,M11,L15,S20
User currently offlineWjv04 From Canada, joined Jun 2001, 584 posts, RR: 4
Reply 13, posted (11 years 6 months 2 weeks 2 days 7 hours ago) and read 6753 times:

The mistake wasnt really a mistake.
They ment to say that there trying to phase out aircraft that have smaller numbers in the fleet. Such as the 744


User currently offlineCaptaingomes From Canada, joined Feb 2001, 6413 posts, RR: 55
Reply 14, posted (11 years 6 months 2 weeks 2 days 7 hours ago) and read 6724 times:

Flying-Tiger, are you sure about that? I really don't know, but from the little I looked into it, the CRJ 900 seemed to be essentially a stretched 700, which is a stretched 200. However, even if that's the case regarding fuselage, etc, I am sure Bombardier went ahead and made it a common flight deck so that pilots could hold a common rating on all CRJ's. If that's not the case, then it would be a much closer tie between the 717 and CRJ 900. Of course, we can't forget our friends down at Embraer.


"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 offlineAC320 From , joined Dec 1969, posts, RR:
Reply 15, posted (11 years 6 months 2 weeks 2 days 7 hours ago) and read 6710 times:

AC + EMB, that's a laugh

User currently offlineHoustondallas From Canada, joined Jul 2001, 92 posts, RR: 0
Reply 16, posted (11 years 6 months 2 weeks 2 days 5 hours ago) and read 6608 times:

The CRJ-700 is much more than a stretched 200. Tons of stuff was changed. The 900 though is very similiar to the 700. The flight decks are all quite common though.

houston


User currently offlineWestjet_8 From Canada, joined Jan 2001, 451 posts, RR: 0
Reply 17, posted (11 years 6 months 2 weeks 2 days 1 hour ago) and read 6442 times:

I actually don't think the 717-200's would be too out of common with Air Canada as they operated the DC9's for 30 plus years and loved them. They still have MX crews and crews trained on the DC9's which are common to the 717. So go 717-200 and CRJ's. I really think the A318's are ugly but they will probally get the order.


Canadian. RIP 1999
User currently offlineWjv04 From Canada, joined Jun 2001, 584 posts, RR: 4
Reply 18, posted (11 years 6 months 2 weeks 1 day 23 hours ago) and read 6350 times:

I dunno if its just me but none of these make too much sence. The 717 was never really that popular in terms of sales. And why would a carrer trying to go with a all airbus fleet go and buy new boeings?

With regards to the CRJ-900s, Are they really gonna try to place that instead of the 732? I dont see the crjs being as good of a work horse then boeings 737 (Maybe im wrong, someone go ahead and correct me if i am). And with the a318 what is that gonna replace? the 737-200?
and whos gonna get them zip, or mainline?
None of this makes any sence, i think they should get
jazz feeding them
get rid of zip (loads are terrible anyway)
and the only new order they should get is B737-700s to replace the 732
And also instead of the a345s they should be taking some of UALs 772s?


User currently offlineCaptaingomes From Canada, joined Feb 2001, 6413 posts, RR: 55
Reply 19, posted (11 years 6 months 2 weeks 1 day 23 hours ago) and read 6336 times:

"get rid of zip (loads are terrible anyway)"
It's weird, because I always hear that Zip loads are poor, yet, they are expanding Zip and downsizing Tango. Let's see what they have planned for Zip and maybe things will turn around for them.

The CRJ's and 717's actually make sense to me. Basically, Air Canada needs to downsize, and that means not only in the number of aircraft in their fleet, but also in the number of seats on the market. Using smaller aircraft allows them to keep similar frequencies, and add new routes with less risk.

The 73G doesn't make sense for AC, neither does the 777, as much as I'd like to see those in the fleet.



"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 offlineN79969 From , joined Dec 1969, posts, RR:
Reply 20, posted (11 years 6 months 2 weeks 1 day 23 hours ago) and read 6328 times:

Agree with Wingman...I don't believe those airlines, particularly LH, has any intention of purchasing a 717.

User currently offlineSllevin From United States of America, joined Jan 2002, 3376 posts, RR: 6
Reply 21, posted (11 years 6 months 2 weeks 1 day 23 hours ago) and read 6308 times:

The 717 makes little to no sense for AC, or really any of the other operators mentioned. The A318 makes far more sense -- for a minor increase in hourly cost they can maintain a single crew base as well as common maintenance. WN's operating costs prove the "common airplane" argument (even though they fly 737NG's on short routes, the supposed anathema to how one operates effectively).


Steve


User currently offlineSamurai 777 From Canada, joined Jan 2000, 2458 posts, RR: 4
Reply 22, posted (11 years 6 months 2 weeks 1 day 22 hours ago) and read 6271 times:

There's something pretty interesting here, no doubt. AC has to get its restructuring plan approved and running before it can even begin to order any more 90-100 seaters.

AC is most likely to order the A318 and the CRJ-200/700/900. Commonality is a very important thing in keeping costs down, I believe. Why else do LCCs like WestJet and JetBlue stick to as few aircraft types/variants as possible? It's not just crew training, but also parts and maintenance, too. Canada is a huge country, and the A318 is supposed to have better range than the 717 despite greater weight.

Captaingomes, you do have a point - the situation with Zip is indeed weird. Only where AC has replaced all mainline entirely with Zip (ie: YEG-YVR) do loads seem to be higher. Otherwise, the loads are rumored to be terrible. Yet AC wants to keep expanding Zip. This is the ONLY case where I have seen an airline/subsidiary expand its fleet despite bad loads! I understand that AC wants to keep down costs, yes, but I still believe Zip will either get scrapped or have its 732s replaced by A319s and maybe A318s.

I'm not sure if AC will take up 717s, even though it did operate DC-9s for quite a while in the past. It's much more likely the CRJ-900 will be ordered - after all, there is a good chance the scope clause will be scrapped and the CRJ-900s will go to Jazz, and Jazz pilots do make less money than mainline pilots do. And you get better commonality crew and maintenance wise as the CRJ-100/200 is already in service with Jazz and AC.

I wonder how quickly AC is going to get rid of its entire 732 fleet, in addition to its 744s. I have a feeling it's going to be a pretty fast phase-out, maybe like with the Fokker F28 fleet.


User currently offlineCloudy From , joined Dec 1969, posts, RR:
Reply 23, posted (11 years 6 months 2 weeks 1 day 22 hours ago) and read 6307 times:

WN's operating costs prove the "common airplane" argument (even though they fly 737NG's on short routes, the supposed anathema to how one operates effectively).

-----

Only the shorter 737-600 as well as its competitor, the A318, are thought to be not as good at short routes. The 737-700 and A319 are thought to be just as good at short routes as on longer ones. Not that there is much technical difference between the 737-600 and the 737-700, -800 and -900. It is just that the competition that the two planes attract is different. A high-end regional jet or a 717 can plausibly compete with the 737-600. Yet no current 717 or high-end RJ can really compete in the 737-700-900's and A319-A321's capacity range.

To rephrase it.... the only reason you would choose the 737-600 or the A318 is because of commonality or range. Their is better competition if you just want to fly shorter routes and don't have either 737's or Airbus narrowbodies. The inherent weight disadvantage of a "shrunk" airframe more or less guarantees this. However, if you want a new narrowbody with 120+ seats, your only realistic option currently is the A320 or 737 lines.

Also, These middle of the line planes do not have the disadvantage of being a severely "shrunken" version of a larger design - so even with their range, they are not really bad on shorter routes anyway.

Southwest does not have any 737-600's. All of their 737NG's are -700's. There are a few -200's and 500's, which are about 717 sized. Yet these are earlier models and there are not that many of them. The -300 (most of Southwest's fleet) is about the same size as the -700.


User currently offlineJU101 From Canada, joined Mar 2001, 832 posts, RR: 4
Reply 24, posted (11 years 6 months 2 weeks 1 day 21 hours ago) and read 6190 times:

A new fleet acquisition will not solve the problems for Air Canada.

Solving the root of the problem would require a total assessment of the airline cost structure. Nevertheless after conducting any multi million dollar feasibility study, the result will always be the same - decrease the work force. Unfortunately decrease in cost structure would not affect the administrative component of the company.

Secondly, Air Canada has an overwhelmingly diverse fleet. Though it seems impressive, it is reflective of bad management. Just look at the diversity of the long range fleet. They encompass at least five models, that can be easily reduced to three.

Here is how I envision a successful Air Canada:

Long range: B767-300, B767-200, A340-300
Medium range: A321, A320, A319
Short range: Dash 8, and assortment of CRJs

Essentially what Air Canada needs is some simplicity, since it has failed to take advantage of the theory of economies of scale.


25 LGB Photos : One problem with the A318 is that it is not being built yet, 717 is in production and all of the customers who use it, like it, especially Air Tran an
26 AC320 : Seeing as they may not be ready to order planes for a little while longer, any small delays in getting the A318 production going should pose little to
27 Post contains images Slawko : I would further reduce the fleet to a few 777's some 763's or 764's for long hauls, and a mix of 717's and NG's for the medium-short range..let jazz d
28 747-451 : Air Canada will continue to exclusively buy Airbus and Bombardier products. This si the direction they have been following for many years. The 732's (
29 Racko : Wingman, how do you explain LH's intentions to equip their whole long-haul fleet, including the A330s and A340s, with Boeing's connexion system then?
30 AC320 : I think AC might wait and see what Airbus offers up to fill the gap between the A321 and A330-200 which will be the manufacturer's next likely develop
31 Slawko : 747-451 thats an interesting point of view but unless airbus can come up with something to rival a 767 I think you are wrong..the fact that only one n
32 747-451 : I'm basing my conclusion on this: A330-300 with 335 seats can go 4500NM w/ PW4164's B767-300 with 350 seats can go 4230NM w/ PW4050's Close enough to
33 LH423 : >>>It believed to be first time a group of major airlines have come together to go plane shopping together. Didn't the KSSU Group (KLM, SAS, Swissair,
34 Post contains images Cessnapimp : They even standardised the meal carts and the galleys. Up until (I believe) summer of last year, some of Air Canada's (ex CA) 763's had KSSU carts. Th
35 Sllevin : There are a few -200's and 500's, which are about 717 sized. Yet these are earlier models and there are not that many of them. Actually, until the pas
36 HlywdCatft : yeah you gotta love the 747-400 being a smaller plane since the last I heard Air Canada doesnt fly or even have orders for the A380
37 Wingman : Racko, Connection is the easy way out. It has a semi-meaningless impact on Airbus as Tenzig is only an investment by Airbus and also has the very notc
38 Bmacleod : The DC-9 was the favorite aircraft of many AC pilots; that's what I've read. They commented on how easy it was to handle compared to the 727 and L-101
39 Racko : Wingman, do you have any proof for your claims? I could argue the same way about AA, DL and CO being pressured by the US government to buy Boeings. An
40 747-451 : "I could argue the same way about AA, DL and CO being pressured by the US government to buy Boeings." But that doesn't happen now does it; and some of
41 Bmacleod : Smaller planes like the 747-400 That's a joke right? Nice to see AC has a bit of humor in them. Well if the 380 is ever built, the 747 will be smaller
42 SegmentKing : funny that Airbus can't give the A318 away. Just talk to Frontier about the potential problems they are running into with them... and they haven't eve
43 Racko : "But that doesn't happen now does it" Nope, because I believe private companies do what they think fits their needs, not their government's needs. Be
44 ConcordeBoy : F9 is one of the few carriers actually sticking with the A318... most others have already considered it DOA
45 Post contains images 747-451 : Nope, because I believe private companies do what they think fits their needs, not their government's needs. Be it American, Lufthansa or Northwest. A
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