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SpaceshipDC10
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Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 12:13 pm

They'll do so if Bill C-10 isn't passed. The Bill, if accepted, would give AC all the control as to where heavy maintenance is done on its fleet, thus allowing the airline to be more competitive.

http://www.winnipegfreepress.com/busine ... 04711.html
 
airtran737
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 12:25 pm

Good for AC. The government shouldn't be telling them where they have to do their heavy MX.
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aviationaware
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 12:28 pm

Commendable use of leverage - although quite sad to see for the Canadian economy.
 
jetmatt777
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 1:19 pm

Either way, the Canadian economy loses. Air Canada will outsource maintenance to another country, thus affecting Canadian jobs. If they cancel the order, Bombardier will lose out and risk jobs there as well.
 
beechnut
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 1:27 pm

Well given that it's a Liberal bill and the Liberals currently have a majority in the House of Commons, it's fairly likely that the bill will pass. It remains to be seen if the senate will flex its newly acquired muscles as it did on the assisted-suicide bill, but ultimately that one passed as well.

It would be nice to see the bill pass, and have AC subsequently lock in their order. Without knowing the numbers I think that will have longer-term benefits than aircraft Mx. Maintenance is not a huge source of innovation, but new aircraft design is, which is also what drives Mx innovation.

Beech
 
Amiga500
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 1:32 pm

So, no doubt then that the original choice of CSeries was highly political.

I'm not sure how this ties in to any WTO restrictions on illegal aid (aid not necessarily having to take the form of money).
 
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PITingres
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 1:40 pm

Amiga500 wrote:
So, no doubt then that the original choice of CSeries was highly political.


Maybe it was and maybe it wasn't, but there is no possible logic that leads from the maintenance issue to the original CSeries decision.

You're basically saying "I think X was political, and look here is something involving the same players that is political, so X must have been political." That's not a valid conclusion. I'd say that there is plenty of doubt.
Fly, you fools! Fly!
 
Amiga500
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 1:51 pm

PITingres wrote:
Maybe it was and maybe it wasn't, but there is no possible logic that leads from the maintenance issue to the original CSeries decision.


I don't know what you mean saying the above then the below:

PITingres wrote:
You're basically saying "I think X was political, and look here is something involving the same players that is political, so X must have been political." That's not a valid conclusion. I'd say that there is plenty of doubt.



Do you mean "there is no confirmed link between the maintenance issue and the original CSeries decision"?

In that I agree - we've nothing from any party (AC, BBD or the govt) saying so. I'd have a hard time proving it in court without access to information not in the public domain.


While you could argue about my use of "no doubt", and indeed, its maybe a little strong... but, if it walks like a duck, quacks like a duck...

I'd be 99% leaning toward there being political influence in the CSeries decision - that influence being most public in the maintenance contracts.


-------------------------------------------------------------

It'd be interesting if the Feds turned around and said "Fine, we'll open Billy Bishop to jets then." :lol:
 
INFINITI329
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 2:21 pm

The initial fight was between the govt of Quebec and AC. If they cancel the order the lawsuit would more than likely be reinstated. AC has already been found guilty of violating a 1988 law relating to mx center in Quebec. They are blowing smoke.
 
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Quantos
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 3:10 pm

INFINITI329 wrote:
The initial fight was between the govt of Quebec and AC. If they cancel the order the lawsuit would more than likely be reinstated. AC has already been found guilty of violating a 1988 law relating to mx center in Quebec. They are blowing smoke.


Yeah, that's what I'm thinking too. Legally, it was looking pretty bad for AC, which is why they were seeking a way to avoid going in front of the courts in the first place. Although they are no longer a crown corporation, they are still bound by a number of laws that were passed when AC was privatized. The govt of Quebec would be absolutely livid if AC ended up cancelling the agreement, and they would indeed pursue the lawsuit option.
Quantos,

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PanAm788
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 5:14 pm

Maybe it was and maybe it wasn't, but there is no possible logic that leads from the maintenance issue to the original CSeries decision.


You are correct that there is no logic and that is precisely why this shows that the CSeries order was political. If the CSeries was bar none the best aircraft for AC then there is no way they would threaten to cancel the order. Since it was clearly a political order, it is on the bargaining table.
 
StTim
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 5:20 pm

Of course they would threaten if they wanted to squeeze a deal.
 
32andBelow
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 5:34 pm

jetmatt777 wrote:
Either way, the Canadian economy loses. Air Canada will outsource maintenance to another country, thus affecting Canadian jobs. If they cancel the order, Bombardier will lose out and risk jobs there as well.

A lot of MX is outsourced from the US to Canada. Please look at the economy globally. Also it doesn't mean the Canadian MROs are going to lose, they just need to have competitive pricing with other options.
 
wrongwayup
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 5:37 pm

Everyone keeps talking about this as a "political" order. This is not Air Canada being pressured by the government(s) to buy C Series, but Air Canada buying the C Series to (among other things) get what they want from the government(s). It's an important distinction...
 
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Aesma
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 5:50 pm

PanAm788 wrote:
Maybe it was and maybe it wasn't, but there is no possible logic that leads from the maintenance issue to the original CSeries decision.


You are correct that there is no logic and that is precisely why this shows that the CSeries order was political. If the CSeries was bar none the best aircraft for AC then there is no way they would threaten to cancel the order. Since it was clearly a political order, it is on the bargaining table.


I disagree. Air Canada could well make empty threats, especially if they're the only ones knowing they're empty.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
ec99
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 5:56 pm

wrongwayup wrote:
Everyone keeps talking about this as a "political" order. This is not Air Canada being pressured by the government(s) to buy C Series, but Air Canada buying the C Series to (among other things) get what they want from the government(s). It's an important distinction...


No one here know exactly what motivated AC to order these planes from BBD. They may have faced government pressure, they may have done this to secure future benefits or leverage (such as this agreement) or they may have decided it was just the right plane and now they decided to play a bluff and see if they can get Ottawa and Quebec City to blink first.

I think AC got unlucky with Delta announcing the big order before this bill passed. With BBD looking really shaky before that order, they would have had much more leverage. After that Delta order, Quebec's big loan to BBD last year looks a little less risky. That said, BBD still needs more orders before they will be able to pay back the loan and that gives the provincial government a little more incentive to work with AC to on perhaps agreeing to move some maintenance away from Quebec in exchange for keeping the order.

Finally, I found a few Canadian newspaper articles about when this bill was introduced and they both seem to indicate it was a pretty clear quid pro quo. I don't know if this had any impact on their decision making but it seems like AC was promised concessions prior to ordering the C-series.

http://business.financialpost.com/news/ ... eries-deal

http://montrealgazette.com/business/tru ... =bfce-0eaa
 
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N717TW
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 22, 2016 9:56 pm

I could be wrong, but wasn't the MX part of the settlement to the AC-Gov't of Québec litigation? If so, that's not the gov't telling AC what to do, that's negotiating a settlement that ends a legal dispute and no different than two private parties reaching agreements that benefit (or better stated, that are less painful) each other.
 
wrongwayup
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Re: Air Canada threaten to cancel agreement to buy C-series

Thu Jun 23, 2016 12:21 am

N717TW wrote:
I could be wrong, but wasn't the MX part of the settlement to the AC-Gov't of Québec litigation? If so, that's not the gov't telling AC what to do, that's negotiating a settlement that ends a legal dispute and no different than two private parties reaching agreements that benefit (or better stated, that are less painful) each other.


You are absolutely correct. AC was due for a trip to the Supreme Court this year, and that suit sought damages on the order of nine figures. Think: lost tax revenue for ~2000 workers for several years after they moved maintenance offshore, allegedly illegally.

By getting the gov't to drop that in exchange for C Series maintenance in Canada (which doesn't happen until well into the 2020s if BBD and P&W marketing material is to be believed), AC gets the aircraft they need, at the price that they want (AC has been drip-torturing BBD for years - read up on "onerous contracts" in BBD's investor reports) and dodges a big dollar settlement in the near term.
 
sebring
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Re: Air Canada threaten to cancel agreement to buy C-series

Thu Jun 23, 2016 1:36 pm

First, LeeHam had a good analysis of the onerous contracts provision in BBD results - in essence, BBD is following global accounting practices that Boeing and Airbus do not, but should, for their new aircraft. We all know that large, early orders for a new plane are often discounted more than small, late cycle orders years later for the same aircraft. That's how everyone plays the game. Only BBD is reporting those startup orders properly, with some transparency for shareholders, while the world mulls just how many years it will take Boeing to turn a real profit - net of all development costs as well as current fabrication costs - for the 787 family.

Secondly, this whole thread is moot: The amended ACPPA has been passed into law, and Air Canada will presumably move on now to signing a contract for the 45 firm CSeries aircraft plus options.

http://aircanada.mediaroom.com/index.php?s=43&item=1035
 
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enilria
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Re: Air Canada threaten to cancel agreement to buy C-series

Thu Jun 23, 2016 1:50 pm

Amiga500 wrote:
I'm not sure how this ties in to any WTO restrictions on illegal aid (aid not necessarily having to take the form of money).

Since DL won't complain as they probably got an even better deal than AC, I don't there is anybody left to complain.
airtran737 wrote:
Good for AC. The government shouldn't be telling them where they have to do their heavy MX.

Or what nationality flights attendants should be ? or pilots ? I'm always incredulous that maintenance somehow is treated differently than pilots or FAs in the march of aviation nationalism. The same airlines complaining about competitors using foreign air crews use foreign maintenance staff.
 
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Devilfish
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Re: Air Canada threaten to cancel agreement to buy C-series

Thu Jun 23, 2016 2:42 pm

sebring wrote:
Secondly, this whole thread is moot: The amended ACPPA has been passed into law, and Air Canada will presumably move on now to signing a contract for the 45 firm CSeries aircraft plus options.

Expedited in no small way by this.....

http://www.defense-aerospace.com/articl ... eries.html

Did a double take when I thought I read "SCALP" as the limited partnership's name. :)
"Everyone is entitled to my opinion." - Garfield
 
Amiga500
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Re: Air Canada threaten to cancel agreement to buy C-series

Thu Jun 23, 2016 4:59 pm

Devilfish wrote:
Expedited in no small way by this.....

http://www.defense-aerospace.com/articl ... eries.html


This is big news.

I believe there are ripple effects already being felt from this.
 
Skywatcher
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Re: Air Canada threaten to cancel agreement to buy C-series

Thu Jun 23, 2016 6:01 pm

I just read the Winnipeg Free Press article linked to the original post of this topic. At the end it mentions that bill C-10 is in the senate for final rubber stamping. Looks to me like the threat is not really an issue.
 
airtran737
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 29, 2016 12:15 pm

enilria wrote:
Amiga500 wrote:
I'm not sure how this ties in to any WTO restrictions on illegal aid (aid not necessarily having to take the form of money).

Since DL won't complain as they probably got an even better deal than AC, I don't there is anybody left to complain.
airtran737 wrote:
Good for AC. The government shouldn't be telling them where they have to do their heavy MX.

Or what nationality flights attendants should be ? or pilots ? I'm always incredulous that maintenance somehow is treated differently than pilots or FAs in the march of aviation nationalism. The same airlines complaining about competitors using foreign air crews use foreign maintenance staff.


The pilots and flight attendants should be Canadian. I don't want any foreigners taking away my job in the cockpit. I am not saying that AC should sent the MX to Honduras or anything like that, but they should be able to have the choice to send it where they want. It shouldn't be left to the government to use protectionism to impede AC's bottom line.
Nice Trip Report!!! Great Pics, thanks for posting!!!! B747Forever
 
art
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Re: Air Canada threaten to cancel agreement to buy C-series

Wed Jun 29, 2016 3:50 pm

Five days after the Canadian parliament cleared a legal obstacle, Air Canada has finalised a firm order with Bombardier for 45 CS300s, including options to buy 30 more.

https://www.flightglobal.com/news/artic ... 0s-426770/

Been away for a month. This different system is a BIG step backwards. Yuuuuuuuk

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