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"Air Canada's Slow Descent" Macleans  
User currently offlinepnd100 From Canada, joined Mar 2009, 343 posts, RR: 0
Posted (2 years 4 months 4 weeks 8 hours ago) and read 9548 times:

Hello a.net, I did a search & could not find this topic, if there is please accept my apologies & direct me there.

http://www2.macleans.ca/2012/04/23/a-slow-descent/

Headline: Air Canada’s slow descent
It is the country’s biggest and most dysfunctional airline, at war with its unions, losing money and protected by Ottawa. There may be only one way out.

I would be interested to hear your thoughts.

-Do you think the article is fair & balanced?
-What do you think of the article's recommendations?
-If you were entrusted with turning around the airline, what would you do?

It's my hope that there can be some ideas generated.

53 replies: All unread, showing first 25:
 
User currently offlineblueflyer From United States of America, joined Jan 2006, 4001 posts, RR: 2
Reply 1, posted (2 years 4 months 4 weeks 5 hours ago) and read 9300 times:
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Strachan, Rovinescu, Raitt and the entire board have to go.

A panel of independent mediators should be appointed (one each picked by the unions, ACE and the government) to negotiate a new contract with binding arbitration if necessary.

The unions will probably have to agree to a LCC division (for a defined list of destinations), a Defined Contribution plan and productivity benchmarks based on competing carriers in North America and Europe. Management will have to agree to no further cuts in employee pay and executives will have to take their bonuses in the form of shares vesting at least 12 months after being awarded.

Finally, the government should reach an agreement with the shareholders whereas the airline is run as a for-profit entity, not so the best parts can be sold off for short term gains. If they come to an agreement, the government would amend the Air Canada Public Participation Act to put AC on the same regulatory level as other Canadian carriers, raise the foreign participation limit to 64% and provide tax relief (to make up for airport charges apparently higher than in other markets). If there is no agreement, the government signs an Open Skies treaty with the UAE and Qatar.



I've got $h*t to do
User currently offlineWestJetYQQ From Canada, joined Jan 2007, 2987 posts, RR: 4
Reply 2, posted (2 years 4 months 4 weeks 4 hours ago) and read 9206 times:

Quote:
His plan? Create one or more new low-cost carriers, complete with lower wages and benefits for employees, to handle Air Canada’s less profitable routes.

Is this not exactly what Air Canada tried to do with both Zip and Tango immediately before the 2004 restructure? I'm not saying it won't be successful, but neither of those brands lasted more than a couple years.

Quote:
That winning formula includes a single type of aircraft (to save on training and maintenance costs), no connecting flights (which cause expensive delays when planes have to wait for passengers) and an all-economy-class configuration (which maximizes passenger numbers).

So if Air Canada were to split into several low-cost start up companies, as they seem to be suggesting in that article, would they actually be able to pull off these factors that make WS and WN competitive? It seems that "expensive delays when planes have to wait for passengers" could only get worse if that were the case, not to mention they would still have all of their Star Alliance connections to wait for.

I hope AC gets it's finances sorted out. I hate to see Canadian carriers cripple themselves.

Cheers
Carson



Will You Try to Change Things? Use the Power that you have, the Power of a Million new Ideas.
User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
Reply 3, posted (2 years 4 months 4 weeks 2 hours ago) and read 9044 times:

Quoting pnd100 (Thread starter):
It is the country’s biggest and most dysfunctional airline, at war with its unions, losing money and protected by Ottawa. There may be only one way out.

To say that AC is "protected by Ottawa" I think is entirely misleading. Burdened by Ottawa would be more accurate. Principally the Air Canada Public Participation Act. Allow AC to function just like any other Canadian corporation and I think you would see immediate positive returns in the many tens of millions.

- need to have at least one bilingual FA on every flight: if one not available, flight is held until one found or cancelled, at considerable cost. This works both ways: need for a French-speaking FA or need for an English-speaking FA.
- need to have ALL documentation in both languages: hell, at all Airbus plants, Hamburg, Toulouse, Getafe, the working language is English, plain and simple. Sometimes life is tough.
- requirement to have mx bases in YUL, YYZ, and YWG. There is also one at YVR which I believe arises from the merger with CP. Locate them where it makes most sense and lowest cost. If one or more need to close, then do so. Outsourcing is occuring already, with some heavies going to Hong Kong (HAECO), but savings there are problematic due to the need to deadhead a/c & crew and the fact that productivity at HAECO is not up to North American standards.

Some of the recommendations are reasonable. An affiliated LCC is inevitable I think. Was commented in the thread that both Zip & Tango didn't last long, but I don't think they were ever meant to be, but were experiments. One area the unions simply have to give on is work rules. AC needs more flexibility in how it uses staff. I don't mean to say that crew dispatch can go work in mx, but paper pushers should be able to rotate through the office area as needed, for example.

Executive compensation and retention bonuses have to be looked at closely. Won't save a huge ton of $$$ but the symbolism is important.

Finally, the big one: moving from DBP to DCB. Ultimately this has to happen and it may wind up with an A & B list: current staff retain DBP, new staff DCB. Or something like that.

Hopefully food for thought.



Nostalgia isn't what it used to be.
User currently offlineStarAC17 From Canada, joined Aug 2003, 3376 posts, RR: 9
Reply 4, posted (2 years 4 months 4 weeks 1 hour ago) and read 9015 times:

Quoting connies4ever (Reply 3):
To say that AC is "protected by Ottawa" I think is entirely misleading. Burdened by Ottawa would be more accurate.

Agreed, had Lisa Raitt stayed out of this then the management and union would have gone to arbitration and an agreement would have been reached. She has also set a precedent for any large union in Canada like the CAW.

You try and strike we will legislate you back to work, of course you are going to have employees play games and in a union you need to show a history of non-professionalism to be sacked.

Unless its an essential service stay the eff out government!! Hate unions all you want but if you have to deal with them don't circumvent their rights.



Engineers Rule The World!!!!!
User currently offlineskipness1E From United Kingdom, joined Aug 2007, 3254 posts, RR: 1
Reply 5, posted (2 years 4 months 4 weeks 1 hour ago) and read 9010 times:

Quoting blueflyer (Reply 1):

A panel of independent mediators should be appointed (one each picked by the unions, ACE and the government) to negotiate a new contract with binding arbitration if necessary.

A union approved set up to approve unaffordable salaries? Commercial suicide.


User currently offlinepnd100 From Canada, joined Mar 2009, 343 posts, RR: 0
Reply 6, posted (2 years 4 months 4 weeks ago) and read 8868 times:

Excellent points everyone, thanks for sharing.

Quoting blueflyer (Reply 1):

Your recommendations are interesting. Just out of curiosity how did you arrive at the figure of 64%?

Quoting connies4ever (Reply 3):
Allow AC to function just like any other Canadian corporation and I think you would see immediate positive returns in the many tens of millions.

I concur with this. Like most things here we are on the fence. If you want a state airline, make it so. If you want it to be run privately, make it so. The compromised solution that we have now seems to be helping no one.

Quoting connies4ever (Reply 3):
Executive compensation and retention bonuses have to be looked at closely. Won't save a huge ton of $$$ but the symbolism is important.

Thanks for mentioning this. Most point to executive compensation as some magic cure. I agree that the symbolism matters more than the actual dollars. My only question then would be how does AC attract top talent without robust compensation? Do you think blueflyers idea of deferred compensation could work?

Quoting StarAC17 (Reply 4):
Quoting connies4ever (Reply 3):
To say that AC is "protected by Ottawa" I think is entirely misleading. Burdened by Ottawa would be more accurate.

Agreed, had Lisa Raitt stayed out of this then the management and union would have gone to arbitration and an agreement would have been reached. She has also set a precedent for any large union in Canada like the CAW.

While I understand the governments' desire to keep things running, I did not agree with the manner in which they seemed to "artificially" prevent a disruption. There are issues that need to be worked out. AC's situation is not unique in he industry. The question is how do you move an airline from one era to another in a way that is fair to all concerned?

The protection perception I think comes from the government preventing Middle East carriers from expansion. If it were truly an open market, the market would decide if AC lives or not. This does not appear to be the case at the moment. I personally think that with some minor tinkering, AC can actually benefit with EK / QR / EY because those airlines will take away the low yielding VFR traffic allowing AC to concentrate on higher returns.


User currently offlinepnd100 From Canada, joined Mar 2009, 343 posts, RR: 0
Reply 7, posted (2 years 4 months 4 weeks ago) and read 8856 times:

In another forum this idea was proposed:

1) Open up current bilaterals allowing for expansion by current carriers to other points in Canada with the preference going to Star Alliance carriers. This will in the short term look bad for AC but in the long run Canadians will benefit from greater competition & connectivity. Also as the lower yielding traffic flocks to these carriers it leaves higher yielding passengers for AC, etc. The Middle East carriers can absorb this traffic because their cost structures are radically different

2) Find another source of revenue that will allow reduction in airport fees to the airlines & taxes to the passenger. Encourage foreign carriers to fly domestic routes again with preference going to Star Alliance carriers. This will benefit the population by providing greater connections.

3) AC will be a three tier airline, the mainline will fly to the highest profile routes with an all widebody fleet of 787s & 777s. The second tier will be Canada's Jetstar flying a mixed fleet to lower yielding routes & sun destinations. The third part would be funded by the government to provide connections to remote communities.

4) Corporate restructuring to ensure maximum efficiency.


Now this is simplifying things to some degree but I think there is some merit to the ideas. I'm not exactly sure how "preference" would be given to Star Alliance or how exactly this will benefit. Of course point #2 is easy if possible but if there was other sources of revenue I think that would have been tapped already. Otherwise the ideas are more radical than others that have been suggested by AC or the Government. Do you think any or all of the above could work?


User currently offlineusdcaguy From United States of America, joined Jan 2004, 972 posts, RR: 2
Reply 8, posted (2 years 4 months 4 weeks ago) and read 8846 times:

Quoting connies4ever (Reply 3):
- need to have at least one bilingual FA on every flight: if one not available, flight is held until one found or cancelled, at considerable cost. This works both ways: need for a French-speaking FA or need for an English-speaking FA.
- need to have ALL documentation in both languages: hell, at all Airbus plants, Hamburg, Toulouse, Getafe, the working language is English, plain and simple. Sometimes life is tough.

Does anyone know how much this really costs? I can't imagine it being too problematic, as the headquarters in Montreal, so you should be able to find enough people to keep documents in two languages. The bilingual crew issue is possibly a concern, but how much French would an English-speaking flight attendant need to know to be considered bilingual?


User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
Reply 9, posted (2 years 4 months 3 weeks 6 days 23 hours ago) and read 8813 times:

Quoting pnd100 (Reply 6):
While I understand the governments' desire to keep things running, I did not agree with the manner in which they seemed to "artificially" prevent a disruption. There are issues that need to be worked out. AC's situation is not unique in he industry. The question is how do you move an airline from one era to another in a way that is fair to all concerned?

You need to be able to sell EVERYONE on the concept that if the enterprise as a whole fails, everyone loses. If the enterprise as a whole succeeds, everyone wins. I think WS are miles ahead in this area.

Quoting pnd100 (Reply 7):
1) Open up current bilaterals allowing for expansion by current carriers to other points in Canada with the preference going to Star Alliance carriers. This will in the short term look bad for AC but in the long run Canadians will benefit from greater competition & connectivity. Also as the lower yielding traffic flocks to these carriers it leaves higher yielding passengers for AC, etc. The Middle East carriers can absorb this traffic because their cost structures are radically different

With the exception of a few ME areas, Canada is essentially an open skies jurisdiction already.

Quoting usdcaguy (Reply 8):
Does anyone know how much this really costs? I can't imagine it being too problematic, as the headquarters in Montreal, so you should be able to find enough people to keep documents in two languages. The bilingual crew issue is possibly a concern, but how much French would an English-speaking flight attendant need to know to be considered bilingual?


Longhauler (767 driver), in other threads, has indicated the total costs to AC of ACPPA is on the order of $200M/yr. This includes Quebec corporate taxes due to HQ officially being in YUL. He's in a better position to know than I.

The fed standard for being bilingual, which AC has to adhere to, is that you must be able to hold a reasonable conversation at length, and be able to read/write clearly in French (or English, for that matter). The standard actually is pretty high. I only just pass.



Nostalgia isn't what it used to be.
User currently offlinepnd100 From Canada, joined Mar 2009, 343 posts, RR: 0
Reply 10, posted (2 years 4 months 3 weeks 6 days 23 hours ago) and read 8726 times:

Quoting connies4ever (Reply 9):
You need to be able to sell EVERYONE on the concept that if the enterprise as a whole fails, everyone loses. If the enterprise as a whole succeeds, everyone wins. I think WS are miles ahead in this area.

Agreed 100%. I like the WS model from afar. I'm not sure if any WS staff can provide us with any "insider" issues but I suspect that as with my company, employee stakeholders make a difference

Quoting connies4ever (Reply 9):
With the exception of a few ME areas, Canada is essentially an open skies jurisdiction already.

So if that's the case, please let me know about the following hypothetical scenarios;

1) As a current carrier to YYZ & YUL, Air France decides it wishes to start flights to YVR using it's own metal, it does not require government clearance? What about equipment? Is it allowed to say upguage YYZ from A343 / B744 to A380 as it chooses?

2) As an airline that does not serve Canada, could TG commence flights here without a problem?

3) Which airlines / regions fall into the blackout category? I assume those from the UAE & Qatar (what about Kuwait / Bahrain / Saudi Arabia?) & I think SQ also?

Please clarify.

By the way, what ever happened to ET serving Canada?


User currently offlinewhiteguy From Canada, joined Nov 2003, 793 posts, RR: 0
Reply 11, posted (2 years 4 months 3 weeks 6 days 23 hours ago) and read 8705 times:
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Quoting connies4ever (Reply 9):
The fed standard for being bilingual, which AC has to adhere to, is that you must be able to hold a reasonable conversation at length, and be able to read/write clearly in French (or English, for that matter). The standard actually is pretty high. I only just pass.

And FAs have to maintain the standard. Recurrent testing is done every couple years!


User currently offlineczbbflier From Canada, joined Jul 2006, 973 posts, RR: 2
Reply 12, posted (2 years 4 months 3 weeks 6 days 22 hours ago) and read 8587 times:

Quoting StarAC17 (Reply 4):
Agreed, had Lisa Raitt stayed out of this then the management and union would have gone to arbitration and an agreement would have been reached.

By definition, arbitration is not an agreement.

Sadly, I don't think these issues are solvable. We're talking about distrust and hatred now. It seems to me that the people who actually do the front-line work at Air Canada are nothing more than a burden on the airline itself and they perceive (senior) management view them like that.

Nothing like getting out of bed believing that your boss thinks you're a burden as a necessary actor in generating their bonus.

It makes me angry to know that Canada, with its amazing aviation heritage has seen its diverse traditions and history, with the series of amalgamations that have brought such venerable names as Canadian Airways, Pacific Western, Nordair, Quebecair, Canadian Pacific, Wardair, and EPA- as well as the flying heritage of TCA itself- to name a few, have been amalgamated under this dysfunctional and f*cked up company.

"Management gets the union it deserves." It was management's unilateral decision to stop paying into the pension plans, it was management's unilateral decision to plough the cost-savings extorted out the company's employees to hire Celine Dion and rebrand the company.

Breach of trust causes deep, deep faults. Time for business schools to teach 'How not to run a business" and use Air Canada as the shining example.

It looks like no matter what decision is taken, the workers who have sacrificed for the company over and over again are the ones to lose out.

It will be great for the flying public. It will be great for shareholders. It will be great for the government. It will be great to 'fit in' with an industry that does not support its own employees. But it will not be good for those who make a living flying business travellers in executive class, with leisure travellers in tow at the back of the bus.

Market pressures from outside airlines? Certainly they must be addressed. But the deep and real issues inside Air Canada are completely home-made. If management worked with its employees and had shown good faith starting twenty years ago, Air Canada would have no problems taking on the competition.

Looks like the only thing left is to amputate. I suggest making it at the neck and starting again.

The article paints a bleak picture. The article also conveniently leaves out the history that got Air Canada to this place. I guess the history and the labour issues of the past are now a done deal. We can only be in the present and we can only 'move forward'. How convenient.

I am so sorry to all those on the front lines- I'm not giving up on you, only facing the facts. The cards are stacked against you. You do not deserve to be put through any more hell than you have to. Better to go find another career, another passion, sooner than later. 



Edited for clarity.


[Edited 2012-04-24 06:12:29]

User currently offlineStarAC17 From Canada, joined Aug 2003, 3376 posts, RR: 9
Reply 13, posted (2 years 4 months 3 weeks 6 days 22 hours ago) and read 8528 times:

Quoting pnd100 (Reply 6):
While I understand the governments' desire to keep things running, I did not agree with the manner in which they seemed to "artificially" prevent a disruption. There are issues that need to be worked out. AC's situation is not unique in he industry. The question is how do you move an airline from one era to another in a way that is fair to all concerned?

If its a private corporation so its survival of the fittest in most regards. Governments can an do inject capital for corporations to assist them as like an investor which is controversial and an argument for another thread.

However If a LEGAL work stoppage is such as risk to the economy of Canada then AC is everyone in Canada's problem and should be re-nationalized.

Quoting czbbflier (Reply 12):
By definition, arbitration is not an agreement.

No it isn't but it forces one eventually decided by a independent 3rd party. It's still better than the nonsense the fed is pulling.



Engineers Rule The World!!!!!
User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
Reply 14, posted (2 years 4 months 3 weeks 6 days 21 hours ago) and read 8477 times:

Quoting pnd100 (Reply 10):
1) As a current carrier to YYZ & YUL, Air France decides it wishes to start flights to YVR using it's own metal, it does not require government clearance? What about equipment? Is it allowed to say upguage YYZ from A343 / B744 to A380 as it chooses?

I believe that is the case.

Quoting pnd100 (Reply 10):
2) As an airline that does not serve Canada, could TG commence flights here without a problem?

Some SE Asia jurisdictions are not within the scope of Open Skies 9yet) and I believe Thailand may be one of them. Therefor some type of bilateral would need to be agreed upon, or jump right into Open Skies. Problem is, from the Canadian p.o.v., not a big market, therefore no perceived need to get moving on this file.

Quoting pnd100 (Reply 10):
3) Which airlines / regions fall into the blackout category? I assume those from the UAE & Qatar (what about Kuwait / Bahrain / Saudi Arabia?) & I think SQ also?

I think EY/EH/QR have access with capacity restrictions, no knowledge of the others. There was an agreement with Singapore until a few years ago, they wanted unrestricted access with 5th freedom SIN-ICN-YVR/YYZ. When they didn't get it, agreement was cancelled.I think there is still finger pointing going on.

Quoting pnd100 (Reply 10):
By the way, what ever happened to ET serving Canada?

Starts this summer I believe 3x weekly. Westbound ADD-FCO-YYZ, eastbound n/s. No 5th FCO-YYZ, merely a tech stop due to altitude at ADD.



Nostalgia isn't what it used to be.
User currently offlinepnd100 From Canada, joined Mar 2009, 343 posts, RR: 0
Reply 15, posted (2 years 4 months 3 weeks 6 days 20 hours ago) and read 8344 times:

duplicate in error, please delete

[Edited 2012-04-24 07:58:53]

User currently offlinepnd100 From Canada, joined Mar 2009, 343 posts, RR: 0
Reply 16, posted (2 years 4 months 3 weeks 6 days 20 hours ago) and read 8322 times:

Quoting czbbflier (Reply 12):
It makes me angry to know that Canada, with its amazing aviation heritage has seen its diverse traditions and history, with the series of amalgamations that have brought such venerable names as Canadian Airways, Pacific Western, Nordair, Quebecair, Canadian Pacific, Wardair, and EPA- as well as the flying heritage of TCA itself- to name a few, have been amalgamated under this dysfunctional and f*cked up company.

Applause from my end at least for your statement of our aviation history. Like many other nations it seems that the glory days of our airlines are in the past.

Quoting czbbflier (Reply 12):
"Management gets the union it deserves." It was management's unilateral decision to stop paying into the pension plans, it was management's unilateral decision to plough the cost-savings extorted out the company's employees to hire Celine Dion and rebrand the company.

Breach of trust causes deep, deep faults. Time for business schools to teach 'How not to run a business" and use Air Canada as the shining example.

Excellent quote. "The best union is none at all." Not because the union itself is a bad thing but rather if you truly cared about your business, you invest in your workers. Unions exist to protect workers from management who at one point did not care about the well being of their staff. This is foolish from a corporate management point of view. WS was cited as an example in the airline industry of a company who has stakeholders. I'm sure no company is perfect but having worked for many of Canada's largest corporations I can tell you the most profitable companies are the ones who follow this type of mutual benefit model.

Quoting StarAC17 (Reply 13):
However If a LEGAL work stoppage is such as risk to the economy of Canada then AC is everyone in Canada's problem and should be re-nationalized.

Agreed. Some have suggested that since airline service is a necessity for many communities in Canada & that it may not always be profitable to fly those routes that the government re-nationalize at least a part of AC. For me personally I would just like a decision one way or another. If you want AC to be re-nationalized, fine. Then as taxpayers we would need to understand that this is a service rather than an investment (like public transit). If you want AC to be run as a private company, also fine. Then do not interfere at all. This means no protectionism in bilaterals, no forced back-to-work legislation, etc. In my view the status quo is firmly seated on the fence.

Quoting connies4ever (Reply 14):
Some SE Asia jurisdictions are not within the scope of Open Skies 9yet) and I believe Thailand may be one of them. Therefor some type of bilateral would need to be agreed upon, or jump right into Open Skies. Problem is, from the Canadian p.o.v., not a big market, therefore no perceived need to get moving on this file.

That is what I meant by open skies - no restrictions imposed by government except in matters of national security. The reason I would want national security concerns are exempt is for practical purposes. This means that EK / EY / SQ can negotiate directly with YYZ or YYC regarding frequencies or equipment. The only limits would be imposed by market factors like availability of slots, demand, etc. I love AC but I love Canada more, I'm more interested in what is best for the country as opposed to what is best for the airline. The two are not hand in hand. Artificial assistance of one company will prove to be harmful in the long run. If AC can't survive in the market on it's own merit it should be allowed to fail. Other companies, new companies will fill in the vacuum. However, I'm betting that if they can work out some kinks, AC can compete.

Quoting connies4ever (Reply 14):
I think EY/EH/QR have access with capacity restrictions, no knowledge of the others. There was an agreement with Singapore until a few years ago, they wanted unrestricted access with 5th freedom SIN-ICN-YVR/YYZ. When they didn't get it, agreement was cancelled.I think there is still finger pointing going on.

Amazing. The refrain I often hear is that allowing this would cause AC to "lose" traffic. The traffic does not belong to AC or any airline. People should be allowed to fly with whom they choose. If AC offers what people want, people will fly them. It's funny that often the same people who wish for AC to be protected want competition opened in other industries like communications! They want foreign carriers to be allowed the same access as Canadian carriers because they know ultimately as a consumer they will have more choice, better products & often lower prices. The same applies to the airline industry.

The "fittest" in survival of the fittest is often misunderstood to be the strongest or largest. It means to find your niche. My advice to AC is to not worry about EK because there is no need to compete with them. Let them take the low yielding masses to secondary destinations. AC does not have to try & beat SQ either. For starters they are in an alleged alliance, try working together. If they can't do that, AC should understand that SQ's fares & product appeal to a different market than AC's core customer. There can be a niche that AC can fill, they just need to find it.


User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
Reply 17, posted (2 years 4 months 3 weeks 6 days 20 hours ago) and read 8233 times:

Quoting pnd100 (Reply 16):
Amazing. The refrain I often hear is that allowing this would cause AC to "lose" traffic.

I agree with your argument overall, but in the SQ case, there is minimal traffic SIN-Canada. One reason AC stopped its' service YYZ-LHR-BOM-SIN a long time ago.

What they were/are after is unlimited ICN-Canada rights, as Korea is going through tremendous growth. Open Skies should really only relate to the O&D countries, not something in the middle.



Nostalgia isn't what it used to be.
User currently offlinepnd100 From Canada, joined Mar 2009, 343 posts, RR: 0
Reply 18, posted (2 years 4 months 3 weeks 6 days 19 hours ago) and read 8158 times:

Quoting connies4ever (Reply 17):
I agree with your argument overall, but in the SQ case, there is minimal traffic SIN-Canada. One reason AC stopped its' service YYZ-LHR-BOM-SIN a long time ago.

What they were/are after is unlimited ICN-Canada rights, as Korea is going through tremendous growth. Open Skies should really only relate to the O&D countries, not something in the middle.

Hmmm, you make an interesting point.

So let me play a bit of devil's advocate in a bid to understand better;

1) if indeed they were after ICN & the South Korean authorities were okay with that, what harm could it have done? People flying ex Canada to ICN would have now had a choice between KE (SkyTeam) & SQ/AC (Star Alliance). Shouldn't the granting of rights to any of the Star Alliance carriers help rather than hinder AC?

2) In the case of EK / EY / QR, they wish to be granted access nonstop to their hubs unlike SQ through ICN. We all know that these pax are connectors but how are they different than BA / LH / KL? I agree that O&D to Europe is far greater but we must acknowledge that many Canadian pax on European carriers are also connectors. Maybe half.

Our country has changed, the demographics are different today than even in 2000 & definitely a far cry from what they were in 1980. To many people the government favouring the incumbents looks like a European bias. To them it's more convenient to connect through DXB or DOH than through LHR or FRA. As visa restrictions for many Asian / African nations increase, it makes it even more difficult for this sizeable group to connect from Canada.

Why should we care? Because many of them are Canadian citizens & they are all legal residents who work here & pay taxes. Should the government not look to serve all Canadians as opposed to the segment like myself who prefers to go through Europe? It's not that I didn't try. I flew EK but their product & environment did not appeal to me personally.

3) If O&D is the main factor in landing rights then what about India & China? There is a lot of O&D between these countries & Canada. If their carriers were in the position to expand or "capacity dump" do you think the government would make the same argument it makes in relation to the Mid-East carriers?


User currently offlinelonghauler From Canada, joined Mar 2004, 4987 posts, RR: 42
Reply 19, posted (2 years 4 months 3 weeks 6 days 19 hours ago) and read 8123 times:

Quoting pnd100 (Reply 16):
Excellent quote. "The best union is none at all." Not because the union itself is a bad thing but rather if you truly cared about your business, you invest in your workers. Unions exist to protect workers from management who at one point did not care about the well being of their staff. This is foolish from a corporate management point of view. WS was cited as an example in the airline industry of a company who has stakeholders. I'm sure no company is perfect but having worked for many of Canada's largest corporations I can tell you the most profitable companies are the ones who follow this type of mutual benefit model.

I agree with this wholeheartedly. But ... it will not work if both sides do not trust each other. This is not a union issue, but a "once bitten, twice shy" issue.

For example, AC does have a profit sharing agreement with its pilots. A good idea, right? Wrong. Air Canada has yet to actually pay the pilots for profits in the past. In fact, the most outstanding grievance is from 2005!!! So .... Air Canada comes to the table with a Profit Sharing Plan, why would the answer be anything but "up yours"?

That is why I respect and envy the relationship Westjet has with its employees. Not because there is not a union, but more that both sides are pretty sure that each will always do the "right thing". Air Canada management has yet to figure out what the "right thing" is, and still have not caught on that the present attitude of Air Canada's employees is the direct result of actions of Air Canada management.

It appears that people think a "union" is some evil entity. In fact, only a very very VERY small part of the Air Canada Pilots Association (for example) is dedicated to Industrial Action, and Negotiation. Hundreds of men and women volunteer within APCA to do things like Assess Hotels, Meals, Pairings, etc. There are Safety Committees, Accidents Investigation Committees (my area of expertise), Medical Committees, Marriage Councillors, Legal Committees ... the list goes on and on and on.

Look at ALPA. The absolute best in the business in each area is working for them at their Headquarters, pretty impressive, and NOT Industrial Action related.

And none of it is to "Protect the Worker from the Employer". Thankfully in Canada, workers are protected outside the union venue, and Westjet employees (for example) are also so protected.



Never gonna grow up, never gonna slow down .... Barefoot Blue Jean Night
User currently offlinelonghauler From Canada, joined Mar 2004, 4987 posts, RR: 42
Reply 20, posted (2 years 4 months 3 weeks 6 days 19 hours ago) and read 8068 times:

Quoting pnd100 (Reply 18):

1) if indeed they were after ICN & the South Korean authorities were okay with that, what harm could it have done? People flying ex Canada to ICN would have now had a choice between KE (SkyTeam) & SQ/AC (Star Alliance). Shouldn't the granting of rights to any of the Star Alliance carriers help rather than hinder AC?

The Bilateral Agreements made and upheld by Canada, are based mostly on O&D traffic. Then allowed to grow. For the record, Canada and Singapore have Open Skies. SQ has chosen not to fly to Canada. There simply is not enough traffic.

For the record. The Koreans were NOT in agreement with SQ coming into ICN and flying to other countries.

Quoting pnd100 (Reply 18):
2) In the case of EK / EY / QR, they wish to be granted access nonstop to their hubs unlike SQ through ICN. We all know that these pax are connectors but how are they different than BA / LH / KL? I agree that O&D to Europe is far greater but we must acknowledge that many Canadian pax on European carriers are also connectors. Maybe half.

Yes, there is virtually no O&D traffic between Canada and the UAE. Far far less than the estimated 70% between Canada and Europe. And, I fear the reason for the lack of increased authority is more to do with the actions of the UAE over the last few years, than any business case.

And I say again. The actions of Canada's government with regard to Bilateral Agreements, is in no way to protect AC. Given the opportunity Canada's Government is always against AC!



Never gonna grow up, never gonna slow down .... Barefoot Blue Jean Night
User currently offlinelonghauler From Canada, joined Mar 2004, 4987 posts, RR: 42
Reply 21, posted (2 years 4 months 3 weeks 6 days 19 hours ago) and read 8069 times:

But back to the main issue, that is the article in Macleans. One thing that strikes me is the comments at the end of the article. It seems Canada's public has figured out where the problem lies in Air Canada ... and it sure isn't the employees!


Never gonna grow up, never gonna slow down .... Barefoot Blue Jean Night
User currently offlineViscount724 From Switzerland, joined Oct 2006, 25332 posts, RR: 22
Reply 22, posted (2 years 4 months 3 weeks 6 days 15 hours ago) and read 7760 times:

Quoting connies4ever (Reply 14):
Quoting pnd100 (Reply 10):
1) As a current carrier to YYZ & YUL, Air France decides it wishes to start flights to YVR using it's own metal, it does not require government clearance? What about equipment? Is it allowed to say upguage YYZ from A343 / B744 to A380 as it chooses?

I believe that is the case.

Canada-EU (all 27 countries) is open skies. Any Canadian or EU-based carrier can operate any routes they want between Canada and the EU. Canada also has open skies agreements with several non-EU countries in Europe such as Switzerland. In the case of a few European countries, notably the UK, Canada negotiated an open skies agreement several years before the US.


User currently offlinejuantrippe82 From Bahamas, joined Sep 2011, 26 posts, RR: 0
Reply 23, posted (2 years 4 months 3 weeks 6 days 13 hours ago) and read 7438 times:

Quoting blueflyer (Reply 1):
Strachan, Rovinescu, Raitt and the entire board have to go.

Agreed, I've got a reservation for LGA in June and I'm wondering if I should switch, because I doubt the 'three stooges' are going to make any moves to make things better at AC.



Don't worry, I'm never wrong.
User currently offlineElPistolero From Canada, joined Feb 2012, 1019 posts, RR: 4
Reply 24, posted (2 years 4 months 3 weeks 6 days 11 hours ago) and read 6382 times:

I'll start with the article. I think its fair to say Air Canada is going nowhere. I recall posting PM Harper's statement on the issue -

"Air Canada came to us during the ... global (economic) crisis, and asked specifically for government assistance in a number of areas because of the dangers shutting down the airline would represent to the Canadian economy," Harper said. "I'll be darned if we will now sit by and let the airline shut itself down.

http://www2.canada.com/story.html?id=6282149

I think that can put to rest the idea that AC will be affected in the same way as any other private company in Canada. It won't. And frankly, that statement is the crux of the problem. It allows both sides invoved to avoid the reality of the situation - namely that things cannot continue as they are.

The pilots want the executive out. I don't think anyone observing this from outside AC HQ or, more likely, from outside the Executive suites, thinks this is a bad idea. As labor relations go, AC is the poster child of how to make a bad situation worse. The execs are well compensated because the buck stops with them (major responsibilities etc). Agreed. And now that the company is virtually a laughing stock, perhaps its best to let that buck run its course.

But will that solve everything? No. It might heal relationships and make negotiations easier, but lets face it, there are going to have to be salary cuts. Aviation is a global industry. Cost structures do matter. I m not convinced that it is the whole solution to ACs problems, but cutting salaries will inevitably be a part of the solution.

There is no doubting that what ACE has done to AC is unfair, and that pilots and FAs and other unionized workers are getting the raw end of the deal. But its also becoming increasingly clear that both their stance, and the stance of management, is based on the assumption that the government will not let anything happen to Air Canada. On the basis of Harper's statement, I can understand why.

Its not a foolproof strategy. Heaven forbid the government should renege when the situation gets too bad.

As for competition, I noticed that question about Air France and Vancouver and thought it sounded much too pointed - as if the poster knew there was something deeper in it. So I did what many of us shoud, but few of us actually do. I googled it.

Rob Howard, Member, Provincial Lead of the Air Access file, Legislative Assembly of British Columbia was at the Senate Committee on Transportation and Communications three weeks ago. His words are interesting, not least because they are not neccessarily consistent with some of the things posted on this page. They also hammer home the cost of Canada's relatively backward Aviation policy.

http://www.parl.gc.ca/content/sen/committee/411/TRCM/49434-E.HTM

On SQ:
"Singapore Airlines flew into YVR for about 20 years. They came three days a week. For them, it just did not make sense. It was kind of like operating a hotel three days a week and there were not enough options for their business travellers. They wanted to come daily. They pursued this with their federal government for a few years. They got turned down, and eventually tired of asking, they left. They pulled their service. Now I guess that traffic comes either through San Francisco or Los Angeles, but it is big loss to the community."

Hmmm. Not quite an open skies agreement, by the sound of it. Perhaps its the restrictions that he's referring to.

On EK (skip if you find it too emotive):

"I know Emirates evokes some emotion, but Emirates is just another example. It wanted to come. It was just a direct, non-stop drop-off. There were no beyonds or infiltration into our system. They were told no. They went to Seattle to set up. Part of their marketing program calls themselves the “gateway to Whistler.” That almost brings tears to my eyes because that should not be allowed to happen. That is hurtful, and it would cost YVR between 20,000 and 30,000 seats per year."

And

"We hear stories about Emirates being state-subsidized. There are many airlines around the world that are state-subsidized; New Zealand is one. We have agreements with New Zealand. I dare say Air Canada has had some involvement with the government over the years as well."

Guess he's not on the AC bandwagon then. Note the last line. Says it all, in my opinion. And yes, we've all heard the tired lines about how they want to dump capacity in Canada through their one dally flight in Toronto (because one flight can dump enough capacity to destroy Canadian airlines apparently). Some say they were offered a slot in YVR. Is that a fact? Or hearsay? One of the more interesting points that came out of these hearings is that the negotiations tend to be behind close doors and lots of restrictions are not made public. Why? And if so, how does anyone know what, if anything, related to YVR was on the table? The BC folk themselves seem to be unaware. Interesting point about Air NZ too - we have an open skies agreement with them.

On Taiwan (who knew, eh?)

"I have already talked about Taiwan. There is pent up demand for cargo, and there is a lot of anecdotal evidence, even in my office. My office staff fly back and forth. I guess it was last May; they had to book in September to get a single ticket."

On AF, he says, quite simply, that the damage of the archaic policies has been done. They can fly now, but why would they want to after investing in SEA.

"I want to speak about Air France briefly. Air France wanted to come for years. They could not. They set up in Seattle as well. Now they can come because we have signed with EU, but they have capital, people, networks and dollars invested in Seattle, and I do not know if they will come back. There are other stories."

In light of this, I do think its fair to say that AC has benefited tremendously from protectionism in the past, even if that level of protection is lessening today with things like the Canada-EU agreement. 3 weekly flights are a laughable hangover from the 1960s era. Those kinds of rules are deliberate disincentives and have to be acknowledged as scuh. They are a form of protectionism in themselves, a sort of - "if you come, we will make sure you don't make money for the first few years". This is, after all, an airline that lobbied against open skies with the US in the 1990s. Old habits die hard, they say.

I m not particularly surprised - there seem to by some myths in Canada that are believed - and perpetuated - by many on this board. The cynic in my thinks it might be deliberate. We are all expected to believe that Canada's aviation sector is well run. Australia, by comparison, is a mess. Unsurprisingly, the people who make a living studying it, disagree.

"We have an internationally competitive environment when we look at what is happening in the U.S., Australia and Jordan. There are solid examples of successes that countries have had when they have relaxed their aerospace regulations and gone to a more open skies model. "

As for Open Skies and Canada essentially being an open skies jurisdiction:

"Other countries, such as the United States, Australia, Jordan and others are enjoying good success stories by having a more open air access philosophy. When we look at Asia and the South Pacific — I do not know if you can see this easily — but from a map, Canada has open skies in this region. I will show you the red. We have them with New Zealand and South Korea, and the United States has them with Uzbekistan, Pakistan, India, Thailand, Malaysia, Singapore, Indonesia, Brunei, South Korea, Taiwan, Australia, New Zealand, et cetera. They are eating our lunch, and it is very difficult on all fronts."

Again, no mention of Singapore (yes, I've seen the Transport Canada website) All I can say is perhaps its time to start questioning some of the assumptions and 'facts' put forth by some of my countrymen on this forum. Unless, of course, this gentleman is lying. I somehow trust him - I don't know why. He is talking to the Senate - I think he would have his facts right.



[Edited 2012-04-24 16:38:56]

[Edited 2012-04-24 16:40:36]

User currently offlineboeingorbust From Canada, joined Oct 2011, 165 posts, RR: 0
Reply 25, posted (2 years 4 months 3 weeks 6 days 8 hours ago) and read 4898 times:

Interesting... Not very surprising all the same. It's pretty well exactly what's been going down. Is there an answer? We saw the failure of Jetsgo and sched service of Canjet but with the operation of a/c like the MD-80 and constant maintenance issues not to mention the cheap prices, was it inevitable? Westjet seems to pull decent yields right now but I question whether another sched airline player could survive, especially at todays fuel prices and what the startup costs would be. Who wants to start up an airline these days? Could we see a Virgin Canada? I could really only see Branson wanting to further multiply his world monopoly as he has with his media virgin spinoffs!

User currently offlineyyz717 From Canada, joined Sep 2001, 16259 posts, RR: 56
Reply 26, posted (2 years 4 months 3 weeks 6 days 6 hours ago) and read 4823 times:

Quoting longhauler (Reply 21):
It seems Canada's public has figured out where the problem lies in Air Canada ... and it sure isn't the employees!

Does it really matter? AC is clearly in a slow death spiral. The focus of AC mgmt and employees should be on turning the carrier around, not winning PR battles.

Quoting juantrippe82 (Reply 23):
Agreed, I've got a reservation for LGA in June and I'm wondering if I should switch

I would. It always makes more sense to purchase goods and services for future delivery from stable/profitable enterprises. Canada's most successful carrier - Westjet - begins 7x dailty LGA service next month. Thousands of AC travellers have had their travel plans screwed with or ruined by recent industrial action at AC. No WS or PD customers have been affected.

Quoting ElPistolero (Reply 24):
"Air Canada came to us during the ... global (economic) crisis, and asked specifically for government assistance in a number of areas because of the dangers shutting down the airline would represent to the Canadian economy," Harper said. "I'll be darned if we will now sit by and let the airline shut itself down.

Harper's meddling is very annoying.

Quoting connies4ever (Reply 3):
To say that AC is "protected by Ottawa" I think is entirely misleading. Burdened by Ottawa would be more accurate.

No, protected is more apt. The BTW legislation favoured and protected the airline mgmt. The continued operation by AC of lucrative int'l route authority awarded when it was the favoured carrier decades ago continues to unfairly benefit AC.

[Edited 2012-04-24 21:34:54]


Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineYVRLTN From Canada, joined Oct 2006, 2469 posts, RR: 0
Reply 27, posted (2 years 4 months 3 weeks 6 days 6 hours ago) and read 4856 times:

Quoting pnd100 (Reply 7):
3) AC will be a three tier airline, the mainline will fly to the highest profile routes with an all widebody fleet of 787s & 777s. The second tier will be Canada's Jetstar flying a mixed fleet to lower yielding routes & sun destinations. The third part would be funded by the government to provide connections to remote communities.

Im interested in this one and the "Jetstar" idea.

Where does domestic fit into this outside the WB transcons? Is that included in second tier operations or what should happen to that?

Should all narrow body flying be taken over by Jazz/Chorus? Or maybe just the E-Jet flying? Possibly have Jazz operate the C-Series and leave A320/321 to AC mainline? If you have such an expanded Jazz plus the LCC, that will eliminate a lot of AC pilots on their current terms for better or for worse. Better for AC & their bottom line, but worse for the employees. At the end of the day, it may have to be looked at like the BD / BA take over. If you dont want to leave, do you want a job flying in Canada or no job? Could well be what it will come down to whether the employees like it or not. It may not be fair but it is now 2012 and it is the reallity.

Does anyone know if the new proposed LCC will also have a new union, or even have one at all?

I also think the remote community flying should be tendered out to the best bidder by the government, so airlines like First Air, Calm Air, Pasco, Hawkair, CMA, Georgian etc etc who are best for the job can operate the routes for less cost and then put a AC codeshare on it. Jazz may not mind if they get to do 75+ seat flying...



Follow me on twitter for YVR movements @vernonYVR
User currently offlineblueflyer From United States of America, joined Jan 2006, 4001 posts, RR: 2
Reply 28, posted (2 years 4 months 3 weeks 6 days 6 hours ago) and read 4837 times:
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Quoting skipness1E (Reply 5):
A union approved set up to approve unaffordable salaries?

All the unions collectively get to choose one mediator. He or she would still have to convince either the mediator from the government or management that the unions' proposals are not commercial suicide.

Quoting pnd100 (Reply 6):
how did you arrive at the figure of 64%?

It is my understanding that under Canadian law, shareholder rights are almost absolute at 51%, and absolute at 65%.

Quoting pnd100 (Reply 6):
Most point to executive compensation as some magic cure. I agree that the symbolism matters more than the actual dollars.

Symbolism can be a magic cure. If AC cleaned up ranks among its top executives, it is quite possible that the unions might see it as a positive gesture and be more willing to contribute. Just look at the ongoing AA bankruptcy. AA unions came to an agreement over concessions with US management in case US takes over AA. Some of these concessions have been asked for by AA management for years but kept being rejected because AA unions trust their management about as much as AC unions do theirs.

Quoting pnd100 (Reply 7):
if there was other sources of revenue I think that would have been tapped already.

I can't speak for most Canadian airports, but YYZ and YUL are very far from the shopping center with planes that LHR has become. While they don't need to copy LHR, they could get closer to that model. They don't seem to have a lot of in-terminal advertising either. DFW charges *every* vehicle pulling up to a terminal, even if it is only to drop off or pick up passengers. There are ways to raise additional revenue without impacting the carriers.

Quoting connies4ever (Reply 9):
total costs to AC of ACPPA is on the order of $200M/yr.

On the one hand, it isn't that much considering the huge amounts of money funneled through a carrier the size of Air Canada's, but on the other, it is quite significant in light of losses of $250 millions in 2011 and $25 millions the year before.

Quoting czbbflier (Reply 12):
We can only be in the present and we can only 'move forward'. How convenient.

It's not convenient, it's capitalism, whether we like it or not. Customers and shareholders will not accept higher prices and lower profits to correct the mistakes of the past and compensate employees who may have been screwed in earlier rounds.

Quoting pnd100 (Reply 16):
I love AC but I love Canada more, I'm more interested in what is best for the country as opposed to what is best for the airline.

Does Canada win when cheaper fares are available on foreign airlines at the expense of thousands of tax-paying employees and hundred of tax-paying vendors losing their income because Air Canada has to curtail or end its operations due to the competition from Gulf carriers? I don't pretend to have the answer, but I think it is certainly worth asking.

Quoting pnd100 (Reply 16):
My advice to AC is to not worry about EK because there is no need to compete with them. Let them take the low yielding masses to secondary destinations.

I like Air Canada, I think their upfront product is the best of any North American carrier bar none and better than some European stalwarts such as LH, but I think they have a lot to fear from the Gulf carriers.

Qatar and Etihad offer a premium service that is usually as good as or better than AC (I can't speak from experience about EK), EY literally takes care of its passengers door-to-door (an often underrated convenience in my book), and when it comes to anything other than a short connection, DOH's Premium Terminal beats any Star hub, especially FRA.

On its side, AC currently has an on-board product that is sometimes inferior, sometimes not, Aeroplan, its membership in Star Alliance and corporate contracts. If the Gulf carriers get the unlimited access to Canada they want, it's not just VFR traffic they might siphon off, but a sizable chunk of premium passengers as well.

In the future, AC may retain more premium customers by offering non-stop flights beyond the Middle East when the 787s join the fleet, but just how many destinations in the Far East and South Asia can support non-stop service from YYZ?

Beyond a few new non-stop flights, AC has a very difficult problem on its hands, in that it isn't even its own product that is the biggest issue, but that of its partners. In its current operations, it hands off most of its connecting passengers to LH in FRA, but neither the airport nor its largest tenant offer a product that is on par with Air Canada or the Gulf carriers, and there is nothing AC can do about that, short of trying to funnel as much traffic as possible through ZRH where Swiss has a much better product than its parent, but a smaller network.

Quoting longhauler (Reply 21):
and it sure isn't the employees!

No, it's not, but the union leaderships are not without fault on the other hand. Pilot union leaders can't claim to be entirely in tune with what their membership wants or is willing to accept when they cannot get it to sign off on a tentative agreement negotiated with management, and comments by Strachan regarding outsourcing maintenance are fear-mongering, incendiary, elitist and borderline xenophobic, in other words unacceptable.

Finally, an union leadership that is respected by its membership can easily prevent wildcat strikes and sick-outs if it chooses to, if for no other reason than to avoid exposing their members to possible sanctions. That they didn't prevent the most recent ones can only lead to one of two conclusions.

Quoting ElPistolero (Reply 24):
It allows both sides invoved to avoid the reality of the situation - namely that things cannot continue as they are.

Doesn't binding arbitration force both sides to recognize that reality can no longer be avoided? Either reach an agreement that both sides can live with, or run the risk of swallowing a very bitter but unavoidable one.



I've got $h*t to do
User currently offlineyyz717 From Canada, joined Sep 2001, 16259 posts, RR: 56
Reply 29, posted (2 years 4 months 3 weeks 6 days 6 hours ago) and read 4818 times:

Quoting blueflyer (Reply 28):
Does Canada win when cheaper fares are available on foreign airlines at the expense of thousands of tax-paying employees and hundred of tax-paying vendors losing their income because Air Canada has to curtail or end its operations due to the competition from Gulf carriers?

Yes, Canada (and Canadians) DO win HUGELY when we can purchase goods & services cheaper from abroad. Trade enriches a nation; trade sanctions impoverish it.

If I can save $500 flying EK to India (vs AC/LH), then I can spend the extra saved $500 on other goods and services here at home, something I can't do when I have to pay AC $500 more.

The ONLY thing that increases the standard of living in any nation is productivity improvement. Trade between nations enables countries to specialize in different economic sectors. Labour intensive and yet low skill industries are best located in the third world (that's why we buy clothes from China and use call centres based in India, and increasingly......use LCC's for domestic air travel and 3rd world carriers for int'l air travel).

AC has no future unless it can greatly reduce its unit costs (by 25% to compete with WS, its primary NA competitor) and likely more than 25% to compete with EK and other low cost long haul carriers. I see nothing to suggest that AC can reduce its unit costs.

Quoting boeingorbust (Reply 25):
We saw the failure of Jetsgo and sched service of Canjet but with the operation of a/c like the MD-80 and constant maintenance issues not to mention the cheap prices, was it inevitable?

Jetsgo failed because it expanded too fast. Arguably, it had a shot at success when it operated a small fleet of MD-80's. The rapid addition of 18 F100's threw too much capacity into the market. Allegiant is a successful M80-based carrier which proves it can be done. Canjet failed at operating a sked network because it's focus was in the Maritimes which is overwhelmingly low yield. Canjet ignores the higher yield YYZ-YOW/YUL and YYZ-West Canada markets (yes, I know they operated a token YYZ-YYC daily but that was just a one daily). That both Jetsgo and Canjet operated "classic" fleets was NOT a factor in their demise, IMO.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineboeingorbust From Canada, joined Oct 2011, 165 posts, RR: 0
Reply 30, posted (2 years 4 months 3 weeks 6 days 5 hours ago) and read 4750 times:

Quoting yyz717 (Reply 29):

Jetsgo failed because it expanded too fast. Arguably, it had a shot at success when it operated a small fleet of MD-80's. The rapid addition of 18 F100's threw too much capacity into the market. Allegiant is a successful M80-based carrier which proves it can be done. Canjet failed at operating a sked network because it's focus was in the Maritimes which is overwhelmingly low yield. Canjet ignores the higher yield YYZ-YOW/YUL and YYZ-West Canada markets (yes, I know they operated a token YYZ-YYC daily but that was just a one daily). That both Jetsgo and Canjet operated "classic" fleets was NOT a factor in their demise, IMO.

I was not a follower of either of the two. I can see where you are coming from but I also believe operating costs and fuel are less expensive in the states. Not only that but Allegiant began operations out of smaller airports with lower operating costs that probably gave them the upper hand as well. The point I was also making was that a start up now compared to then would probably be harder and more expensive then it was at that point, making a startup now a set up for failure to many investors I would think.


User currently offlinerobsaw From Canada, joined Dec 2008, 240 posts, RR: 0
Reply 31, posted (2 years 4 months 3 weeks 6 days 5 hours ago) and read 4725 times:

Quoting pnd100 (Reply 16):
Excellent quote. "The best union is none at all." Not because the union itself is a bad thing but rather if you truly cared about your business, you invest in your workers. Unions exist to protect workers from management who at one point did not care about the well being of their staff. This is foolish from a corporate management point of view. WS was cited as an example in the airline industry of a company who has stakeholders. I'm sure no company is perfect but having worked for many of Canada's largest corporations I can tell you the most profitable companies are the ones who follow this type of mutual benefit model.

A completely fanciful view of the benevolence of unions. Unions leaders like corporate executives are all too frequently concerned about their own short-term enrichment at the cost of the union members/shareholders. Plus, the union mentality is based upon a philosophical position that corporations are inherently evil. In ALL my encounters with unions (both as a union member and in management) the underlying modus operandi is to ensure an ongoing adversarial employer-employee relationship; otherwise the union becomes irrelevant. Sure, some unions come in to abusive workplaces to restore some measure of reasonable compensation and treatment for reasonable work but even more often they are trolling for places to unionize simply because they aren't unionized. I've encountered that multiple times at my workplaces where union activists are inciting employees that are happy and uninterested in their anti-employer rants. Sure the mutual benefit model is great - but what if the model is busted because the company is a former crown corporation where employee entitlement is part of what should be a long-dead civil-service culture?


User currently offlineByrdluvs747 From United States of America, joined Jul 2004, 2360 posts, RR: 1
Reply 32, posted (2 years 4 months 3 weeks 6 days 4 hours ago) and read 4694 times:

Quoting pnd100 (Reply 6):
AC can actually benefit with EK / QR / EY because those airlines will take away the low yielding VFR traffic allowing AC to concentrate on higher returns.

LOL! Do you seriously think that EK/EY will fly aircraft to Canada just to capture low yielding traffic. They will siphon off as much premium traffic as they can. Its silly to think otherwise.

Quoting pnd100 (Reply 7):
1) Open up current bilaterals allowing for expansion by current carriers to other points in Canada with the preference going to Star Alliance carriers.

So from one form of protection to another. I would guess that steering a bilateral towards one alliance over another would be deemed illegal.



The 747: The hands who designed it were guided by god.
User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
Reply 33, posted (2 years 4 months 3 weeks 6 days ago) and read 4513 times:

Quoting YVRLTN (Reply 27):
Where does domestic fit into this outside the WB transcons? Is that included in second tier operations or what should happen to that?

To my limited knowledge, all transcons now are A3** with the exception of the daily YYZ-YVR-SYD 77W. There may be the odd fill with a 763. There is also the YYZ-YYC-NRT 763 which I think is 3x going to 5x this summer. In fact a number of rotations YYZ-YEG and possibly YYC are E190s.



Nostalgia isn't what it used to be.
User currently offlineElPistolero From Canada, joined Feb 2012, 1019 posts, RR: 4
Reply 34, posted (2 years 4 months 3 weeks 5 days 23 hours ago) and read 4441 times:

Quoting boeingorbust (Reply 25):
Who wants to start up an airline these days? Could we see a Virgin Canada? I could really only see Branson wanting to further multiply his world monopoly as he has with his media virgin spinoffs!

There are rules about foreign ownership that will stop that from happening even if anyone wanted to. Within Canada, I doubt very much that there is the will (and corresponding capital) to start a new airline.

Quoting blueflyer (Reply 28):

Doesn't binding arbitration force both sides to recognize that reality can no longer be avoided? Either reach an agreement that both sides can live with, or run the risk of swallowing a very bitter but unavoidable one.

It does for the next 2-3 year contract. What happens after that? Another merry-go-round like the one we're witnessing today? These contracts are renewed at regular periods.

Quoting blueflyer (Reply 28):

Does Canada win when cheaper fares are available on foreign airlines at the expense of thousands of tax-paying employees and hundred of tax-paying vendors losing their income because Air Canada has to curtail or end its operations due to the competition from Gulf carriers? I don't pretend to have the answer, but I think it is certainly worth asking.

Yes. Air Canada is a perennial loss maker. It has no returns on investment. Money that goes in, stays in. When the stock price goes down, it disappears. Nothing is being put back into the Canadian economy. Its a 'black hole', if you will. Suffice to say, if its not generating money, its eating money.

In Canada's case, as Yyz17 has pointed out, this 'lost' money is disposable income. Disposable income is a major part of consumption - and therefore a significant component of economic growth. Flushing chunks of it down in AC benefits no one.

Suffice it to say that all of this seems all the more absurd given that the Bank Of Canada's Governor Carney is railing everyday about household debt levels. Disposable income helps pay off debt just that little bit faster. Overpaying for goods...generally not a good idea. The key is to get the best value-for-money. And thats only possible in a true competitive market, not an allegedly "Open skies" one that is filled with disincentives for competitors.

Quoting blueflyer (Reply 28):
In the future, AC may retain more premium customers by offering non-stop flights beyond the Middle East when the 787s join the fleet, but just how many destinations in the Far East and South Asia can support non-stop service from YYZ?

Beyond a few new non-stop flights, AC has a very difficult problem on its hands, in that it isn't even its own product that is the biggest issue, but that of its partners. In its current operations, it hands off most of its connecting passengers to LH in FRA, but neither the airport nor its largest tenant offer a product that is on par with Air Canada or the Gulf carriers, and there is nothing AC can do about that, short of trying to funnel as much traffic as possible through ZRH where Swiss has a much better product than its parent, but a smaller network.

As sick as I am of EK (an airline I have flown once 7 years ago and will never fly again), I don't think AC has the 'right' to carry Canadians anywhere in the world. So what if they can't fly to the ME or Sourth Asia? At the end of the day, is this about the airline? Or the consumer? There is a tendency in Canada to make this about the airline.

AC should just be thankful it has control over the transatlantic routes with its marginally better product. It has not been bestowed with a divine right to insisnt on flying everywhere that a Canadian might want to go (and thank god for that). The EKs, EYs etc are just a product of the global economy. Love them or hate them - they are bringing new efficiencies to the global aviation market. I mean, even LH has finally deigned to put PTVs in Y on its aircraft. That takes some doing. Personally, I think the threat is overblown. There isn't much premium traffic going from Canada to South Asia. There might be some going to the ME. And EK is not going to replace AC on transatlantic runs, where most of its money is made, nor is it going to replace AC on East Asia (China) runs.

But all of that is besides the point because there is an airline doing what AC alleged EK was doing. And in a far better way in my opinion. That airline is TK. Granted they're going through the "Open Skies" in name policy of getting minimal frequences and begging for more (they just got their fourth). That said, they will probably get daily frequences in...3 years (this passes off for 'Open skies', no doubt). Their prices are rock bottom. Their product, while far from stellar, offers the best value-for-money out there. They're probably a far bigger threat to AC. Well, they will be, when they're actually allowed to compete in a proper manner.


User currently offlineStarAC17 From Canada, joined Aug 2003, 3376 posts, RR: 9
Reply 35, posted (2 years 4 months 3 weeks 5 days 22 hours ago) and read 4400 times:

Quoting blueflyer (Reply 28):
I like Air Canada, I think their upfront product is the best of any North American carrier bar none and better than some European stalwarts such as LH, but I think they have a lot to fear from the Gulf carriers.

It's off topic so I'm only going to make the point once. Not giving EK rights is not because of AC stiff arming the government to deny them rights, AC probably could code share or attempt JV with EK to a mutual benefit if they wanted to (however EK doesn't really partner up all that much).

Here are a few points about this and feel free to counter me with a source if I am wrong.

- Canada's aviation policy is based on a point to point model and the government deems that preferable and if you can prove a market for O&D you get more rights, we want Indian carriers but they are a mess.
- 3x Weekly is a standard and EK deemed themselves special and wanted daily or nothing when offered 6x weekly EY came in and took 3 slots and EK
- Canada has nothing to gain from whatever access it would have serving just the UAE
- In the long term the presence of EK will decrease competition as the Euro carriers will reduce and eliminate services especially to cities like YYC and YUL and the YOW/YEF Europe will lose their profitability pissing off those residents whom hate having to transit YYZ to cross the pond. In Australia the options to Europe are much less available than in the 90's as you just have QF, BA, and VS as direct service. The market is mostly, EK, EY, QR, and Asian carriers are the Europe options. Also EK down here is basically ripping off SQ's model and they are a second comer to it.

Quoting yyz717 (Reply 29):
If I can save $500 flying EK to India (vs AC/LH), then I can spend the extra saved $500 on other goods and services here at home, something I can't do when I have to pay AC $500 more.

I agree with everything you are saying here but you do tend to rail against EK as well which I find Ironic in a way.

Quoting robsaw (Reply 31):
A completely fanciful view of the benevolence of unions. Unions leaders like corporate executives are all too frequently concerned about their own short-term enrichment at the cost of the union members/shareholders.

That's the problem with modern capitalism. Right or left no one seems to care about long term sustainability. When unions actually mattered (when more employees were union than not, now its like 8%), companies cared about long term performance and not just quarter to quarter results.

Quoting blueflyer (Reply 28):
EY literally takes care of its passengers door-to-door (an often underrated convenience in my book), and when it comes to anything other than a short connection, DOH's Premium Terminal beats any Star hub, especially FRA.

IIRC EY is losing money also, not sure about QR.



Engineers Rule The World!!!!!
User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
Reply 36, posted (2 years 4 months 3 weeks 5 days 21 hours ago) and read 4322 times:

Quoting StarAC17 (Reply 35):
AC probably could code share or attempt JV with EK

It may surprise you - and many other A.netters - that AC already has an interline agreement with EK. As well as GF & QR.

http://www.aircanada.com/en/travelinfo/before/eticket/index.html

There was a lot of media noise recently when WS inked a similar agreement.

Yawn.



Nostalgia isn't what it used to be.
User currently offlineStarAC17 From Canada, joined Aug 2003, 3376 posts, RR: 9
Reply 37, posted (2 years 4 months 3 weeks 5 days 21 hours ago) and read 4258 times:

Quoting connies4ever (Reply 36):
It may surprise you - and many other A.netters - that AC already has an interline agreement with EK. As well as GF & QR.

It doesn't, I really don't think there is a lot of issues between EK and AC, there are issues with the Canadian government and the UAE acting on behalf of EK.



Engineers Rule The World!!!!!
User currently offlinepnd100 From Canada, joined Mar 2009, 343 posts, RR: 0
Reply 38, posted (2 years 4 months 3 weeks 5 days 13 hours ago) and read 3992 times:

Hi everyone, I have been a little busy so it took a while for me to respond. Looks like we have a healthy debate going here!

Quoting longhauler (Reply 19):

There is no doubt trust is at the foundation of business. There are those who have a negative view of unions but I think far more have a negative view of corporate management. The actions of a minority on both fronts create an unfair reputation for all.

Quoting ElPistolero (Reply 24):
"Air Canada came to us during the ... global (economic) crisis, and asked specifically for government assistance in a number of areas because of the dangers shutting down the airline would represent to the Canadian economy," Harper said. "I'll be darned if we will now sit by and let the airline shut itself down.

http://www2.canada.com/story.html?id=6282149

I think that can put to rest the idea that AC will be affected in the same way as any other private company in Canada. It won't. And frankly, that statement is the crux of the problem. It allows both sides invoved to avoid the reality of the situation - namely that things cannot continue as they are.

Thanks for posting this link & the information. It seems that 1) AC only wants to be a private company when convenient as it has no problem asking the government to bail it out. 2) If AC is of such importance to Canada then maybe we should think about re-nationalizing it & treat it as a public service, forgetting about profits. Please note that I am not necessarily endorsing this solution but trying to make the point that the government should either go all in or all out.

Quoting ElPistolero (Reply 24):
Rob Howard, Member, Provincial Lead of the Air Access file, Legislative Assembly of British Columbia was at the Senate Committee on Transportation and Communications three weeks ago. His words are interesting, not least because they are not neccessarily consistent with some of the things posted on this page. They also hammer home the cost of Canada's relatively backward Aviation policy.

This information is really discouraging as an aviation enthusiast & a citizen. Our policy seems obstructive & does not seem to be connected with the best interests of Canadians. As always this is my formulation based on the information I have been presented. I have an open mind & if evidence can be shown the way ElPistolero has to the contrary I would consider it.

Quoting YVRLTN (Reply 27):
Im interested in this one and the "Jetstar" idea.

Where does domestic fit into this outside the WB transcons? Is that included in second tier operations or what should happen to that?

Sadly YVRLTN this was just an idea that I read on a forum online (I can't even remember where exactly). I think the ideas have merit but whether anyone with the power to make these ideas a reality is involved or listening, I don't know. Personally if I was asked I would suggest developing an express brand (or revamping the Rapidair brand) to fly the trunk routes. I think AC would be better off with different brands to appeal to different segments.

Quoting blueflyer (Reply 28):
I can't speak for most Canadian airports, but YYZ and YUL are very far from the shopping center with planes that LHR has become. While they don't need to copy LHR, they could get closer to that model. They don't seem to have a lot of in-terminal advertising either. DFW charges *every* vehicle pulling up to a terminal, even if it is only to drop off or pick up passengers. There are ways to raise additional revenue without impacting the carriers.

Interesting. Thanks for sharing. Personally I like the "mall" airports. What else are people waiting for flights supposed to do? Options are nice when you have a couple of hours in between flights.

Quoting blueflyer (Reply 28):
It's not convenient, it's capitalism, whether we like it or not. Customers and shareholders will not accept higher prices and lower profits to correct the mistakes of the past and compensate employees who may have been screwed in earlier rounds.

Agreed. In my humble opinion we cannot move forward if we try & correct all past injustices. It may sound insensitive but consider that every effect has a cause which had an effect and so on. Where would it stop? If someone can show me a way to provide justice to the affected employees in a fiscally responsible manner I'd be for it. So far it appears that correcting the injustice would cause the company to cease operations & create a new injustice for present staff.

Quoting blueflyer (Reply 28):
In the future, AC may retain more premium customers by offering non-stop flights beyond the Middle East when the 787s join the fleet, but just how many destinations in the Far East and South Asia can support non-stop service from YYZ?

With 787s a lot of cities have sufficient O&D demand I think. I do not have figures for actual travel but based on the ethnic origins of people in Toronto I can make an assumption that at least two cities in India, one city in Pakistan & maybe one in Bangladesh / Sri Lanka would have enough O&D from YYZ to South Asia. In the Far East, Taiwan has been mentioned & I'd add the Philippines & Vietnam to that list.

Having said that please note that this is a highly price sensitive & low yield market. It isn't the premium traffic of PVG, HKG or NRT. It isn't LHR or FRA. AI & PK currently provide nonstops & fill planes on price alone. If I was in AC management I would select one destination in the subcontinent & aim to serve it well, maybe BOM or DEL. At the most I would also add BKK.

Quoting yyz717 (Reply 29):
Yes, Canada (and Canadians) DO win HUGELY when we can purchase goods & services cheaper from abroad. Trade enriches a nation; trade sanctions impoverish it.

If I can save $500 flying EK to India (vs AC/LH), then I can spend the extra saved $500 on other goods and services here at home, something I can't do when I have to pay AC $500 more.

Agree entirely yyz717. For me personally since travel is my passion I would spend it in the air. Most people would rather spend the extra $500 here. That is better for the economy than what I do!

Quoting Byrdluvs747 (Reply 32):
LOL! Do you seriously think that EK/EY will fly aircraft to Canada just to capture low yielding traffic. They will siphon off as much premium traffic as they can. Its silly to think otherwise.

To be fair Byrdluvs747, I was pointing out that most of EK's passengers are low yield VFRs flying to secondary cities from DXB that other airlines don't fly to. I understand that they also aim for premium traffic like any airline but their target markets do not overlap AC's as much as is perceived. If pax are scaled, EK aims for the 1s & 2s along with 8s & 9s. I think AC's product appeals more to the 3-4-5s of the world.

Quoting Byrdluvs747 (Reply 32):
So from one form of protection to another. I would guess that steering a bilateral towards one alliance over another would be deemed illegal.

Again I'm not suggesting that they do this. I wanted to point out that AC should not have an objection to SQ as they are in the same alliance & they can work together. I do not believe in bilaterals in this day & age in the first place. I personally would prefer open skies with negotiations direct between airports & airlines. I understand that most do not share my view but I was simply trying to make a point. Hope you understand what I'm trying to say.

Quoting ElPistolero (Reply 34):
As sick as I am of EK (an airline I have flown once 7 years ago and will never fly again), I don't think AC has the 'right' to carry Canadians anywhere in the world. So what if they can't fly to the ME or Sourth Asia? At the end of the day, is this about the airline? Or the consumer? There is a tendency in Canada to make this about the airline.

Agreed. This is what is portrayed by some. That AC has some sort of inherent right to fly Canadians.

Quoting StarAC17 (Reply 35):
- In the long term the presence of EK will decrease competition as the Euro carriers will reduce and eliminate services especially to cities like YYC and YUL and the YOW/YEF Europe will lose their profitability pissing off those residents whom hate having to transit YYZ to cross the pond. In Australia the options to Europe are much less available than in the 90's as you just have QF, BA, and VS as direct service. The market is mostly, EK, EY, QR, and Asian carriers are the Europe options. Also EK down here is basically ripping off SQ's model and they are a second comer to it.

Earlier longhauler pointed out that 70% of the traffic ex Canada to Europe is O&D. That alone would warrant European carriers keeping service to Canada. The connecting passengers who fly BA, LH, KL, AF today would mostly not go to EK if the latter had more frequency. They don't like the crowded A380, they don't like the long flight to DXB. I guarantee you that EK's product / price is not SO much better that all of the remaining connecting traffic would choose them over European carriers. Yes some will go, yes some premium traffic will go. It will not however be the mass migration that is depicted. The airlines that would suffer if EK expanded in Canada are AI & PK. However they have their own advantages offering nonstop flights. That is where the extra EK market is today.

SQ's model was also based on offering premium service across all classes. It's product & fares reflect that. EK has undoubtedly borrowed some of SQ's model but they've added their own mix by targeting the extremes of fares. Do a quick fare search, I'd be surprised if SQ provides a cheaper fare than EK on the majority of occasions. The other thing we must consider is geography. There are very few "good" ways to get from Australia / New Zealand to Europe. Canada's location & access to oceans allows it to have a flexibility & natural protection that other nations don't have. DXB is only a convenient transit point from Canada to East Africa & South Asia. Comparing flight times to Europe it is not as convenient to fly from Canada to DXB to West Africa, South Africa, East Asia, the Far East & Oceania.

Quoting StarAC17 (Reply 35):
Quoting robsaw (Reply 31):
A completely fanciful view of the benevolence of unions. Unions leaders like corporate executives are all too frequently concerned about their own short-term enrichment at the cost of the union members/shareholders.

That's the problem with modern capitalism. Right or left no one seems to care about long term sustainability. When unions actually mattered (when more employees were union than not, now its like 8%), companies cared about long term performance and not just quarter to quarter results.

This is what I also feel StarAC17. I was just lamenting to a colleague that stock analysts are obsessed with growth. Not sustainable growth but rapid, unsustainable growth. It creates unreasonable expectations. Like I said before I have been a part of a union, part of union management, a worker, a business partner & in corporate management. I've been fortunate to see things from all angles. No group is as portrayed by the media. The problems fester & grow because the level of interaction, co-operation & insight between the groups is often low. Trust can be fostered if more people from each group reached out to try & understand where the other group is coming from. This isn't just wishful thinking, I've seen it work. The root cause of these business issues is a simple lack of communication. Yet that simple problem does not have a simple solution & it costs the world billions.

Quoting connies4ever (Reply 36):
Quoting StarAC17 (Reply 35):
AC probably could code share or attempt JV with EK

It may surprise you - and many other A.netters - that AC already has an interline agreement with EK. As well as GF & QR.

http://www.aircanada.com/en/travelinfo/before/eticket/index.html

There was a lot of media noise recently when WS inked a similar agreement.

Thanks for the information! Once again an example of how the media has reported a story from an angle as opposed to simply reporting the facts.


User currently offlineElPistolero From Canada, joined Feb 2012, 1019 posts, RR: 4
Reply 39, posted (2 years 4 months 3 weeks 5 days 12 hours ago) and read 3914 times:

Quoting StarAC17 (Reply 35):
Not giving EK rights is not because of AC stiff arming the government to deny them rights, AC probably could code share or attempt JV with EK to a mutual benefit if they wanted to (however EK doesn't really partner up all that much).

No, of course it had nothing to do with AC strong arming the government. Why else did the Government go on record parroting AC's soundbites?

And in the House of Commons, Government House Leader John Baird suggested Canada’s airline industry would have been decimated: “It would have cost Canada literally tens of thousands of jobs and was not in Canadians’ best interest,” he said. “That is why we said no.”

http://www.theglobeandmail.com/news/...ne-feud-tories-say/article1806138/

Ever wonder where that bizzare number came from?

"The impact of greater UAE access to Canada would mean the loss of nearly 2.5 million international passengers putting over 20 international flights at risk representing over 10,000 direct and indirect jobs*."

http://www.aircanada.com/en/about/media/facts/industry/emirates.html

When a government starts parroting unsubstantiated soundbites provided by airlines, you can bet your last dollar theres been some undue interference. I mean, if you really think about it, the statement makes no sense. Canada will just 'lose' 2.5 million passengers? Where will they go? Disappear into thin air? I disagree. Air Canada 'may' lose some passengers (2.5 million seems a bit of stretch), but they will still use Canadian airports and Canadian services. Unless, of course, you are YVR, then, well, SEA won because of Fed policies. Furthermore, given AC's cost-cutting/LCC philosophy, I fail to see how an A380 a day won't create more jobs than it loses. More baggage handlers. More work for caterers etc etc. I daresay more jobs would be created than lost. AC's all but killed the aviation support industry with its nickel and diming.

Quoting StarAC17 (Reply 35):
- 3x Weekly is a standard and EK deemed themselves special and wanted daily or nothing when offered 6x weekly EY came in and took 3 slots and EK

3x weekly is an archaic rule that needs to be fixed. This isn't the 1970s with 707s doing around the world trips that makes 3x weekly feasible. Note what Rob Howard said about SQ. 3 weekly does not make sense - its like keeping a hotel open for 3 nights a week. That airlines are willing to put themselves through this just goes to show how underserved they think Canada is. They're obviously seeing some potential that AC isn't willing to acknowledge, or else AC would be growing.

Quoting StarAC17 (Reply 35):
- Canada's aviation policy is based on a point to point model and the government deems that preferable and if you can prove a market for O&D you get more rights, we want Indian carriers but they are a mess.
Quoting StarAC17 (Reply 35):
- In the long term the presence of EK will decrease competition as the Euro carriers will reduce and eliminate services especially to cities like YYC and YUL and the YYZ to cross the pond.

I sense a contradiction in that. If rights are based on O&D, then EU airline operating a daily frequency to Canada prior to Canada-EU Open skies would have proved O&D. Correct?

How, then, would EK's entry have any impact. Does anybody seriously believe that Canadians are going to fly to Europe via DXB?

To put it very mildly, if European routes are based on O&D, which most of the legacy ones should be, if our policy is to be deemed successful, then they have nothing to lose. As for YEG losing frequency, I fail to see how. Will EK out of YOW isn't used to AC dropping unprofitable routes (or have you forgotten the righteous political indignation that comes with it?), Who exactly will AC be pissing off who they haven't pissed off by dropping domestic routes in the past?

Quoting StarAC17 (Reply 35):
- Canada has nothing to gain from whatever access it would have serving just the UAE

Incorrect. And this seems to be a recurring problem, so I will highlight it - AIR Canada has nothing to gain. Canada has plenty to gain. Why would I say that? Well, less than two years after that self-righteous indignation about the UAE not being a worthy ally, among a wide array of insults, John Baird decided to go back to fix relations.

"“Last year, there was some profound disagreements between Canada and the United Arab Emirates,” Baird said. “I’m pleased to say I’ve had two or three bilateral but substantive discussions about Canada-U.A.E. relations with my counterpart Sheik Abdallah (Bin Zayed Al-Nahyan). (The talks) have been good, positive, warm, constructive.”

He added:“I think relations are certainly on an upward trajectory."

http://news.nationalpost.com/2011/11...g-after-military-eviction-in-2010/

Now why would he bother trying to fix relations with a country after they publicly refused to renew our lease to military base and allegedly campaigned against us in the UNSC? Could it, just could it, be that Canada needs a good relationship with the UAE? Or is it because Canada suddenly decided to be very forgiving towards a country it said was not a 'true friend' (or something along those lines). I somehow think that it was deemed to be in Canada's national interest to mend relations. Which suggests that the UAE has plenty to offer Canada. And then some more, if access is given. That said, I don't expect the government to reverse its policy tomorrow - or soon. It would be the equivalent of painting a bullseye on themselves at Parliament. Too much political capital at stake.

All of this does leave me wondering why such myths persists when the facts suggest the opposite.

Quoting StarAC17 (Reply 35):
In Australia the options to Europe are much less available than in the 90's as you just have QF, BA, and VS as direct service. The market is mostly, EK, EY, QR, and Asian carriers are the Europe options. Also EK down here is basically ripping off SQ's model and they are a second comer to it.

Of course. EK drove out the Europeans. Not SQ, TG, CX etc, all of whom have more frequences to more Australian cities than EK, EY and QR ( the latter has one daily flight to MEL). The simple truth is that the middling European carriers lost to the Asian ones, and the Gulf carriers pounced on the rest. SQ is the one that stole the premium and high yield Y traffic. EK, EY are picking up low-yield traffic. I daresay there is more capacity on Europe-Australia now than there ever has been. And the quality of service offered by Australian carriers, both domestically and internationally, is several notches higher than AC. That their pilots earn a lot more than their global counterparts all over the world (including at AC), is the cause of their current profitability problems on their international legs (they're profitable domestically).To top it off, you've ripped that line straight off AC's webpage. It makes for a good soundbite in Canada, but it lacks substance.

And what does the BC provincial lead on the matter have to say about Australia? That they have benefitted tremendously from it. But what would he know, right?

Quoting StarAC17 (Reply 37):
It doesn't, I really don't think there is a lot of issues between EK and AC, there are issues with the Canadian government and the UAE acting on behalf of EK.

Apart from dedicating an entire webpage of questionable 'facts' (tens of thousands of jobs, European airlines stopping service to Australia etc etc), and Rovinescu's bitter pronouncements at international fora (even while his QF and BA counterparts make it clear that they believe that they can compete with EK - Rovinescu and AC are fairly clear about their ability (or lack thereof) to compete), theres no issues.

The spat allegedly began when AC wanted 50% of profits on the route without investing a dime in it. That's an odd stance to have (If its true). For any airline. AC does not, in fact, have a god given right to earn half of every dollar spent on travel out of Canada.

http://www.thestar.com/opinion/edito...-canada-s-hypocrisy-on-uae-exposed

But then again, many on this board are interchanging Canada and AIr Canada as if they are the same thing. They are not. AIr Canada is not Canada. Its just a badly run airline that the political party in power is hell bent on supporting. (I don't think the Liberals care too much about AC, after Dee reneged on his promise to Dion, not to mention his slightly over the top criticism of Bob Rae a little later).

Suffice it to say that despite everything that AC has had going in its favor, it has somehow managed to end up in a dire financial state not once, but twice, in three years. This government will not let it go under. And because of that, this deadlock will not come to a lasting solution. Even arbitration will only buy it a few years - till the arbitrated contract expires.

[Edited 2012-04-25 16:05:23]

User currently offlineStarAC17 From Canada, joined Aug 2003, 3376 posts, RR: 9
Reply 40, posted (2 years 4 months 3 weeks 5 days 9 hours ago) and read 3765 times:

Quoting ElPistolero (Reply 39):
3x weekly is an archaic rule that needs to be fixed. This isn't the 1970s with 707s doing around the world trips that makes 3x weekly feasible. Note what Rob Howard said about SQ. 3 weekly does not make sense - its like keeping a hotel open for 3 nights a week. That airlines are willing to put themselves through this just goes to show how underserved they think Canada is. They're obviously seeing some potential that AC isn't willing to acknowledge, or else AC would be growing.

E-mail your MP about it then if you disagree. The house of commons has the power to change it.

Quoting ElPistolero (Reply 39):
I sense a contradiction in that. If rights are based on O&D, then EU airline operating a daily frequency to Canada prior to Canada-EU Open skies would have proved O&D. Correct?

Most routes that run daily or more are and yes as the demand goes up more rights are given. There is no issue with giving more rights to CX because they have the demand. Yes there is demand for EK in Canada and I personally think they should get dailty right to YYZ and two other cities. They declined something very similar to that IIRC.

Quoting ElPistolero (Reply 39):
Incorrect. And this seems to be a recurring problem, so I will highlight it - AIR Canada has nothing to gain. Canada has plenty to gain. Why would I say that? Well, less than two years after that self-righteous indignation about the UAE not being a worthy ally, among a wide array of insults, John Baird decided to go back to fix relations.

Canadians are not going to Dubai when getting on EK, they are going to Africa or South Asia. As of right not the government see the demand for Dubai as not sufficient to increase the loads.

Quoting ElPistolero (Reply 39):
The spat allegedly began when AC wanted 50% of profits on the route without investing a dime in it. That's an odd stance to have (If its true). For any airline. AC does not, in fact, have a god given right to earn half of every dollar spent on travel out of Canada.

AC's loss and if the people and AC and EK are supposed to be adults there should have been a negotiation.

The biggest issue I have with all of this and Canada isn't blameless is the fact that EK (who is a private company) is so political and when they don't get what they want then the government of the UAE threatens to punish other Canadian interests there whom having nothing to do with this issue.
As Canadians we should call that bluff because at the end of the day $1.5 billion is nothing for a $1.4 trillion dollar economy, it's literally 1/1000 of Canada's GDP. There are better opportunities elsewhere.

I could go on about this but its for Non-Av, but I don't see spats like this with Canada and the US. If there is a disagreement you don't see either country attempt to rip up signed agreements like NAFTA..



Engineers Rule The World!!!!!
User currently offlineElPistolero From Canada, joined Feb 2012, 1019 posts, RR: 4
Reply 41, posted (2 years 4 months 3 weeks 5 days 8 hours ago) and read 3692 times:

Quoting StarAC17 (Reply 40):
Most routes that run daily or more are and yes as the demand goes up more rights are given. There is no issue with giving more rights to CX because they have the demand. Yes there is demand for EK in Canada and I personally think they should get dailty right to YYZ and two other cities. They declined something very similar to that IIRC.

I don't disagree, but you're dancing around the issue. If AF/KL/LX/OS/LH etc have proven O&D traffic between Canada and their countries, then EKs entry is irrelevant. Why should anybody in Canada be concerned about the connecting traffic that these airlines are carrying? I should note that you explicitly made this claim (as have many many others)

Furthermore, I've heard these rumors about an offer being put on the table too. The problem in Canada is that, despite its status as a transparent democratic nation, no one knows what the offer was. And I don't think anyone will, namely because the PR campaign that took place after it was not exactly unbaised. The Government was very clear on where it stood on the UAE (the defence minister was equally clear on where he stood). Of course thats changed in the last 6 months.

Quoting StarAC17 (Reply 40):
Canadians are not going to Dubai when getting on EK, they are going to Africa or South Asia. As of right not the government see the demand for Dubai as not sufficient to increase the loads.

Is everybody boarding a KL flight in YYC going to AMS? If so, what damage is EK going to do to that route? If not, doesn't it boil down simply to the market making its choices? Which airline a passenger chooses to get to his destination should be irrelevant to the government. As things stand, it is not.

This is all the more absurd in light of the fact that AC buys lots of goods from China, rather than Canadian businesses, because they are cheaper. That they are cheaper because of lax labor laws, government tax breaks etc doesn't seem to register with the AC crowd who insist that EK offers unfair competition. Well, so do AC's Chinese suppliers. At the cost of Canadian businesses and jobs.

I don't see anything wrong with it - thats just the way the world is. Well, thats how it is for most of Canada. Not for AC. AC is different. Should it be? I think not. But it is...for whatever reason.

Quoting StarAC17 (Reply 40):
The biggest issue I have with all of this and Canada isn't blameless is the fact that EK (who is a private company) is so political and when they don't get what they want then the government of the UAE threatens to punish other Canadian interests there whom having nothing to do with this issue.

This is off-topic, so I will keep it short. All I will say is that negotiations are rarely as segregated or exclusive as the Govt PR crew suggested. Nor was there any real punishment. If there had been, there would have been reciprocal punishment. All that happened was that negotiations stalled completely. One of the items on that negotiation list was the renewal of a lease to a military base that had expired. In simple words, the lease had run out and it wasn't renewed after negotiations. Now if the UAE had thrown Canada out while the lease was still in effect (ie a year earlier), then I might have used the word punishment. Nor are issues de-linked during negotiations, as we are seeing with the rather bizzare fluctuation in relations between India and LH group countreis (Switzerland's government found itself bearing the brunt of AIs government handlers' anger for a little while there.

Quoting StarAC17 (Reply 40):
There are better opportunities elsewhere.

There may be, but we also have the former transport minister who took the strongest stance against EK, engaging in more bilateral talks with his UAE counterpart as Foreign Minister, than his predecessor. I suspect the opportunities there are pretty good.

But like I said elsewhere, I have always felt that the gulf carrier threat to AC is overblown. AC will face Middle Eastern competition in the coming years, and it wont be from the Gulf Carriers. It will be from Turkish. I read on another thread earlier today that TK will start its 5th frequency to YYZ in Winter. Forget EK, TK might end up taking a lot more traffic from AC/LH. For one, it is a star alliance airline. And more importantly, it will allow pax to bypass LH and FRA. LH's connection times on South Asia flights are pretty meh. In any event, LH is cutting back on service to South Asia (HYD, Calcutta) gone, Chennai supposedly being considered for a cut too. It doesn't surprise me that they're losing India. They put their eggs in the wrong basket (AI). Point being - AC's ability to serve India through *A partners is decreasing. Personally, I would attribute that to LH being mired in mediocrity. I am *G, I fly regularly to India and I wouldn't touch LH with a barge pole.

As for the topic at hand, I will maintain that AC is going nowhere. It will be bailed out. Again. I wish it wouldn't. I think Canada deserves a well-run airline. I must admit to being baffled by AC's current predicament. An airline with arguably some of the best pilots in the industry and an increasingly sound safety culture, not to mention pretty solid, if uninspired, flight attendents, is doing its damndest to declare war on these two. I know cost structures have to be cut, but do you really want to upset the main service deliverers?

I recently read an article about AI having an extremely unhealthy employee to aircraft ratio. Interestng statistic, I thought. How does AC fare compared to, say US airlines and Euro airlines? Could ACs cost structure be reflective of overstaffing in certain areas?


User currently offlinepnd100 From Canada, joined Mar 2009, 343 posts, RR: 0
Reply 42, posted (2 years 4 months 3 weeks 5 days 8 hours ago) and read 3680 times:

ElPistolero & StarAC17, you both have valid points. This is how the issue is. Neither side is without some fault or miscalculation. If AC, EK & their respective governments can work together it would be for the benefit of all parties. Leaving aside the externalities of other carriers or governments, I'm curious what steps you would take to restore AC to good shape. Let us assume for a moment that you had government & union clearance to make the necessary changes, what would you do as head of AC?

User currently offlineANM604 From Canada, joined Feb 2012, 141 posts, RR: 0
Reply 43, posted (2 years 4 months 3 weeks 5 days 8 hours ago) and read 3642 times:

Quoting ElPistolero (Reply 39):
I daresay more jobs would be created than lost. AC's all but killed the aviation support industry with its nickel and diming.

  Here we go again, blaming AC for "killing the aviation support industry". Really? Care to explain how? I hate to break it to you, but ALL airlines are constantly trying to cut costs, and if said service is costing them to much, they are more then entitled to go elsewhere. WS does the exact same thing, except to a larger extent. They know companies like Swissport etc want their business, and they drive them to rock bottom prices. EK will go with whatever company is the cheapest, which means paying their workers minimum wage (which is far less then AC rampee's make). How exactly does that benefit the airline industry?

Quoting ElPistolero (Reply 39):
3x weekly is an archaic rule that needs to be fixed

Read again, they were offered 6 slots, but threw a hissy fit. They have no one to blame but themselves for not scooping up the 6 slots, saying thank you, we'll be back in 3 years with proof we can at least support daily flights to YYZ. Instead they tried to strong-arm their way into more slots. Our Government stood up and said thanks, but we don't deal with babies, which is exactly what EK deserved.

Quoting ElPistolero (Reply 39):
How, then, would EK's entry have any impact. Does anybody seriously believe that Canadians are going to fly to Europe via DXB?

They most certainly would to save money. There are people everyday who will fly CAN-USA-EUR if it means they save $100 on flights.

Quoting ElPistolero (Reply 39):
Canada has plenty to gain.

No, in fact we don't have much to gain from the UAE, as has been pointed out. We don't need them.

Quoting ElPistolero (Reply 39):
Suffice it to say that despite everything that AC has had going in its favor, it has somehow managed to end up in a dire financial state not once, but twice, in three years

Dire financial straits? It's not great, but not as horrific as the media likes to portray it. They are sitting on a decent pile of cash, and while they have some upcoming liabilities, they should be fine. They have posted operating profits consistently.

Quoting StarAC17 (Reply 40):
I could go on about this but its for Non-Av, but I don't see spats like this with Canada and the US

Agreed. Back on topic.

Like others have pointed out, the hatred between management and unions is the biggest threat to this company, plain and simple. I wouldn't mind if a wholesale change included both management and union heads. Employee wages (excluding the pension plans, which should all be changed), and executive compensation are not going to make it or break it for us. That's not to say they should be ignored either. Another big threat to AC is the huge taxes/fees it pays to Gov, whether it is from the ACCPA, or increased airport/nav can/fuel taxes. This applies to both federal, and provincial governments. Like others have pointed out, there needs to be some sort of dramatic reduction from all levels of Government. The CPA with Jazz is also a huge money loser, and that needs to be chopped out and put out to market, so other companies can bid on parts of it. There's no reason why Air North, First Air, Pacific Coastal etc can't be doing some of the regional flying for AC. They need to dump the inefficient Jazz contract and break it into smaller pieces, or not at all. These are just some of the "big" issues facing AC as it stands.


User currently offlineStarAC17 From Canada, joined Aug 2003, 3376 posts, RR: 9
Reply 44, posted (2 years 4 months 3 weeks 5 days 7 hours ago) and read 3600 times:

Quoting ElPistolero (Reply 41):
I don't disagree, but you're dancing around the issue. If AF/KL/LX/OS/LH etc have proven O&D traffic between Canada and their countries, then EKs entry is irrelevant. Why should anybody in Canada be concerned about the connecting traffic that these airlines are carrying? I should note that you explicitly made this claim (as have many many others)
Quoting ElPistolero (Reply 41):
Is everybody boarding a KL flight in YYC going to AMS? If so, what damage is EK going to do to that route? If not, doesn't it boil down simply to the market making its choices? Which airline a passenger chooses to get to his destination should be irrelevant to the government. As things stand, it is not.

I have said that I support them getting more access but not unlimited access. which I see as a perfectly acceptable compromise.

Quoting pnd100 (Reply 42):
I'm curious what steps you would take to restore AC to good shape. Let us assume for a moment that you had government & union clearance to make the necessary changes, what would you do as head of AC?

I would determine where they are losing money and concentrate on those areas, I know that they have made recent operating profits as recent as 2010 so their business model isn't all doom and gloom.

If they are showing loses mostly because of debt interest and have sufficient cash available to whether that storm then I think that is good strategy because less debt is good long term. Investors don't like it now but selling of assets to get the stock prices up will mean we are back to this in a few years.

Cuts across the board!! Management takes double the cut that workers need to to show that they are all in it together. Also seek out partnerships with other airlines in areas that you are interested in serving in the long term even if they are outsite *A.

I think the reasons for this article are that AC's labour relations are at an all time low and there is no signs of it stopping. That needs to be rectified in order to get anywhere.



Engineers Rule The World!!!!!
User currently offlineElPistolero From Canada, joined Feb 2012, 1019 posts, RR: 4
Reply 45, posted (2 years 4 months 3 weeks 4 days 23 hours ago) and read 3429 times:

Quoting ANM604 (Reply 43):
Here we go again, blaming AC for "killing the aviation support industry". Really? Care to explain how? I hate to break it to you, but ALL airlines are constantly trying to cut costs, and if said service is costing them to much, they are more then entitled to go elsewhere. WS does the exact same thing, except to a larger extent. They know companies like Swissport etc want their business, and they drive them to rock bottom prices. EK will go with whatever company is the cheapest, which means paying their workers minimum wage (which is far less then AC rampee's make). How exactly does that benefit the airline industry?

It creates jobs and income where jobs and income don't exist. I am wrong to say they 'killed' it. AC did what it had to. But that doesn't change the fact that catering one A380 is the equivalent of catering several AC domestic flights out of YYZ. Even if those jobs are minimum wage, they offer more income than many people are earning in the current economic environment. It stands to reason that as the economy improves, so will wages. As for AC rampees, I'm going to dodge that issue because I have seen AC rampees on this board get criticized for making too much money.

Quoting ANM604 (Reply 43):
Read again, they were offered 6 slots, but threw a hissy fit. They have no one to blame but themselves for not scooping up the 6 slots, saying thank you, we'll be back in 3 years with proof we can at least support daily flights to YYZ.

Read again. It wasn't a specific reference to EK, it was a reference to the BC Provincial lead's testimony to the Senate. It was about SQ, QR, TK, even AF.

Quoting ANM604 (Reply 43):
They most certainly would to save money. There are people everyday who will fly CAN-USA-EUR if it means they save $100 on flights.

I don't know if you're joking or not, but there is a difference between adding a couple of hours by tranistting through JFK, EWR, ORD, SFO, LAX, PHL etc, and turning a 7-8hr flight to Europe into an 18hr+ flight by spending 12hrs going to DXB, and then 5-6hrs backtracking to Europe. I don't know how irrational you think Canadians are, or, how irrational they actually are, but I personally don't think anyone would add 10hrs of travel in Y to save any money (unless its a mileage run). Nor do I think the majority of Canadians would do it. If, indeed, Canadians are this irrational then I see your point - I suppose the government has to protect us Canadians from being, you know, Canadian. Its this kind of fearmongering/condescending attitude towards consumers' intelligence that I find peculiarly Canadian.

Quoting ANM604 (Reply 43):

No, in fact we don't have much to gain from the UAE, as has been pointed out. We don't need them.

Probably should tell Minister Baird that. He seems to be under a very different impression. And he was the cheerleader of the anti-EK crowd in Parliament in the first place. Odd. His words are a bit....different to yours.

Quoting ANM604 (Reply 43):
It's not great, but not as horrific as the media likes to portray it. They are sitting on a decent pile of cash, and while they have some upcoming liabilities, they should be fine. They have posted operating profits consistently.

If that's the case, then why is management hell bent on driving the AC brand through muck. If they're doing alright, why are we in the middle of a management-union showdown over costs?

Quoting ANM604 (Reply 43):
Another big threat to AC is the huge taxes/fees it pays to Gov, whether it is from the ACCPA, or increased airport/nav can/fuel taxes.

We can agree on that. I should add, though, that Toronto has decreased its fees for the last 5 consecutive years.

Quoting ANM604 (Reply 43):
They need to dump the inefficient Jazz contract and break it into smaller pieces, or not at all.

Is it inefficient? How so? Furthermore, which airline in Canada has the same capacity as Jazz? I mean, don't get me wrong, I m all for it. I would like to see Jazz as an independent entity competing with AC. Only thing is - who actually has a the fleet ready to fly to all those secondary destinations across Canada and the US?

Quoting StarAC17 (Reply 44):
I have said that I support them getting more access but not unlimited access. which I see as a perfectly acceptable compromise.

Then we can agree on that. I don't think anyone wants unlimited access for them - a daily frequency to YYZ is all I would want them to have. I d throw in YVR. out of sympathy for the BC fellow. Doubt its going to happen though. SEA has probably won out for a little while yet.


User currently offlineyenne09 From Canada, joined Jun 2010, 186 posts, RR: 0
Reply 46, posted (2 years 4 months 3 weeks 3 days 21 hours ago) and read 3032 times:

As an investor, I lost many thousands $ after the bankruptcy of 2003. After that bankrptcy, the ACE holding was created to recover the money lost by the creditors not to create a carrier with a long term viability. At that time 85% of the ACE shareholders were former creditorors who lost theit money in the bankruptcy and the other 15% was holding by the management and the Cerberius fund. According to La Presse newspapers (www.cyperpresse.ca) all the decisions taken in the last 9 yers were to recover the lost money as fast as possible. According to that ACE Holding and Larry Milton took only short term decisions. This is were, in my mind as a former investor, Larry Milton and ACE were protected by the Federal government, not Air Canada itself. It seems that he was there to kill Air Canada and then launch a new carrier on the ashes of Air Canada like Crossair who launched Swiss or DAT with SN Brussels.

All the former divisions were placed under the ACE umbrella (Aeroplan, Jazz and the Technical Services). For the ACE executives, the idea was to recover money as fast as possible. According to that, these subsidiaries were put on sale because their value was higher separetaly than as a whole. According to that, between 2004 and 2011, ACE has obtained 4,5 billions which is outside Air Canada itself. Air Canada has lost the stability given by the Aeroplan program.

ACE has tried everything to denigrate Air Canada employees (I am an Industrial Relations consultant) even if in the last ten years they made large sacrfices regarding their working conditions. They launched ZIP and Tango and they want to do it again. The labour costs at Air Canada average 4% of the total costs. So the real problem is not there. While the emplyees agreed to make sacrifices, Larry Milton,CEO of ACE, has received 80 millions for his years at that position. Even Calin Rovenescu, the CEO of Air Canada will received 5 millions $ after being in place for 3 years. Since the closure of Aveos, Air Canada has sent airplanes around the world for maintenance purpose. Is it really a cost efective measure? Even, as a traveller in economy class, I have to pay my sandwich on board and the fare on Air Canada are on par with those of Westjet.

So now without any assets, with employees morale very low, with the Technical Services not respecting the law about the presence of a base in Mississauga, Montreal and Winnipeg and with the federal governement preventing Air Canada serving som parts of the world what's left for Air Canada. As a former investor, it's time for a major cleaning and replace Mrs Milton and Rovinuscu since they have made their job to recover money lost in the 2003 bankruptcy, even if a received no pennies from them. The only solution after this mess is probably to create a new Air Canada but I really don't know on which basis.


User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
Reply 47, posted (2 years 4 months 3 weeks 3 days 20 hours ago) and read 2973 times:

It's Robert Milton, actually. Not Larry (or Curly or Moe). But I agree that ACE has stripped AC of financial resources and capabilities that leave it extremely exposed. Nothing to do with running an airline, only about lining people's pockets. One thing about investing is you have to assume risk: if you're not prepared to take on the risk, don't invest. Seems like the people behind ACE wanted to invest but didn't want to take on any risk, therefore they set up a structure in order to effectively loot AC.


Nostalgia isn't what it used to be.
User currently offlineyenne09 From Canada, joined Jun 2010, 186 posts, RR: 0
Reply 48, posted (2 years 4 months 3 weeks 3 days 20 hours ago) and read 2954 times:

Quoting connies4ever (Reply 47):
It's Robert Milton, actually. Not Larry (or Curly or Moe). But I agree that ACE has stripped AC of financial resources and capabilities that leave it extremely exposed. Nothing to do with running an airline, only about lining people's pockets. One thing about investing is you have to assume risk

You are right it is Robert Milton. I assume the risk and I survived to it. The problem is not me, but the people who were left behind, losing the economy of a lifetime (including employees).


User currently offlinejuantrippe82 From Bahamas, joined Sep 2011, 26 posts, RR: 0
Reply 49, posted (2 years 4 months 3 weeks 3 days 9 hours ago) and read 2700 times:

Quoting ANM604 (Reply 43):
They most certainly would to save money. There are people everyday who will fly CAN-USA-EUR if it means they save $100 on flights.

I seriously do not see people traveling an extra seven hours to save $100, you're comparing apples to oranges. The USA is next door while Dubai is ten hours away. Anybody who did that would need their head examined.



Don't worry, I'm never wrong.
User currently offlineblueflyer From United States of America, joined Jan 2006, 4001 posts, RR: 2
Reply 50, posted (2 years 4 months 3 weeks 3 days 4 hours ago) and read 2558 times:
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Quoting ANM604 (Reply 43):
They most certainly would to save money.

Would they even let you buy a ticket? A colleague tried on QR, because he is single, had nothing better to do that week-end and thought it might be fun, but be it online, on the phone or through our CTM, he couldn't buy a connecting ticket from the US to Europe via DOH. His only option was two tickets.

Quoting yyz717 (Reply 29):
Yes, Canada (and Canadians) DO win HUGELY when we can purchase goods & services cheaper from abroad. Trade enriches a nation; trade sanctions impoverish it. If I can save $500 flying EK to India (vs AC/LH), then I can spend the extra saved $500 on other goods and services here at home, something I can't do when I have to pay AC $500 more.

On a specific level, Air Canada is far too important a part of the Canadian economy overall to assume without study that this generic, and not absolute, principle will be found to be true if Air Canada were to disappear and be replaced by foreign carriers. To put it simply, how many times must you save $500 per ticket to make up for an experienced pilot no longer contributing his tax income and instead collecting employment benefits? And that is assuming that saving is even spent, because as the next reply points out, it might be better used to pay off debts...

On a generic level, it isn't always true and it depends largely on the individual situation of countries to which it is applied and the timeframe one looks at. For every Eastern European country that was able to enrich itself from trade shortly after the collapse of the Soviet Union, there's another that followed every diktat spoon-fed by the US government and the World Bank, let hundreds of local factories collapse and destroy thousands upon thousands of jobs rather than help them retool and retrain, and found itself with an entire generation of job-less citizens and a few, lowly paid, distribution and sales jobs as consolation prize.

Quoting ElPistolero (Reply 34):
Suffice it to say that all of this seems all the more absurd given that the Bank Of Canada's Governor Carney is railing everyday about household debt levels. Disposable income helps pay off debt just that little bit faster. Overpaying for goods...generally not a good idea.

Bit of a sideshow, but if household debt is that much an issue, the discussion shouldn't be over saving $500 of disposable income by flying EK instead of AC, it should be why they're flying in the first place?!?

Quoting StarAC17 (Reply 35):
In the long term the presence of EK will decrease competition as the Euro carriers will reduce and eliminate services

I am not convinced that it will make a meaningful difference, but we can look at DFW again as a possible future.
Emirates has just started a daily flight that many predict will kill KLM's own service because KLM is the newest entrant before Emirates and it is said a large portion of its traffic is transiting through AMS to the Middle East and South Asia. If KLM can stand up to Emirates without local feed at one end, I'm sure Air Canada will do just fine when many of its TATL flights have local feed at both ends.

Quoting StarAC17 (Reply 35):
IIRC EY is losing money also, not sure about QR.

Another deviation, but I do believe the Qatari government sees Qatar Airways as a tool in their campaign to increase tourism and business to the country. As long as QR's net contribution to the local economy (more tourists, more business, more tax revenue) outweighs any financial loss it may suffer, they'll be happy.

Quoting ElPistolero (Reply 41):
I recently read an article about AI having an extremely unhealthy employee to aircraft ratio. Interestng statistic, I thought.

Air Canada is in the pack with about 115 employees per aircraft. Delta has 112, United 122 and US Airways 96. Air India has over 250 employees per aircraft.



I've got $h*t to do
User currently offlineStarAC17 From Canada, joined Aug 2003, 3376 posts, RR: 9
Reply 51, posted (2 years 4 months 3 weeks 2 days 21 hours ago) and read 2419 times:

Quoting blueflyer (Reply 50):
On a specific level, Air Canada is far too important a part of the Canadian economy overall to assume without study that this generic, and not absolute, principle will be found to be true if Air Canada were to disappear and be replaced by foreign carriers.

Which is why it ever became insolvent it's assets would be acquired by another airline (UA/CO or LH would be likely) to pick up the pieces and start a new airline. I don't think WS has the cash or the will to take up all of AC's assets should it go bust.

Quoting blueflyer (Reply 50):
Emirates has just started a daily flight that many predict will kill KLM's own service because KLM is the newest entrant before Emirates and it is said a large portion of its traffic is transiting through AMS to the Middle East and South Asia. If KLM can stand up to Emirates without local feed at one end, I'm sure Air Canada will do just fine when many of its TATL flights have local feed at both ends.

AC would be fine I reckon and they aren't the ones blocking them although they might be acting on behalf of their *A partner LH. How the Canadian government works regarding bi-laterals (whether you agree or not) is that they give limited rights to a carrier and over time it gets expanded if demand warrants, and it is preferred to be O&D. EK was offerered another slot and YYZ and two other cities (presumably YYC and YVR) but the rejected it IIRC,

With EK's presence in the long term the risk is that if they were to send say 2 A380's into YYZ is that BA may go to 1x daily, KL reduces, LH reduces or pulls out, AI pulls out etc. All the airlines I mention might sill make money serving Canada but they may be able to make more serving elsewhere and will leave. I'm speculating all of this, but I think this is the though process at work.

The end result is less choice for the customers and if EK gets more of a market share with less competition then they will raise fares.

YYZ is a safer market than YVR or YYC



Engineers Rule The World!!!!!
User currently offlineElPistolero From Canada, joined Feb 2012, 1019 posts, RR: 4
Reply 52, posted (2 years 4 months 3 weeks 2 days 20 hours ago) and read 2402 times:

Quoting blueflyer (Reply 50):
, but if household debt is that much an issue, the discussion shouldn't be over saving $500 of disposable income by flying EK instead of AC, it should be why they're flying in the first place?!?
Quoting StarAC17 (Reply 51):
AC would be fine I reckon and they aren't the ones blocking them although they might be acting on behalf of their *A partner LH.

I've been reading through the Senate hearings. Virtually every bureaucrat and academic invited, not to mention consumer advocacy groups have suggested that AC was involved. One senator even went so far as to explicitly criticize Duncan Dee on that count at the AC hearing. An academic from UBC was pointedly asked the question so that his response could be recorded in the Hansard records.

One only has to listen to Rovinescu to realize that at least part of it is coming from AC. Either that, or AC is being run from FRA, which raises many questions about the revenue sharing and foreign ownership. At what point does it stop being competition and start becoming collusion?

Quoting StarAC17 (Reply 51):
With EK's presence in the long term the risk is that if they were to send say 2 A380's into YYZ is that BA may go to 1x daily, KL reduces, LH reduces or pulls out, AI pulls out etc.

A large part of that depends on the market they stimulate. EK has created new markets in secondary Indian cities. Theres no reason to believe that they can't stimulate new markets here by playing the price card. As for LH, KL etc, I have no sympathy. They're playing the same game of transit pax. Why should we be concerned about them if they can't compete? Because they pay higher taxes? Well, what happens to the Canadian taxes going into their pockets? What do we get in return for all the environmental taxes and other cash-grabs? Nobody is stopping them from competing. KL hurt itself by destroying its FF plan years ago. LH, on the other hand, refuses to invest in its product in a meaningful way. It was years behind everyone else on the PTVs in Y game. And its Y product is still very mediocre.

As for BA, they dropped BA 44/45 to YUL long before EK, EY etc entered Canada in a meaningful way. Why should we try to concern ourselves with keeping them here? If there is a market for LHR-Canada (which there undoubtedly is), they will continue. Note BA etc haven't dropped off much frequency to other cities served by EK. They continue to compete with them.Why do they need protection in Canada? The only airline that has gotten mauled by EK is LH in India and possibly Thailand, but even there, those were always traditionally low-yield, so its not clear how much of it was EK and how much of it was just the markets price sensitivity.

Quoting StarAC17 (Reply 51):
The end result is less choice for the customers and if EK gets more of a market share with less competition then they will raise fares.

I sense a contradiction again. Low fares= low yield -> drives out carriers. Fair enough. But when the fare goes up (through EK), so will yield, attracting the actors that left the market back into the market. In other words, if EK succeeds in driving out everyone on prices, it has little leeway to raise fares, because the moment it does, other airlines will come right back because the route becomes viable for them again. That, incidentally, is the beauty of market forces.

Ultimately, the consumer needs to be considered too. If EK sells Can - India for $1300, and drives out BA, which is comfortable at $1500, then EK can only really raise the price back up towards, but not upto, $1500, before BA gets back in. No? At the end of the day, the consumer wins, because at $1500, he can choose on the basis of product. Below that, he's still paying less than he would be if we continued protecting BA.


User currently offlineyyz717 From Canada, joined Sep 2001, 16259 posts, RR: 56
Reply 53, posted (2 years 4 months 3 weeks 2 days 9 hours ago) and read 2171 times:

Quoting blueflyer (Reply 50):
On a specific level, Air Canada is far too important a part of the Canadian economy overall to assume without study that this generic, and not absolute, principle will be found to be true if Air Canada were to disappear and be replaced by foreign carriers.

Where foreign carriers can replicate the int'l route authority and capacity of AC, AC is effectively irrelevant over time, given that it's capacity can be replaced.

For domestic routes, WS has a plan to reach 50% of domestic market share in a few years, so with each passing year, as AC market share drops 1-2%, AC becomes less relevant domestically also.

It's not that AC is "is far too important a part of the Canadian economy...". Think of it along the lines of the routes and capacity currenty flown by AC are important.....most of these can easily pass to another carrier over time.

Also, with AC's poor financials, they are paying far less corporate tax than a similar sized, well run Canadian company.

So I would suggest that AC is actually DETRIMENTAL to the Cdn economy (ie, not important) with its inability to be profitable, its labour actions, its focus by government (who should be focused on other economic areas), its dumping of capacity depressing yields of other airlines.

The only bad thing about AC's "slow descent" is that it's not a "quick descent", so the industry can re-align itself quicker.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
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