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yyz717
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Air Canada Can't Get A Line Of Credit

Sun Dec 12, 2004 3:56 pm

The following article is interesting. It highlights AC's inability to secure a line of credit.

http://www.theglobeandmail.com/servlet/story/RTGAM.20041209.wdomi1209/BNStory/Business/

The article points out the unanimous opinion of bankers that AC profit potential is very dim. The article also points out that AC's unit costs remain 20-25% higher than Westjet, which further suggests the current slimmer AC cost base is still too high (of course we all knew that already).

While the creditors had no choice but to negotiate with AC as per the bankruptcy court to convert AC debt/liabilities into ownership for post CCAA, clearly AC will have alot of difficulty raising further equity or credit lines from new sources.

There is a unanimous lack of confidence in syndicated banks worldwide in AC as a going concern. Hence, while AC has about $2B in cash, if/when this dwindles down, AC will once again face CCAA and possible liquidation.

Clearly, AC employees will need their wages reduced a further 20-25%. Even this may not save AC if it cannot generate profits and positive cash flow. Just one or the other is insufficient.

I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
ac7e7
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RE: Air Canada Can't Get A Line Of Credit

Sun Dec 12, 2004 4:14 pm

Clearly, AC employees will need their wages reduced a further 20-25%. Even this may not save AC if it cannot generate profits and positive cash flow. Just one or the other is insufficient.

Though I agree with you that AC's costs are still much too high, wage reductions of a further 20-25% may not be neccessary, as cost reductions can be achieved by other means, not to mention the employees would outright refuse another rollback.

AC will never lower their costs to that of Westjet's. They are a full-service carrier servicing some of the most expensive airports in the world, including YYZ. As AC's main hub, higher airport landing fees will affect AC more than WS. The new regional jets on order may reduce the number of flights into YYZ in the next few years.

Let's see how they do in their first year after exiting CCAA.
 
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yyz717
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RE: Air Canada Can't Get A Line Of Credit

Sun Dec 12, 2004 4:18 pm

wage reductions of a further 20-25% may not be neccessary, as cost reductions can be achieved by other means, not to mention the employees would outright refuse another rollback.

Labour is the biggest component of AC's costs. Cost reductions cannot be achieved without further substantial wage reductions.

AC will never lower their costs to that of Westjet's. They are a full-service carrier servicing some of the most expensive airports in the world, including YYZ.

The line between full service carriers and LCC's is blurring. What matters is profit. The new owners of AC will only care about profit.

Let's see how they do in their first year after exiting CCAA.

Ya. I agree. Although, like the bankers, I am skeptical.  Smile





I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
ac7e7
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RE: Air Canada Can't Get A Line Of Credit

Sun Dec 12, 2004 4:29 pm

Labour is the biggest component of AC's costs. Cost reductions cannot be achieved without further substantial wage reductions.

I agree 100%, however squeezing wages will not be possible.

The line between full service carriers and LCC's is blurring. What matters is profit.

True the lines are blurring however AC's main hub is YYZ while Westjet doesn't fly nearly as much nor pays nearly the amount of fees AC does.

The new owners of AC will only care about profit

Again, I agree 100%, and finally AC has a BoD that will hold the executives accountable. This was always a problem at the airline. The 10% (later 15%) ownership limit imposed by the government did not encourage any serious investors who would have like to take control of the airline, however Ceberus' 9.2% stake is very influential, so hopefully things will improve.
 
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yyz717
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RE: Air Canada Can't Get A Line Of Credit

Sun Dec 12, 2004 4:36 pm

I agree 100%, however squeezing wages will not be possible.

It's unavoidable. Labour will HAVE to be a big part of the further cost cutting which is coming.

finally AC has a BoD that will hold the executives accountable.

Accountability means sustainable profits. No excuses.


I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
ac7e7
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RE: Air Canada Can't Get A Line Of Credit

Sun Dec 12, 2004 4:46 pm

Accountability means sustainable profits. No excuses.

I agree. Let's see what happens in 2005.

It's unavoidable. Labour will HAVE to be a big part of the further cost cutting which is coming.

Again, I agree, even Milton would agree with you, however militant unions will not.
 
AirbusCanada
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RE: Air Canada Can't Get A Line Of Credit

Sun Dec 12, 2004 5:50 pm

AC maintains Business and first class services most of its flights and serves meals.
AC also has Maple leaf lounges in airports around the globe, not to mention the Aeroplan program.

So comparing AC's cost structure with WJ is like comparing apples and oranges.

Maybe AC Jazz and west Jet would be a bit more practical.

The bottom line is, AC cost stricture will be always higher than WJ, but it will be offset by higher revenue earned by high yield.
 
captaingomes
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 12:52 am

AirbusCanada is correct. Air Canada will always have higher costs than Westjet. It is like comparing a BMW to a Ford. The BMW may cost more to produce, but it is also made from more expensive components, and will command a significant price premium for their product.

While it may be argued that traveling has become a commodity business, that may be true to an extent. Eventhough Air Canada price matches against Westjet and Jetsgo quite often, they still sell a large number of seats at much higher prices, including J Class seats. This is supposed to more than offset the greater cost structure, and I'm sure if it is managed properly, it can be achieved.

Also, until Westjet enters into agreements with long-haul airlines and allows its "guests" to travel abroad from its Canadian hubs on a seamless travel itinerary, it will not be able to take away those passengers away from Air Canada.

Finally, Air Canada has far more senior staff, which is just a natural progression in any business. Westjet is a younger company, and of course its staff will be much more junior, and hence make less money. If you compare their respective pay scales, quite often there are not many differences from one to the other. The only way to avoid this is to fire people from the top and hire more junior employees, which is obviously a ridiculous measure.
"it's kind of like an Airbus, it's an engineering marvel, but there's no sense of passion" -- J. Clarkson re: Coxster
 
slawko
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 12:56 am

If they can't get further wage concessions they will just have to cut the workforce...I think the company is still heavy on management, and the entire workforce needs to be restructured to fall further in line with reality.

They do still have the option of splitting off some of the more viable components like ACTS, Jazz, and the ground handling component. This would reduce their labour force, and bring in some revenue at the same time...

I agree with the above though, lets see how the next year goes for them before calling for another round of CCAA....
"Clive Beddoe says he favours competition, but his actions do not support that idea." Robert Milton - CEO Air Canada
 
lnglive1011yyz
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 1:14 am

Does this really surprise anyone?

Have you ever tried to get credit after declaring bankrupcy? It's next to near impossible. (and no, I haven't HAHA, just i have family members in the banking industry).

YES, I do realize we're talking apples and oranges here between a large business and personal finance, however, from the banks perspective, not much has changed YET at AC. They need to see some consistent profits before they'll even entertain the idea.

Good move by the banks.

1011yyz.
Pack your bags, we're going on a sympathy trip!
 
sebring
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 1:49 am

All this post proves is that any ignoramous can post any ignorant thought on a bulletin board and dress it up as fact. Air Canada's labor costs are above Westjet's but so are Air Canada yields - dramatically so. It's there in black and white and I have pointed this to certain Air Canada "haters" who steadfastly choose to ignore this in order to prattle on about domestic costs. Moreover, Air Canada costs are now significantly below most of its international competitors' costs and international makes up two-thirds of AC's flying. Again, that's a fact that certain "haters" refuse to acknowledge. Thirdly, all the AC labor agreements confer deferred benefits - B scales, outsourcing flexibility, special low scales for the new regional jets, etc. The net outcome of this is that as AC turns over its work force, either through attrition or by buying out employees as it is doing now (1,500 more people have accepted packages), the replacement labor - if those people are even replaced - will be B scale labor. And if AC expands, which it is, all additional labor will be B-scale or special scale labor. The more AC expands, the more cheaper labor it will bring into the carrier.

That the banks won't give AC a line of credit yet is tied to the fact that AC's assets are pledged to the relatively small GECAS line, and as AC either pays down that line or finds alternative financing, its assets will become available to pledge for credit. It's not an insignificant issue, but it far from foreshadows a catastrophe. Interesting too that US investor interest in AC is particularly high and that AC stock hit $33 this week, a $13 premium over the $20 issue price.

 
ac7e7
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 2:12 am

We will only be able to compare the two airlines completely once Westjet starts flying international. You guys are correct.

With AC avoiding YYZ in the future thanks to more direct flying between cities when the new RJs come in, plus more focus on international routes, AC's yields will only get better.

The banks probably want to see how the airline is going to do over the next six months, the traditionally low season for airlines. If the airline posts a profit, or much lower losses year over year, the banks will give them a line of credit.
 
EuroLeb
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 2:24 am

...and what's the big deal here? It's nothing new as far as I'm concerned. Creditors are usually very cautious, especially when considering large sums of money to an emerging banckrupt airline. Nevetheless, I have no doubt that Air Canada will become profitable as it's emerging as a much leaner air carrier than the one we've known. A successful Air Canada would benefit tavellers both domestically and internationally. Without Air Canada, we would have only low cost carriers in Canada with limited service and much higher air fares than we see today. I'm not sure, though, if I'd still call WestJet a low cost carrier as its fares are equal if not higher (in some cases) than those of a full-service airline like Air Canada. Remember guys, competition is what drives prices down and pushes service standards up!.


Calgary is my home...
 
nwacrew
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 2:53 am

At 5 p.m. on Friday I flew from Toronto to San Francisco aboard Air Canada flight 755.

The A-320 was staffed with four flight attendants (we staff our's with three at Northwest).

A hot meal was served in Economy (we serve a sandwich in back on our comparable-length Detroit-San Francisco flight).

Video programs were offered as well (Northwest discontinued videos within North America because of the expense of maintaining the onboard systems).

The cabin crew even had English and French language newspapers to distribute to passengers (something I don't believe Northwest has ever offered on our transborder flights).

As a customer I appreciated the onboard service and amenities offered by Air Canada, but in light of their dire financial situation, I wonder how much longer those inflight standards can (or should be) maintained...
 
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yyz717
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 4:57 am

AirbusCanada is correct. Air Canada will always have higher costs than Westjet. It is like comparing a BMW to a Ford.

This is an extreme exaggeration. The overwhelming majoroty of AC passengers and ASM are in economy, offering the same class of service as WJ. AC and WJ are completely comparable from an operating cost standpoint.

Finally, Air Canada has far more senior staff, which is just a natural progression in any business.

So? A well run company with appropriate compensation scales will max out employees at the top range after a few years. There is no reason why 20year employees should make more than 2year employees.

The only way to avoid this is to fire people from the top and hire more junior employees, which is obviously a ridiculous measure.

Ridiculous? This happens all the time Nuno. Im many industries, senior staff are often packaged out to make way for cheaper staff. It's very common.

All this post proves is that any ignoramous can post any ignorant thought on a bulletin board and dress it up as fact.

All your response shows is that any ignoramous can continue to make apologies for a failed airline. Stick to the facts in the article buddy.  Insane

Air Canada costs are now significantly below most of its international competitors' costs and international makes up two-thirds of AC's flying.

Actually most of AC's network is domestic/transborder where LCC"s are a growing competitive force. Which means futrther wage cuts are required.

That the banks won't give AC a line of credit yet is tied to the fact that AC's assets are pledged to the relatively small GECAS line

READ THE ARTICLE! The lack of a line of credit is because of the UNAMIMOUS OPINION THAT AC WILL NOT MAKE A PROFIT. You're completely incorrect.

As a customer I appreciated the onboard service and amenities offered by Air Canada, but in light of their dire financial situation, I wonder how much longer those inflight standards can (or should be) maintained...

Excellent point nwacrew. Clearly, AC can cut costs a lot further.










I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
captaingomes
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 5:48 am

Excellent point nwacrew. Clearly, AC can cut costs a lot further.


So they can cut the extra frills (which cost a minimal amount), cut business class, lounges, etc, and then they could finally be compared to Westjet!

Ridiculous? This happens all the time Nuno. Im many industries, senior staff are often packaged out to make way for cheaper staff. It's very common.


No, older employees are not fired, they are given packages, as is being done at AC, but only a small percentage of these people take them. This still leaves the airline with a much larger proportion of higher paid senior staff compared to the much younger Westjet. Oh, and I've never seen pay scales that max out in two years.  Smile
"it's kind of like an Airbus, it's an engineering marvel, but there's no sense of passion" -- J. Clarkson re: Coxster
 
ac7e7
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 5:52 am

As a customer I appreciated the onboard service and amenities offered by Air Canada, but in light of their dire financial situation, I wonder how much longer those inflight standards can (or should be) maintained...

Why not? Westjet is installing LiveTV in their planes, AC must provide IFE to compete with Westjet. They should expand buy on board meals on all North American flights.
 
lymanm
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 6:06 am

With regards to service:

I don't think the race to the bottom as seen by US carriers is the answer.
buhh bye
 
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yyz717
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 6:25 am

Oh, and I've never seen pay scales that max out in two years.

Then I guess you dont have much experience in the non-union private sector.

So they can cut the extra frills (which cost a minimal amount), cut business class, lounges, etc, and then they could finally be compared to Westjet!

No, they can already be compared to WJ. This is just about being more efficient as a so-called full service carrier. When NW can fly the 320 (which has more seats than the AC 320) with 3 FA's vs AC's 4 FA's, it's a prime example of just how overstaffed AC is.

No, older employees are not fired, they are given packages, as is being done at AC, but only a small percentage of these people take them.

I said packaged out, not fired. And you can force them to take them.

Westjet. They should expand buy on board meals on all North American flights.

I agree. Then their service produect will be superior to AC's.





I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
CPDC10-30
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 6:29 am

The A-320 was staffed with four flight attendants (we staff our's with three at Northwest).

This isn't because AC is providing extra staff to serve customers better, just a legal requirement in Canada (1:40 ratio).
 
Whiteguy
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 6:39 am

If NW was based in Canada they would have to staff at least 4 FAs on their aircraft. If there are only 3 FAs on an AC A320 then the passenger load is restricted to 120 pax. Its a prime example of a Transport Canada rule not AC being over staffed!
 
ba97
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 6:44 am

Great arm chair quarterbacking all. The future of AC is a crystal ball everyone is looking into. Who knows what their market will be like 12 months from now, world air travel or other influences from fuel costs to competition.

Banks offer money if a) they will get their money and acceptable interest back. - i.e. secure investment; b) the expectation of failure is there and they are first in line to get the prime pickings which can rolled for an acceptable profit.

The first thing AC has to do is get customers. No customers-no income-no company. Once the seats are being filled, then someone has to decide what to do with the money. The amount of money depends on the costs or discounts to fill the seats. If cost is greater than number of seats filled- game over. I am glad they are getting people in the seats (I have a love/hate relationship with them, my J class long haul posterior is planted elsewhere until they improve items-NA flights, they get my $ and butt). Step one seems to be going ok-people in the seats. Let us see how they navigate through the complexities of the other steps.

Strap yourselves in on this ride and keep your hands inside this vehicle at all times.
there is economy class, business class, first class...then Concorde..pure class
 
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yyz717
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 6:46 am

The why isnt AC lobbying Transport Canada to relax the rules?

Instead of visiting the Transport Minister in Ottawa to discuss this issue, Milton is flying around Canada with Celine Dion on PR photo opptys. Where are the mgmt priorities?





I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
captaingomes
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 6:54 am

Actually the airlines are lobbying for TC to change the rules. In the US and Europe (not sure about elsewhere), the rule is 1 f/a per 50 seats, whether they are occupied or not. In Canada it is 1 f/a per 40 passengers, plus a couple of other requirements. There are pros and cons to both rules in reality. On a light load, AC can get away with staffing the A320 with 2 f/as, such as 80 passengers or less, whereas Northwest can't do that since they still need the 3 f/as as per the 1:50 seat rule.
"it's kind of like an Airbus, it's an engineering marvel, but there's no sense of passion" -- J. Clarkson re: Coxster
 
Whiteguy
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 7:03 am

Actually there are minimum numbers of FAs reqiured on certain aircraft. For example on the A320 the min is 3 FAs. I don't know if those are ACs numbers or Transport or the manufacturers.
 
ac7e7
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 7:20 am

The why isnt AC lobbying Transport Canada to relax the rules?

Instead of visiting the Transport Minister in Ottawa to discuss this issue, Milton is flying around Canada with Celine Dion on PR photo opptys. Where are the mgmt priorities?


Let's see what happened last time AC went to Ottawa to have rules relaxed....MPs began complaining about other aspects of Air Canada and dealing with the issue of the Official Languages Act. Ottawa is a useless avenue. The politicians are as useless as a pimple on my a$$.

Milton is trying to put a new face on AC. It is not as though he is touring the country 7 days a week. Give me a break, no matter what he does, you criticize. Had he not been doing photo ops and meeting with customers and the media, you would be criticizing that!

Then their service produect will be superior to AC's.

I meant AC. If they expand the buy on board meals, it would reduce costs even more. Besides, I kinda like the meals they offer.

 
accargo
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 7:35 am

Good to see that the resident anti-AC expert didn't know about the Transport Canada requirement that mandates 1 FA for every 40pax. Lends more credence to notion that he doesn't know as much as he thinks he does.

A truer picture of AC's long term prospects will be apparent by the end of 2005/ beginning of 2006. There are still cost saving that have not come to pass, there are still changes being made to streamline operations and maximize yield. There are still new acft to be delivered that will lower the operations costs yet again. It's no surprise that a Line of Credit isn't available at this time, but not overly worrisome given the positions of Cerebus and DB. If by early 2006 there is still no line of credit then there would be cause for concern.

Right now, costs are decreasing, yields are increasing, loads are the highest they have ever been, on time performance is great, and senior employee's are taking packages while more lower paid part time employees are starting. Everything is moving in the right direction.

The comparison of a full service airline which operates domestically, transborder and internationally to a LCC which operates domestically and to a select few transborder routes(still waiting to hear which new highly profitable T/B routes it will be starting up) is not a true comparison, no matter how much someone protests that it is.

That same LCC is itself having struggles as it must compete with other LCC's which undercut it's prices further depressing yields. This domestic lowering of yields is offset to a degree for AC by it's ability to offer a business class product across North America and by it's intl operations which produce higher yields themselves. WJ has no business class nor intl operations to offest lower domestic yields. If it wants higher yields it must lower costs or raise prices, if it raises prices it risks losing pax to other LCC's. Where can it lower costs other than through employee wages? It would be interesting to see what the reaction would be if that route is chosen. Although WJ'ers are very loyal to a company that has done well for them, it would be a possible cause for concern.

This argument keeps coming back as those that wish to see AC fail look for any info that may bolster their position. There's always a counter argument that is put forth and promptly dismissed by the anti-AC crowd. One way to silence these critics is for AC to become the successful airline it will become. That will happen over the next few years.
 
ac7e7
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Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 7:45 am

A truer picture of AC's long term prospects will be apparent by the end of 2005/ beginning of 2006.

Exactly. We should wait until fiscal 2005 is over to determine whether the restructuring was successful. I remember Continental Airlines when it emerged again from bankruptcy protection in the 1990s. Now look at that airline. Yes it is having its troubles today, but nowhere near the troubles Delta and United are today. AC will come out okay.
 
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yyz717
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 7:52 am

Good to see that the resident anti-AC expert didn't know about the Transport Canada requirement that mandates 1 FA for every 40pax. Lends more credence to notion that he doesn't know as much as he thinks he does.


All any of us really know is that Milton has been unsuccessful relaxing the rule to 1:50 which has already happened for the CRJ/Dash 8-300. So now he spends several days with Celine Dion, and writing a book. Priorities proirities.

A truer picture of AC's long term prospects will be apparent by the end of 2005/ beginning of 2006.

I agree, but a group of banks have already analyzed the situation and determined that AC's future is grim. You of course know differently right? Where did you get your MBA from?  Insane I'll side with the banks.

There are still new acft to be delivered that will lower the operations costs yet again.

It willl take years for these new aircraft to be delivered and have a measureable impact.

The comparison of a full service airline which operates domestically, transborder and internationally to a LCC which operates domestically and to a select few transborder routes(still waiting to hear which new highly profitable T/B routes it will be starting up) is not a true comparison,

In a commodity business, it is indeed a true comparison. You just dont like the unflattering AC numbers.

This argument keeps coming back as those that wish to see AC fail look for any info that may bolster their position.

No, its the other way around. The argument keeps coming back to AC apologists & other dinosaurs who refuse to acknowledge the bankruptcy, near liquidation, militant unions, overpaid staff, poor productivity, incompetent mgmt, poor strategy, shafted shareholders and creditors, to bolster their position. Probably simply to hang onto the best job they have ever had.


[Edited 2004-12-12 23:54:30]
I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
ac7e7
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 8:07 am

Refuse to acknowledge the bankruptcy? What does that mean? I believe ALL AC employees have acknowleged the last 18 months. As I mentioned before, their bankruptcy-protection filing was the best thing to happen for the airline. They would not have been able to achieve as many cost reductions if they hadn't.

As for poor strategy, what should they do then, and what should they have done rather than file for bankruptcy protection? Forget Milton, the unions would still continue to be as militant as they were 10 years ago.

You tend to complain about AC, but you never come up with solutions. We know what AC needs fixing, but how would you go about doing this? Unfortunately, you would not be able to go to AC headquarters and arbitrarily lower the wages yet again.
 
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yyz717
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 8:42 am

You tend to complain about AC, but you never come up with solutions. We know what AC needs fixing, but how would you go about doing this?

1. Package out all unionized staff with over 10 years experience.
2. Demand wage reductions & productivity increases to the LCC levels.
3. Lobby the fed govt for the FA:passenger ratio.
4. Fire Milton.
5. Lobby the fed govt to drop the bilingual reqt.
6. Reduce mgmt ranks drastically.
7. Merge AC & AC Jazz operations, unions.
8. Lobby the fed govt to relocate the HQ to recruit top mgmt talent.
9. Cancel either the CRJ or the ERJ order. They are contradictory.
10. Transfer all CRJ/ERJ ops to Jazz.
11. Sell the small 2-fleet 345.
12. Institute a fuill burdened per route profitability model, and drop the routes that lose money.
13. Require staff training for all fron line employees to improve attitudes to customers.
14. Fire unionized staff that cause customer complaints.
15. Abandon the market share strategy and shrink to a profitable core.
16. Keep Milton (while employed) on the ground in YUL running the business and focused on cost cutting and revenue generation. NO PR stunts with Celine. NO photo ops with other Star Alliance CEO's.
17. Drop the pension plans. AC is an airline, not a mutual fund.

I realize some of these are "prevented" by union agreements. So Milton should aggressively push to implement them.

There are many, many, many more.
I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
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yyz717
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 8:51 am

I might add, instead of Milton working on the above 17 points (and many others), he is spending his time flitting around Canada with Celine Dion and writing a book.

No CEO trying to turn around a bankrupt company should have the time to write a damn book.

Point #4 above should be priority #1 above for the BOD and unions.
I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
ac7e7
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 9:00 am

There is the list I've been waiting for! Thank you  Big grin

1. Package out all unionized staff with over 10 years experience. ---- Militant unions could drag that one to court for years to come.

2. Demand wage reductions & productivity increases to the LCC levels. --- Difficult, but needed.

3. Lobby the fed govt for the FA:passenger ratio. ---- Won't happen. Liberals still think AC is a crown corp.

4. Fire Milton. --- Let's see how the first year out of bankruptcy goes
.
5. Lobby the fed govt to drop the bilingual reqt. --- Read (3)

6. Reduce mgmt ranks drastically. --- Can be done easily, but must be done in such a fashion that other management staff is not overburdened by work. Despite poor productivity thanks to union work rules, management is streched pretty thin right now.

7. Merge AC & AC Jazz operations, unions. ---- I disagree. Keep Jazz apart so it may be sold at a later date. Merging the unions will only make them stronger.

8. Lobby the fed govt to relocate the HQ to recruit top mgmt talent. --- Read (3).

9. Cancel either the CRJ or the ERJ order. They are contradictory. --- I assume this is concerning the ERJ-175/CRJ-705 order. They will be used on different routes. They are separate airlines with separate mx.

10. Transfer all CRJ/ERJ ops to Jazz. --- Union work rules prevent tranfer of 90-seat ERJs to Jazz.

11. Sell the small 2-fleet 345. ---- I say increase the fleet size.

12. Institute a fuill burdened per route profitability model, and drop the routes that lose money. --- Agreed.

13. Require staff training for all fron line employees to improve attitudes to customers. --- Agreed.

14. Fire unionized staff that cause customer complaints. Very Agreed  Big grin

15. Abandon the market share strategy and shrink to a profitable core. --- That seems to be the point of the strategy. They believe that the new smaller jets will allow AC to make money on smaller, thinner routes.

16. Keep Milton (while employed) on the ground in YUL running the business and focused on cost cutting and revenue generation. NO PR stunts with Celine. NO photo ops with other Star Alliance CEO's. ---- The CEO must attend Star meetings as well as PR stunts. AC is am internationally recognized company. It is not your mom and pop store.

17. Drop the pension plans. AC is an airline, not a mutual fund. --- I'll agree with you on that one. Management has switched over to the new plans (I believe), and so should union staff. People should be responsible for taking care of their own retirement.
 
FLYACYYZ
Posts: 1820
Joined: Fri Jan 23, 2004 12:13 am

RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 1:13 pm

The minimum number of flight attendants on AC (and other CDN carriers) is determined by a combination of the number of bodies required for door arming procedures on a particular aircraft type in addition to the 1:40 ratio. The CRJ & DH8-300 are exempted by the 1:50 ratio.

If NW is staffing the A320 with 3 flight attendants, they are the exception to the rule, and can do so by providing a bare bones level of in-flight service. I know of no other operator anywhere who staffs a 320 with 3. Sure..go ahead and put 3 F/A's on on AC A320 with 20J/120Y customers, and put valued customer YYZ717 in row 28 having to wait 3 hours for the completion of a bar and meal service. You wanna see wrath??

Signed,
Just another militant, intransigent, dinosaur

Above and Beyond
 
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yyz717
Posts: 15689
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RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 2:19 pm

If NW is staffing the A320 with 3 flight attendants, they are the exception to the rule, and can do so by providing a bare bones level of in-flight service.

No. 3 FA's can still provide a full service by simply working harder. I see no reason why 3 FA's can't do the work of 4. In the private sector, many professionals are experiencing vastly increased work loads as staff are cut back. Maybe it's time for AC FA's to simply work harder and smarter.

Sure..go ahead and put 3 F/A's on on AC A320 with 20J/120Y customers, and put valued customer YYZ717 in row 28 having to wait 3 hours for the completion of a bar and meal service.

Whatever. I probably wouldn't notice or care. Just keep the fares low and the profits high. This will require you to work harder & smarter.

I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
ac7e7
Posts: 655
Joined: Mon Oct 25, 2004 7:27 am

RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 2:23 pm

Sure..go ahead and put 3 F/A's on on AC A320 with 20J/120Y customers, and put valued customer YYZ717 in row 28 having to wait 3 hours for the completion of a bar and meal service.

I have travelled NW, and let me tell you..... never again...unless it's the last flight of the DC-9s. I would be willing to pay higher fares for IFE. There is nothing on those planes.
 
CDNpax
Posts: 36
Joined: Tue Dec 07, 2004 3:08 pm

RE: Air Canada Can't Get A Line Of Credit

Mon Dec 13, 2004 4:13 pm

Yyz717,

You have some strange and misguided ideas about running an airline. The minimum flight attendant rule is intended as a safety measure to protect us, the passengers. In the event of an emergency they are the only director of operations and the only people who give a damn about saving your arse. I'm quite glad to be a resident of the country with the strictest safety guidelines for airlines. Safety first! I hate to say it, but the government got this one right.

Furthermore, do you have any concept of the cost of packaging out your most experienced employees or attracting top quality employees when they know their career duration with the organization is a maximum of 10 years. That's absolutely ludicrous. Changing the bilingual regs... nuts! There are Canadians that travel to parts of the country where they do not speak the language. Would it not be shameful for an English-speaking Canadian to not get a pre-flight safety briefing in a language they understand? Or am I to assume that Quebec would be bilingual for all the anglophones while a Quebecer flying to Vancouver to make an Asian connection should expect not to get a safety briefing? Silly... Believe it or not... there are even francophones that fly from Calgary to Edmonton!!! And anglophones that fly from Montreal to Bagotville. We all deserve service in our official language of choice.

As a passenger who has spent the past 2.5 years in Tokyo and will be moving to Bangkok next week I can tell you now that AC should increase the fleet of 345. YYZ to HK flights are enjoying superb load factors (ditto for Delhi from what I've heard). These flights are the cornerstone to cementing AC as the airline of choice to Asia from Toronto (AC was losing lots of passengers to SE Asia that had been connecting through HK.) And for the record, AC has started making the most out of the rest of their fleet as well. My flight into NRT last week was a 763! Not a seat in the house empty. My flights to SFO and YUL in the 2 weeks previous were both full up as well. Fact is, AC has cleaned up their act. There's lots left to do but for the minimal difference in price I wouldn't be caught on WestJet. AC offers the most flexible schedules, newest fleet and horror of horrors, you don't have to pack a lunch! I can only assume you are a bitter disgruntled employee or something because if you flew as much as I do you would recognize and appreciate an airline that has turned itself around and is heading in the right direction.

CDNpax
 
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yyz717
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RE: Air Canada Can't Get A Line Of Credit

Tue Dec 14, 2004 12:46 am

You have some strange and misguided ideas about running an airline. The minimum flight attendant rule is intended as a safety measure to protect us, the passengers.

Then explain to me why a 1:50 ratio is satisfactory for the CRJ and only 1:40 for the A320 and above? Are CRJ passengers less worthy of safety? Or is the 1:40 just another bureaucratic rule that AC can't be bothered lobbying against?

Furthermore, do you have any concept of the cost of packaging out your most experienced employees or attracting top quality employees when they know their career duration with the organization is a maximum of 10 years. That's absolutely ludicrous.

Yes. It's done all the time throughout the private sector.

Changing the bilingual regs... nuts!

Even AC is asking for a change, so you seem to be out of tune with the fact that Canada is overwhelmingly an English-only country.

As a passenger who has spent the past 2.5 years in Tokyo and will be moving to Bangkok next week I can tell you now that AC should increase the fleet of 345.

This statement makes no sense.

And for the record, AC has started making the most out of the rest of their fleet as well.

This statement also makes no sense.

My flight into NRT last week was a 763! Not a seat in the house empty. My flights to SFO and YUL in the 2 weeks previous were both full up as well.

Anecdotal. So what? Anyway, this is no indication that AC made money.

AC offers the most flexible schedules, newest fleet

WJ has a more flexible schedule on many routes now. The WJ 73G fleet is younger than the AC 32x fleet.

I can only assume you are a bitter disgruntled employee or something because if you flew as much as I do yo

No, I have never worked for AC nor any other govt bureaucracy for that matter. As for travel, I probably travel far more that you do, so cut the bragging about yout little trips -- no one cares.
I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
RT514
Posts: 399
Joined: Sat May 15, 2004 2:11 am

RE: Air Canada Can't Get A Line Of Credit

Tue Dec 14, 2004 1:15 am

CDNpax: Furthermore, do you have any concept of the cost of packaging out your most experienced employees or attracting top quality employees when they know their career duration with the organization is a maximum of 10 years. That's absolutely ludicrous.
Yyz717:Yes. It's done all the time throughout the private sector.


Whether it may or may not be done "all the time throughout the private sector", is irrelevant. Human resources costs (particularly in the recruitment and training of staff) are one of the biggest yet preventable costs that companies face. Hence, why there is so much more emphasis on retention these days. As well, the court costs involved with having to deal with more than a half dozen angry unions would be very costly. It would be nice to "package-out" unionized staff, but it is neither realistic nor cost-effective.



CDNpax: As a passenger who has spent the past 2.5 years in Tokyo and will be moving to Bangkok next week I can tell you now that AC should increase the fleet of 345.
Yyz717: This statement makes no sense.


Sure it does. Asian traffic is booming and it's no secret that AC drools at the prospect of getting more A343's, A345's, and adding the A346 to meet this demand. Unfortunately, the unavailability of used A343's and AC's inability to afford the latter is preventing this from happening. To compensate, AC has re-evaluated its entire fleet and has put it to more efficient use, including pulling some B767's out of the desert.


CDNpax: And for the record, AC has started making the most out of the rest of their fleet as well.
Yyz717: This statement also makes no sense.


Sure it does, see the previous point.


CDNpax: My flight into NRT last week was a 763! Not a seat in the house empty. My flights to SFO and YUL in the 2 weeks previous were both full up as well.
Yyz717: Anecdotal. So what? Anyway, this is no indication that AC made money.


It may be anecdotal, but this is more likely to indicate that AC made some money than if CDNpax had been the only person aboard these flights.


Yyz717: No, I have never worked for AC nor any other govt bureaucracy for that matter. As for travel, I probably travel far more that you do, so cut the bragging about yout (sic) little trips -- no one cares.

Wrong, people do care. Besides, Yyz717, you make an average of over 10 posts a day here, so I can't see that you'd have the time to travel more than CDNpax does.
Thanks, CDNpax, for an interesting post.


 
ac7e7
Posts: 655
Joined: Mon Oct 25, 2004 7:27 am

RE: Air Canada Can't Get A Line Of Credit

Tue Dec 14, 2004 1:28 am

Anecdotal. So what? Anyway, this is no indication that AC made money.

Maybe not, since we don't have the numbers, but it is showing how AC is utilizing their fleet more efficiently than before.

WJ has a more flexible schedule on many routes now. The WJ 73G fleet is younger than the AC 32x fleet.

The age difference is minimal, come on. The oldest A320s were delivered in 1988. The rest came in during the 1990s, and the A319/21s were delivered in the mid to late 1990s, early 2000s. Give me a break.
 
JeffLAS
Posts: 126
Joined: Wed Nov 17, 2004 9:13 am

RE: Air Canada Can't Get A Line Of Credit

Tue Dec 14, 2004 3:23 am

Just wait! AC will eventually take that "huge dump" that everyone is talking about! Why you ask? Because Canada has the stupidest taxation system on jet fuel in the world. And they will never change it. Why you ask? Because they are great at running industries into the ground.  Nuts
" Jazz A-380, you have 2,100 feet from the intersection......Cleared for Take-off"
 
flyyul
Posts: 4394
Joined: Sun Jun 25, 2000 11:25 am

RE: Air Canada Can't Get A Line Of Credit

Tue Dec 14, 2004 3:43 am

Thanks for that insightful piece JeffLas  Nuts
 
Planesmart
Posts: 1716
Joined: Sun Dec 05, 2004 3:18 am

RE: Air Canada Can't Get A Line Of Credit

Tue Dec 14, 2004 3:45 am

Most airlines can get a line of credit to purchase or lease new or used aircraft.

Like you & I, the lower our credit rating, the higher the interest rate / effective cost of finance.

And if the rate is high enough, it's hard to make a dollar.
 
flyyul
Posts: 4394
Joined: Sun Jun 25, 2000 11:25 am

RE: Air Canada Can't Get A Line Of Credit

Tue Dec 14, 2004 3:46 am

You guys have to give it a rest..

Every day, your arguing about Air Canada, the pro's and con's have been stated over 1000 times in the last 3 years.

Just let it go, there are better things to worry about these days. How much of your life has been wasted arguing about, essentially, NOTHING.

 
flyyul
Posts: 4394
Joined: Sun Jun 25, 2000 11:25 am

RE: Air Canada Can't Get A Line Of Credit

Tue Dec 14, 2004 7:07 am

For a person claiming to be 36 to 45, your intelligence hasnt caught up to your age.

If you have something valuable or smart to say, add it. Your totally talking crap right now, about what... who knows.

Go find something better to do than to be thinking about Celine, ok  Big grin

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