Lakelad

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  1. . An Air Canada bailout should stick in the craw of Canadian taxpayers . Tue Mar 31, 2020 - The Globe and Mail by Konrad Yakabuski Until the coronavirus crisis stuck, Air Canada had been on an unprecedented roll. In 2019, Canada’s flag carrier posted record revenues, record liquidity and a record stock price. Indeed, since emerging from court protection from its creditors in 2004, the Montreal-based carrier had gone from industry laggard to one of the world’s top performing airlines. “The agility and consistency we displayed in 2019 gives me the confidence that we will successfully execute on the several key opportunities before us,” chief executive Calin Rovinescu said in February as Air Canada reported a year-end profit of $1.48-billion. Now, Air Canada has lined up with the rest of the Canadian air transportation industry in seeking a government bailout. On Monday, Mr. Rovinescu announced the “extremely painful decision” of temporarily laying off more than 15,000 unionized employees and reducing capacity for the second quarter that begins on Wednesday by as much as 90 per cent. What’s more, Air Canada’s pending takeover of Transat AT Inc., which has also laid off most of its work force as the COVID-19 pandemic grounds most international flights, is now in question due to a precipitous decline in global air travel that could last far beyond the current crisis. The coming months promise to be painful for workers. However, no one should shed a tear for Air Canada’s shareholders or top executives. They’ve been richly rewarded in recent years, which will make the thought of their airline now getting bailed out by taxpayers hard to swallow for many Canadians. One reason Air Canada’s stock had outperformed the market had to do with the company’s share repurchase program. Since 2015, Air Canada has spent more than $800-million buying back its own shares. Last year alone, the airline spent $378-million on share buybacks, which had the effect of boosting a company’s stock price by reducing the number of shares in circulation. The company suspended its share buyback program on March 2. On Monday, Air Canada said Mr. Rovinescu and chief financial officer Michael Rousseau have agreed to forgo their salaries for the second quarter, while other top managers will take a pay cut of between 25 per cent and 50 per cent. Last August, however, Mr. Rovinescu pocketed a whopping $52.7-million profit by exercising Air Canada stock options originally issued in 2013. That was on top of a 2018 compensation package of more than $11.5-million. In the United States, Democratic politicians have sought restrictions on share buybacks and executive compensation packages as part of the rescue packages approved under legislation that passed Congress last week. The US$2-trillion bill signed by President Donald Trump provides for tens of billions of dollars in aid to the country’s airline industry, prompting a major push back from left-leaning Democrats and other critics of corporate largesse. “To what extent are taxpayers being asked to bail out wealthy creditors, and to reward companies that, during the years when they made enormous profits, spent their money propping up their own stock prices?” Columbia University law professor Tim Yu wrote last week in a New York Times Op-Ed, arguing that the relief package “amounts to a bailout of private capital and the endorsement of a decade of self-enriching practices.” Whether the sacrifices being made by Air Canada’s top management now will be enough to prevent a similar backlash here may depend on whether Ottawa imposes stiff restrictions on share buybacks and executive compensation in exchange for providing a lifeline to the airline. The goal of the airline bailout, of course, is to ensure Air Canada and Onex Corp.'s WestJet are able to resume normal operations once the current crisis has passed. Without government aid, both airlines could face crippling cash shortages that threaten their very survival. As it stands, global air travel is unlikely to return to precrisis levels for several months after current travel restrictions are lifted. Some of the capacity now being cut by Canada’s airlines may not be fully restored in coming quarters if the economy fails to rebound quickly and unemployment levels remain high for the rest of the year. Air Canada’s takeover of Transat was already expected to lead the combined airline to cut some capacity on seasonal transatlantic and Caribbean routes. But with 2020 shaping up as a washout, the cuts needed for a return to profitability on those routes could approach or exceed Transat’s entire capacity. So why would Air Canada pay $720-million for Transat now? With Transat’s stock trading at less than half of the $18-a-share Air Canada offered last year to buy the struggling carrier, Mr. Rovinescu will face pressure to renegotiate – if not kill – the deal. .
  2. . Class action launched after airlines give vouchers, not refunds for cancelled trips Suit targets major Canadian airlines and travel companies, could affect hundreds of thousands of people Tue Mar 31, 2020 - CBC News Yvonne Colbert A British Columbia woman is launching a class-action lawsuit against several major Canadian airlines and travel companies over their decision to issue credits and vouchers instead of refunds for flights and vacations cancelled due to the COVID-19 pandemic. The legal action by Janet Donaldson, whose Vancouver-New York round trip on WestJet in April was cancelled, was filed last week in Federal Court against Swoop, WestJet, Air Canada, Air Transat and Sunwing. The suit has not been certified. Sébastien Paquette, a Montreal lawyer representing passengers in the suit, said Donaldson paid by credit card and was "disappointed" when she could not get a refund, "which she was allowed to receive by law." "This is a consumer-protection class action seeking to enforce each passenger's rights to a refund for monies paid for their air tickets, when they are not able to travel for reasons outside of the control of the passengers," the statement of claim said. It said companies should not be permitted to keep passengers' money for an indefinite period of time, whether they want to travel in the future or not. The class action applies to an unknown number of passengers, but it's estimated it could affect hundreds of thousands of people. It includes anyone "residing anywhere in the world" who has not received a refund and who bought a ticket with one of the companies before March 11 for a trip scheduled between March 13 and whenever the federal government withdraw's COVID-19 travel advisories. Airlines defend vouchers Airlines have slashed routes during the pandemic and cancelled many flights as the Canadian government urges people to avoid all non-essential travel outside the country. Many passengers have been frustrated at being offered travel vouchers instead of refunds. Paquette said part of the claim is asking that the money paid for the cancelled tickets be placed with the court until the case is settled. "We want to secure the class members their money. At this point it literally is their money, so there's no reason it should be kept in the airlines' accounts," Paquette said. Air Canada and WestJet did not respond to requests for comment before publication and Swoop had no comment. Sunwing said the decision "to suspend all flights was made as a last resort, in response to the exceptional circumstances faced across the industry and around the world." In an email, Air Transat's vice-president of human resources and corporate affairs, Christophe Hennebelle, said the situation "has placed an extraordinary burden on the industry, which puts its very existence into question." He said the company believes "that in such a force majeure situation, way beyond our span of control, we do not have to issue a full refund for travels that have not been completed." He called the 24-month credit voucher "an acceptable solution," saying Italy, Belgium, France and the U.K. have passed legislation to "secure that solution." 'It's the right thing to be done' Paquette said the airlines are forcing people to fly at a later date, when they may not wish to travel and could face a "substantially different price." He points out the companies are saving money on fuel and other operating expenses because of the cancelled flights. The lawsuit is being welcomed by people like Halifax resident Katie Gillis, one of those denied a refund after Sunwing cancelled vacations she, her fiancé and 30 others planned in Mexico for her wedding. Collectively, they spent more than $57,000 on the trip. "I'm super-pleased to hear that," Gillis said of the lawsuit. "It's the right thing to be done." Class-action lawsuits can take years to wind their way through the courts unless the defendants agree to a settlement. Paquette said he can't predict how the companies will respond, but lawyers are preparing in the event it goes to a trial. "We feel that this is wrong and class members should definitely get their money back," he said. Those who were denied a refund during the specified period are automatically qualified as part of the class action and do not have to do anything at this point. Paquette is urging people to keep their documentation, including ticket bookings, charges and emails, since it may be required in the future to prove a claim. None of the allegations in the statement of claim have been proven in court. .
  3. . Porter Airlines to get $135 million in funding from federal government after coronavirus grounds flights Porter halted all of its operations on March 20 with plans to keep its planes grounded until June 1 Sat Mar 28, 2020 - Financial Post The federal government will provide Toronto-based Porter Airlines with $135 million in commercial financing during the coronavirus pandemic that has grounded most air traffic and strained the global air travel industry. Porter Airlines told the Financial Post Friday that it arranged commercial financing with Export Development Canada secured by a portion of its fleet of 29 aircraft. The regional carrier, which operates from an island in Toronto Harbour, owns all of its aircraft and only has debt on three, according to an emailed statement. “With this strong balance sheet, we secured a loan similar to other arrangements previously made with EDC,” an airlines spokesperson said. “Many companies are making financially prudent plans in the current environment and this additional capital provides flexibility for our business. Porter has the financial resources to sustain the airline through this public health crisis.” Porter halted all of its operations on March 20 with plans to keep its planes grounded until June 1. It waived change and cancellation fees for customers who had to make last-minute travel arrangements. At the time, chief executive Michael Deluce called the speed of COVID-19 related developments “shocking.” “It is having an unprecedented impact around the globe on businesses, economies and people,” Deluce said in a statement, adding that Porter supports government efforts to restrict the spread of disease. Over the past few weeks, the federal government has met with representatives from Canada’s airline industry, including calls between Prime Minister Justin Trudeau and the CEOs of Air Canada and WestJet Airlines Ltd., the country’s two largest carriers. The industry has called for government support as demand for air travel plummets to near zero thanks to travel restrictions in place to quell the spread of the virus. It’s not yet clear exactly how Ottawa will support the wider industry, but requests for help got louder after the government banned non-essential travel to the United States. Canada’s major carriers have already laid off thousands of employees. WestJet laid off 6,900 employees, Air Canada 5,149 and Transat A.T. 3,600 people. The International Air Transport Association estimates that global airlines will collectively lose more than $252 billion in revenue due to the drastic drop in travel. .
  4. . Sunwing Airlines to halt operations after March 23 amid pandemic Tue Mar 17, 2020 - The Globe and Mail Eric Atkins - Transportation Reporter Holiday carrier Sunwing Airlines is temporarily halting operations, becoming the first Canadian airline to do so amid the COVID-19 pandemic. Toronto-based Sunwing said it is no longer taking passengers south, and will suspend all flights once it has flown its customers back to Canada from resort destinations in Mexico, South America, the Caribbean and Florida. About 470 pilots have been told flights will end after March 23 and were issued layoff notices, said Jerry Dias, head of Unifor, the employees’ union. Sunwing has a fleet of about 40 Boeing 737s. The privately owned company flies domestic routes as well as vacation trips to sun spots in the Caribbean and Europe. Rachel Goldrick, a spokeswoman for Sunwing, said the shutdown is “temporary” and will last until April 10, but “at this time we cannot confirm when commercial southern flight operations will resume. That is why Sunwing was forced to communicate layoffs to our flight and cabin crew members [Monday] evening.” She said the carrier intends to recall the pilots and flight attendants when service resumes. “This unprecedented situation has had a drastic impact on our business during a short space of time,” she said. Sunwing’s parent company, Sunwing Travel Group, bills itself as the largest “vertically integrated” travel company in North America, with $3-billion in yearly revenue from divisions that include three tour operators and more than 7,000 hotel rooms at vacation resorts in the Caribbean. The first of four Sunwing “rescue flights” from Toronto and Montreal departed on Monday to bring 500 Canadians home from Honduras, Aruba and Panama, countries that have announced border closings, she said. On Tuesday, “we expect to bring over 11,000 customers home to Canada and we are committed to doing so until all our customers are safely home,” Ms. Goldrick said. “Customers are returning on their scheduled flights, with any remaining seats being used to accommodate other Sunwing customers wanting to return earlier at no additional cost.” A global airline group on Tuesday said most airlines have only enough cash to survive for three months, and predicted a large number would fail because of the pandemic that has closed some borders and caused a steep plunge in demand for air travel. Mr. Dias and Sunwing added their voices to calls for government aid to prop up the industry. “We will not accept any situation where workers are left to fend for themselves, not at Sunwing, not anywhere," he said. “That’s why we’ve called on all levels of government to confront this unprecedented pandemic with unprecedented action to protect the livelihoods of workers affected by this crisis.” .
  5. . WestJet to suspend international & US flights Airline will focus on rescue flights in partnership with Canada's government Tue Mar 17, 2020 - CBC News by Sarah Rieger WestJet Airlines says it will suspend all international flights — including to the U.S — for 30 days, beginning this Sunday March 22. The final commercially-scheduled, Canada-bound flights taking off from international destinations will leave by 11:59 p.m., local time, that night. After that, the airline said it will operate rescue and repatriation flights in partnership with the Canadian government. As of Monday night, when the announcement was made, tickets were no longer available for sale for the 30-day period after March 22. The Calgary-based airline said the goal is to stop sending Canadians out of the country and focus on bringing them home. Prime Minister Justin Trudeau announced Monday that Canada will ban entry to most non-residents, except U.S. citizens. He's urging Canadians abroad to travel back to Canada as quickly as possible. 24:51 The decision came in response to Prime Minister Justin Trudeau's Monday appeal to Canadians overseas to return home. Over the weekend, Global Affairs Canada also urged Canadians abroad to return while they have the chance because countries around the world are imposing ever-tighter travel restrictions. WestJet said it's also lowering prices on remaining seats on flights into Canada, and is reducing its domestic flight schedule by 50 per cent. "While this is a difficult time, we now have the responsibility as a Canadian airline to bring our citizens home," CEO Ed Sims said in the statement. WestJet said Canadians abroad who plan to return home after March 22 should look to see if they can find an earlier return flight. If not, they should visit the Canadian government's website to register for possible repatriation. The coronavirus pandemic has had a dramatic impact on airlines' business worldwide. The union representing WestJet flight attendants cautioned last week that it could be expecting layoffs of more than 50 per cent of its staff. .
  6. . Transat CEO says Quebec prepared to help airline weather coronavirus crisis The government 'would have to' help airline industry, Jean-Marc Eustache says, referencing taxes incurred by airlines March 12, 2020 - Financial Post by Vanmala Subramaniam The chief executive of Transat AT Inc. says the Quebec government been in touch with his company offering “help” in the face of the coronavirus crisis, which has hit the travel industry hard. “(François) Legault said he is going to help everybody. They are already doing it. They are phoning us even before we told them,” Transat’s Jean-Marc Eustache told analysts on an earnings call Thursday afternoon. “I’m pretty sure they will be there to help because this is a very, very special situation.” Transat, which was founded by Eustache and Legault 30 years ago, has seen its stock price plummet 45 per cent over the last month. Airlines have been particularly hard hit by the virus as governments impose restrictive travel measures, and flight cancellations pile up ahead of the critical March break travel period. On Wednesday, U.S. President Donald Trump abruptly imposed a widespread ban on travel between the U.S. and Europe, a move that applied to 26 European countries, but excluded the United Kingdom. “Ottawa has been in touch, everyone has been in touch,” Eustache added, though he did not provide specifics on what kind of assistance might be coming. Transat acknowledged in its first quarter earnings statement that daily bookings had already been severely impacted by the virus, and that it would be “impossible to predict” the effect of COVID-19 on future bookings. That sent its shares cascading downwards, plunging 20 per cent to below the $10 mark in the first hour of Thursday trading, before closing near $11. Eustache emphasized the company would not provide an outlook for the second quarter or for the summer period, because of the level of uncertainty ahead. “I have been in this industry for 42 years. The only thing I can say is we will do what we have to do to survive. If we have to ground half the fleet — it is not something we want to do — we will do it. If we have to lay off people, we don’t want to do it, but we will do it,” he said on the call. He added that the government “would have to” help the airline industry, referencing taxes incurred by airlines. “They will have to do their part too. We will all do it together, step by step.” Transat’s rapidly plummeting stock price could potentially throw a wrench in a $720 million takeover bid by Air Canada, which was formalized last August but will only close pending reviews by the Competition Bureau, Transport Canada and EU authorities. Air Canada agreed to purchase Transat for $18 per share. A previous bid, which was rejected by major Transat shareholders, valued the company at $13 per share. Transat shareholders, including its biggest — Letko, Brosseau & Associates — voted overwhelmingly in favour of the all-cash deal after Air Canada sweetened its bid to $18 per share. Eustache’s own stake in the company is just over one per cent. On the call, the co-founder and CEO dismissed concerns raised by analysts that the deal was on shaky ground given Transat’s stock price, reiterating that it would go through, subject to government approval. “The price of the share doesn’t have anything to do with the deal. The conditions of the market doesn’t have anything to do with the deal. The virus is outside of the deal. Nothing material is happening right now that can change the price of the deal,” Eustache stated, in response to a question on the terms of the transaction. The Competition Bureau is expected to release its report on the transaction on March 23. Eustache cautioned analysts that the report would be negative, given the narrow scope of what the bureau evaluates. “The report will be tough for the transaction because it is about competition. We know it … there is nothing special with that,” he said, adding that transport minister Marc Garneau’s final decision on the deal is the only thing that matters. Air Canada and Transat have not discussed the deal since the outbreak of coronavirus, Eustache said, because they aren’t allowed to communicate until the Competition Bureau’s decision is made. Air Canada’s shares declined by almost 10 per cent on Thursday, extending the coronavirus-related drop to almost 50 per cent in the last month. The stock closed at $24.90. In a recent note, National Bank transportation analyst Cameron Doerkson forecast that Air Canada would suffer a severe drop in 2020 EBITDA, from $3.6 billion to just $2.2 billion as a result of a reduction in travel demand. But, he added, the company had a strong balance sheet and would have “more than sufficient liquidity” to fund the $720 million transaction. Air Canada’s break fee, according to the terms of the deal, would be $40 million. The airline did not respond to the Post’s request for comment on the status of the deal. Transat’s net loss for the first fiscal quarter of 2020 was $20.3 million, above forecasts, while its revenue was $692.8 million. The company’s chief operating officer Annick Guerard said that although the company has seen many cancellations, they have also seen data over the last few days that shows an uptick in the number of last minute bookings largely by younger people. “The younger segment is talking about getting the best deal ever and going on vacation,” she said. .
  7. . Air Canada union says flight crews should be self-isolating, airline disagrees Union says precautions such as gloves and masks aren't always available for flight crew Mon Mar 16, 2020 - CBC News The union that represents a large number of Air Canada's flight and cabin crew says its members should be isolating themselves any time they return to Canada for two weeks just as government authorities suggest everyone else does, but the airline says its employees are exempt from that policy. Wesley Lesosky, president of the Air Canada component of Canadian Union of Public Employees, told CBC News that the union became aware over the weekend that the airline thinks its staff are "exempt" from the advice of numerous government agencies that anyone arriving to Canada from abroad right now self-isolate themselves in case they have contracted the coronavirus that causes the COVID-19 illness. CBC News has obtained what appears to be a memo from the airline to its staff stating that after having "discussions with government authorities, we can confirm that these conditions do not apply to you as operating, deadheading or commuting cabin crew." Deadheading refers to when Air Canada staff ride on a plane while not working it, in order to get to a new destination where they are required to work a flight. The airline has not responded to a CBC News request about the veracity of the memo's contents. But the union says the policy is "inexplicably dangerous, short-sighted, and ignorant to the health of thousands of flight attendants who continue to work through these extremely trying times." "You're exempted given you're well trained and prepared to protect yourselves, spend less times in the countries being visited and have access to and use protective measures on board, including hand sanitizers, masks and gloves when and as appropriate," the airline's memo to staff reads. The union takes issue with that portion, suggesting that gloves and masks "are not always available for our Air Canada mainline or Air Canada Rouge crews when reporting for duty. This is outrageous and totally unacceptable." "We understand the risks we undertake in continuing to do our jobs," Lesosky said, "but we are not guinea pigs. We will continue to play our pivotal role in bringing Canadians home as this pandemic escalates, but we will not accept the company or the government taking us or our safety for granted any longer." .
  8. . Air Canada was the world's best airline stock two months ago. Now it's the worst Wed Feb 26, 2020 - Bloomberg News Two months ago, it was the world’s hottest airline stock. Now, investors are shunning it. Air Canada lost $3.9 billion (US$3 billion) in market capitalization from its January peak, making it the worst-performing airline on the Bloomberg World Airlines Index this year. Its shares have slumped 28 per cent on deepening fears that the spread of the coronavirus will hinder travel. On Tuesday, the carrier extended the cancellation of all flights between Canada and China to April 10 over concerns about the virus known as Coved-19. It also stopped daily non-stop flights between Toronto and Hong Kong until April 30 due to reduced market demand. New clusters of cases have emerged in Italy, Iran and South Korea. The Centers for Disease Control and Prevention said Americans should prepare for significant disruptions to daily life if the coronavirus begins to spread locally in the U.S. Donald Trump’s administration was also considering whether to adopt more restrictions on air travel because of the outbreak, White House economic adviser Larry Kudlow said. United Airlines Holdings Inc. — the biggest U.S. airline to China before American carriers temporarily suspended flights — withdrew its 2020 profit forecast late Monday, citing uncertainty from the virus. Last year, Air Canada won the global equity crown among airlines after rising 87 per cent with plans accelerate its global presence in leisure travel with the acquisition of tour operator Transat AT. Revenue from outside Canada grew to 64 per cent of total sales last year from 59 per cent in 2014, according to data compiled by Bloomberg. About one-fifth of the airline’s capacity is on Pacific routes. In its fourth quarter results last week, Air Canada reported earnings per share that missed the lowest analyst estimate. The airline’s outlook for the year saw first quarter Ebitda come in about C$200 million lower from the prior year, assuming its mainland China and Hong Kong services will fully recover by the third quarter and that the Boeing 737 Max aircraft will gradually return to services in that period. Air Canada still has a positive longer-term outlook despite facing near-term pressure from coronavirus risk, Canadian Imperial Bank of Commerce analyst Kevin Chiang wrote in a report published Tuesday. He sees the recent sell-off as “further buying opportunity” for investors. The stock has 14 buy recommendations, two hold ratings and none of the analysts covering the company believes investors should sell the shares, according to data compiled by Bloomberg. .
  9. . Kobe Bryant's widow sues helicopter company after fatal crash Wrongful death lawsuit says pilot, who was among 9 killed, should have aborted flight Mon Feb 24, 2020 - Associated Press Vanessa Bryant has sued the owner of the helicopter that crashed in fog and killed her husband, Kobe Bryant, and her 13-year-old daughter Gianna last month. The wrongful death lawsuit filed in Los Angeles says the pilot was careless and negligent by flying in cloudy conditions on Jan. 26 and should have aborted the flight. Pilot Ara Zobayan was among the nine people killed in the crash. The lawsuit names Island Express Helicopters Inc. and also targets Zobayan's legal representative, listed only as "Doe 1" until a name can be determined. Vanessa Bryant's lawsuit asserts that Zobayan was negligent in eight different ways, including failing to properly assess the weather, flying into conditions he wasn't cleared for and failing to control the helicopter. The lawsuit was filed as a public memorial service for Kobe Bryant, his daughter, and all the victims, including Zobayan, was being held at the arena where Bryant played most of his career. Calls to Island Express seeking comment were not answered, and its voice mail was full. The company issued a statement Jan. 30 on its website saying the shock of the crash had prompted it to suspend service until it was appropriate for staff and customers. The U.S. National Transportation Safety Board is investigating the cause of the crash into a hillside in Calabasas, on the outskirts of Los Angeles County. .
  10. . One more problem plaguing beleaguered Bombardier: its underfunded pension plans Mon Feb 17, 2020 - The Globe and Mail David Milstead - Institutional Investment Reporter Bombardier Inc. is getting smaller, but its pension deficit – the gap between what it owes employees in retirement and the money it has on hand to pay them – is getting bigger. The company’s annual financial statements filed Thursday reveal that the deficit in the company’s defined-benefit pension plans crept up to US$1.97-billion at the end of 2019, versus US$1.92-billion in 2018. The numbers have remained stubbornly high in recent years even as Bombardier sheds businesses, their employees and the pension obligations that come with them. The deficit in the company’s pension plans spiked to US$2.2-billion in 2016 and has only fallen gradually since, despite divestitures and other techniques to reduce obligations. While analysts and investors are focused on Bombardier’s looming debt, the pension deficit is an additional obligation that has received less attention. And on top of the pension, Bombardier also owed US$273-million in other retirement benefits, such as health care, to its workers. The numbers could change dramatically if the company succeeds in disposing of more of itself. Bombardier is on the verge of selling its rail business to French industrial giant Alstom SA. The sale is seen as a crucial cash-generating step for the company, as it owes more than US$9-billion to banks and bondholders. Bombardier chief financial officer John Di Bert said Thursday that about 40 per cent of the company’s pension deficit comes from its transportation division and 60 per cent from aviation. Many older companies, from manufacturing to retail to transportation, have struggled with defined-benefit (DB) pension plans, which promise retirees a set payout usually based on a formula that includes salary and years with the company. Fluctuating interest rates and irregular investment returns can create a mismatch between what’s owed and the assets of a plan – and if the gap isn’t narrowed, big companies can find themselves pumping hundreds of millions of dollars into their pensions. Younger companies offer only defined contribution (DC) plans, which put the investing onus on the worker, and the payout in retirement uncertain. Bombardier cut off access to the DB plans for all newly hired Canadian and U.S. employees in September, 2013, putting them in DC plans instead. It closed its British DB plans as well. Bombardier’s 2019 financial results show the wild swings that can cause stomach upset for plan sponsors. The present value of future payments to retirees – the plan’s liabilities – are discounted to today's dollars using an interest rate. The lower the interest rate, the bigger the present-day value. Falling interest rates in 2019 were the biggest contributor to a US$1.45-billion increase in liabilities because of changes in assumptions. (Every change of 0.25 percentage points in Bombardier’s assumed interest rate adds or subtracts US$514-million to liabilities, the company says.) The flip side: Investment returns added an extra US$954-million to the plan. The year-end 2019 pension numbers have already removed the 4,000 employees of the company’s Aerostructure business, scheduled for sale in 2020, and the US$414-million deficit for their pensions. Without that change, the deficit would have topped US$2.3-billion – a dollar amount that’s roughly 75 per cent of the company’s market capitalization. .
  11. . Garneau pledges to overhaul aircraft validation procedures a year after Boeing 737 Max disasters Mon Feb 17, 2020 - The Globe and Mail by Grant Robertson The federal government is preparing key changes to the way commercial aircraft are vetted in Canada, moves that will give Transport Canada more independence to scrutinize new planes in the wake of the Boeing 737 Max disasters. Additional requirements, such as independent test flights of all new aircraft by Canadian officials, will be implemented to give Transport Canada more oversight control. The aircraft approval process has long seen countries around the world rely heavily on the U.S. Federal Aviation Administration to inspect and certify Boeing planes. That system has come under intense criticism after the newly introduced 737 Max plummeted to the ground twice, killing everyone aboard. The first crash, in Indonesia, killed 189 people in late 2018. The second, less than five months later, killed 157 people – including 18 Canadians – last March in Ethiopia. Flawed software that forced the aircraft into nosedives has been found to be at fault in both disasters. An investigation by The Globe and Mail in December showed how Transport Canada relied heavily on the FAA to scrutinize the plane, while the U.S. regulator relinquished much of its oversight to Boeing’s own engineers. This created troubling blind spots for Transport Canada that went overlooked, particularly since the FAA failed to properly evaluate the software. The Globe investigation detailed how Canada signed off on 71 design changes to the 737 Max, but information on the faulty software was not included in the material Transport Canada was given by the FAA. “We are making changes to improve the rigour of our validation system," Amy Butcher, a spokeswoman for Transport Minister Marc Garneau, said in an e-mail to The Globe this weekend. The changes are still being formulated, she said, but will include independent test flights conducted by Canadian authorities on all new planes. Such steps will give the department a more active role in aircraft certification, rather than just verifying the work of the FAA, as was done in the past, and could help prevent similar blind spots in oversight. Further changes are expected after Canada concludes an international joint investigation into the 737 Max disasters, and will be announced once they are finalized, Ms. Butcher said. The changes won’t be limited to the 737 Max and will have implications for how all commercial airliners are scrutinized. The process is designed to build layers of checks and balances into the relationship between Canada and the FAA. “These new practices will continue moving forward and also evolve as we continue to review the system as a whole,” Ms. Butcher said. It is the first time that the government has signalled changes to its system of oversight since the disasters, which have seen the 737 Max grounded since last March. For decades, countries around the world have allowed the FAA to take the lead on certifying Boeing planes, since it was considered the gold standard of aviation regulation. Regulators such as those in Canada and Europe mostly came in at the end of the process to verify the FAA’s work. But Congressional hearings in the United States have exposed a deeply flawed system at the FAA, where Boeing was given increasing power to regulate itself since the early 2000s. In the case of the 737 Max, Boeing was in a race with its European rival, Airbus, and worried that the new software designed to stabilize the plane during flight would trigger regulators to require expensive simulator training for pilots. That might dissuade airlines from buying the 737 Max, so Boeing played down the software to the FAA. Regulators from around the world are now determining whether the Max should be allowed to fly again, and what changes would have to be made before that can happen. Transport Canada will not allow the plane to return until it has independently flight tested the new version of the Max itself. “Transport Canada will conduct its own flight testing after the FAA completes their own," Ms. Butcher said. “Our test pilots, along with Canadian pilots who fly the MAX, will participate in the Joint Operations Evaluation Board that will evaluate the training that will be required for pilots flying the MAX should it return to service.” Boeing thought the plane would be back in the air last summer after it rewrote the software, but the return has been delayed several times as regulators look at whether the system can be patched or if it should be stripped from the aircraft. Ottawa’s decision to bolster its aircraft-validation system is one of several moves Transport Canada has made in the past two months that have changed the department’s course on the 737 Max. After The Globe revealed that families of the 18 Canadian victims had not been granted a meeting with Mr. Garneau, despite numerous pleas to his office since early last summer, the minister agreed to meet with them last week. During that discussion, Mr. Garneau offered an apology for taking 11 months to speak with them. The families presented Mr. Garneau with 14 pages of questions about Canada’s approval of the 737 Max, including its decision not to ground the plane immediately after the second crash last March, as other countries did. Canada delayed four days, and internal documents obtained by The Globe showed that the government waited for input from the U.S. before making its decision. Mr. Garneau also agreed that the families would be allowed to testify at coming public hearings in Ottawa that will look into Canada’s scrutiny of the 737 Max. The families, who have only been allowed to meet with Transport Canada in private, are seeking a public process, saying the matter is too important for Canadians. The government blocked a bid for public hearings last year, with the Liberal majority on the Transport Committee defeating the proposal 5-3 in a vote. However, with the government no longer holding a majority on the committee, it is expected that those hearings will now proceed as early as this spring.
  12. . Liberals pull plug on decade-old plan to move elite Joint Task Force 2 unit Tue Feb 11, 2020 - The Globe and Mail Lee Berthiaume The federal Liberal government is pulling the plug on a decade-old plan to move the military’s elite Joint Task Force 2 to a new base, ending years of speculation and uncertainty for the commando unit’s members and their families. The decision, announced Monday by Defence Minister Harjit Sajjan in response to a question from The Canadian Press, comes despite the previous Conservative government’s having spent millions acquiring land for a new facility near Canadian Forces Base Trenton in Ontario. “In the changing global security environment, we remain focused on making sure that the Canadian special forces are equipped to deal with these challenges,” Mr. Sajjan said in an e-mailed statement. “I want to assure those who are serving with JTF2 and their families that we have no plans to move this facility out of Ottawa.” While the minister did not provide reasons for the decision, defence officials have previously spoken of a desire to keep JTF2, whose primary role is counterterror missions in Canada and abroad, close to Ottawa to guard against terrorist attacks. There have also been reports that the cost of the new base had skyrocketed in recent years, with Postmedia quoting internal Defence Department documents from 2016 as saying the price had more than tripled from $364-million to $1.2-billion. The previous Conservative government first decided to move the super secretive unit from its Dwyer Hill base west of Ottawa to a new location next to CFB Trenton in 2007. The Conservatives at the time felt having the commando unit close to an airport – CFB Trenton has the Canadian Armed Forces’ busiest airfield – would improve its ability to respond quickly to domestic and international emergencies. Ottawa bought property north of CFB Trenton but ran into fierce opposition from one farmer whose ultimately unsuccessful fight to keep his 90-hectare farm made headlines. The government eventually expropriated Frank Meyers’s land; he died last year. The government has not said how much it spent on the more than 200 hectares purchased for the move, but officials have pegged the total in the millions of dollars. Despite years of effort, however, the move never happened. The issue hung over the military and JTF2, even as members of the unit deployed to places such as Iraq to help in the fight against the Islamic State of Iraq and the Levant. Defence officials would later cite concerns about “lone wolf” terrorist attacks as one reason for keeping JTF2 close to Ottawa. One such attack in October, 2014, saw an ISIL sympathizer kill Corporal Nathan Cirillo in front of the National War Memorial before storming Parliament. Reports about the new facility’s escalating costs also raised questions about the feasibility of relocating the unit. Major-General Peter Dawe, the commander of Canadian Special Operations Forces Command, which includes JTF2, said in an interview last week that he was still awaiting word on whether the unit would move. While commanders had been able to minimize any impact on the unit caused by the uncertainty, Maj-Gen. Dawe added, “a decision would be welcome.” The Defence Department has not said what it will do with the land that was purchased near CFB Trenton, although officials have suggested it could be used for training or to store ammunition. ..
  13. . Air Canada's new reservation system has been plagued with problems — and may not be fixed for months Many customers have been unable to change their reservations or redeem their points and are waiting hours to speak to agents for help Tue Jan 21, 2020 - Financial Post Martin Patriquin Problems with Air Canada’s reservation system, which have frustrated myriad customers of the airline, may not be fixed until May, The Logic has learned. The airline rolled out its new Passenger Service System (PSS) in November 2019, just before the holiday travel season. Designed by Spanish firm Amadeus, it was meant to streamline Air Canada’s reservation process, allow the airline to communicate with the systems of its partner airlines in the Star Alliance group and otherwise improve the travel experience of its more than 50 million passengers annually. Yet the system, known as Altéa, has been beset by problems, including the inability to change bookings and redeem Aeroplan points online. The airline’s call centres have been overloaded as a result, with some passengers waiting up to six hours to speak with an agent. There have been nearly 2,200 complaints lodged against the Montreal-based carrier since the establishment of the Air Passenger Protection Regulations in July. When asked about the problems with the reservation system at a Montreal press event last week, CEO Calin Rovinescu walked away from reporters. Air Canada has promised to fix the problems as quickly as possible. But according to correspondence from a senior airline source, obtained by The Logic, doing so will take several months. The problem, reads the email, is the massive switchover from Res III, the decades-old legacy system the airline had been using. The change required system training for over 7,000 of Air Canada’s roughly 30,000 personnel, according to the company’s 2018 annual report. Though Altéa was meant to replace Res III in the manner of a “heart and lung transplant,” as Rovinescu put it in a memo last summer, the system today remains a pastiche of old and new. The company said the glitches haven’t affected flight operations. “We have added staffing, revised processes and taken other technical steps to better serve customers, and we thank our customers for their patience. We have not provided a timeline,” said Pascale Dery, Air Canada’s media relations director for Quebec and Eastern Canada, in a statement to The Logic. According to an August memo obtained by travel site The Beat, the transition to Altéa was to happen in three steps, of which the first — transferring more than three million passenger records to the new system — was scheduled for Nov. 18, 2019. After that, the company planned to change over its airport control systems, airport by airport, and fine-tune its direct booking system and the system that connects it with industry service providers like travel agents. “The importance and benefits of this two-year project cannot be overstated, neither can its complexity to implement,” said Rovinescu during Air Canada’s third-quarter results call last October. Once implemented, the new system was expected to provide the company $100 million annually in incremental benefits. Air Canada was at first reluctant to adopt the Amadeus platform to replace Res III. In 2013, Keith Wallis, at the time the company’s business development manager, said Amadeus’s offerings, as well as those of competitor Sabre, weren’t sufficiently flexible for the airline’s needs. The airline changed its tune by 2017, when it announced the partnership with Amadeus in what one Air Canada executive called “the evolution of what has been a long, successful and strategic partnership.” The Spanish company controlled 45 per cent of the global PSS market as of 2017. Yet its North American expansion hasn’t been without its kinks. Southwest Airlines, which began rolling out its US$500-million upgrade to Altéa in 2014, experienced similar technical issues with the product. Amadeus did not respond to a request for comment before deadline. .
  14. . White House considering changes to law banning U.S. companies from paying bribes overseas 'It's just so unfair that American companies aren't allowed to pay bribes to get business overseas,' President Trump said in a forthcoming book Fri Jan 17, 2020 - Bloomberg News by Josh Wingrove President Donald Trump’s administration is weighing whether to seek changes to a 1977 law that makes it illegal for U.S. companies to bribe foreign officials. “We are looking at it,” White House Economic Adviser Larry Kudlow said at the White House on Friday, in response to a reporter’s question about the Foreign Corrupt Practices Act. “I would just say: We are aware of it, we are looking at it, and we’ve heard complaints from some of our companies,” Kudlow said. “I don’t want to say anything definitive policy-wise, but we are looking at it.” A forthcoming book called “A Very Stable Genius: Donald J. Trump’s Testing of America,” by Washington Post reporters Philip Rucker and Carol D. Leonnig, reports that Trump has complained about existing rules, and that he clashed with former Secretary of State Rex Tillerson in 2017 when Trump pushed to scrap the FCPA. “It’s just so unfair that American companies aren’t allowed to pay bribes to get business overseas,” Trump said, according to an passage published by the Post. “We’re going to change that.” The law is designed to prevent individuals and businesses in the U.S. from paying money or offering gifts to foreign officials as a way to win business overseas. Critics of the law complain that it puts U.S. businesses at a disadvantage in places where bribes are customary. .
  15. Union messaging to members notes that it is actually a six year agreement (exp Feb/26).