Lakelad

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  1. . 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. .
  2. . 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.
  3. . 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. ..
  4. . 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. .
  5. . 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. .
  6. Union messaging to members notes that it is actually a six year agreement (exp Feb/26).
  7. https://twitter.com/i/status/1214756225293979648
  8. I wonder if going for settlement where you get cash/product in hand might be the more prudent route. I'm thinking of the possibility where Boeing at some point puts itself into Chapter 11 which in turn stays all lawsuits in progress. This would be similar to the situation with PG&E and the negligence lawsuits related to its role in the California wildfires.
  9. . Air Canada hit with outpouring of customer complaints over problems with new reservation system Transport Minister Marc Garneau said the regulator spoke with Air Canada about the complaints ahead of the busy Christmas travel season Tue Dec 10, 2019 - Reuters OTTAWA/MONTREAL — Canada’s Transport Minister on Tuesday urged the country’s largest carrier to resolve problems with its new reservation system, which have sparked an outpouring of complaints on social media. Transport Minister Marc Garneau said the regulator spoke with Air Canada about complaints of service delays due to changes with the reservation system ahead of the busy Christmas travel season. “They (Air Canada) are very aware we are getting a lot of calls about this,” Garneau told reporters in Ottawa. “I hope Air Canada can resolve its problem.” Customers took to Twitter to complain about changes to the carrier’s booking system that resulted in delays. Montreal-based Air Canada said in a statement that it is undergoing “temporary issues” after replacing its aging booking system. The carrier said there have been some cases of customers encountering “technical issues and longer wait times” as the carrier’s agents adapt to the new reservation system. “Call volumes and hold times are temporarily above normal and we have been working to address this,” it said. The carrier added that “the number of customers affected is relatively small in terms of Air Canada’s regular, overall activity and the new system is functioning largely as expected.” “Since Nov. 19 we have carried approximately 2.5 million customers, typical for this time of year,” Air Canada said. Garneau said there was nothing the government could do to fix the situation, and said it was his understanding that in certain cases people had filed complaints with Transport Canada. “Air Canada is aware that many Canadians, especially at this time of the year, are disappointed with the situation.” .
  10. . WestJet CEO on Wexit: 'I won't tolerate that kind of language' WestJet CEO Ed Sims said talk of Alberta separating from Canada runs counter to the economic interests of both the Calgary-based airline he leads and the province as a whole December 8, 2019 - Financial Post Amanda Stephenson, Calgary Herald WestJet CEO Ed Sims has taken aim at the Wexit movement, saying talk of Alberta separating from Canada runs counter to the economic interests of both the Calgary-based airline he leads and the province as a whole. “I won’t tolerate that kind of language,” Sims said, when asked in an interview for his thoughts on Wexit, the movement that promotes an independent Alberta and that has come into the spotlight in the aftermath of the recent federal election. “Having come from the U.K., I’ve seen three years of total economic paralysis and stagnation caused by Brexit,” Sims added. “I don’t envy our (U.K.) colleagues trying to deal with attracting people to a U.K. that feels very divided. And there’s no reason for Alberta to feel divided from the rest of Canada.” While Sims said he doesn’t for a second underestimate the difficulties the Alberta economy has faced in the last year — pointing to continued pipeline delays, recent layoffs at Husky Energy and Encana Corp.’s decision to move its corporate headquarters to the U.S. as examples — he said most economists are forecasting some degree of economic improvement in 2020. And he pointed out WestJet itself is confident enough in Alberta and its future that it chose Calgary to be the hub for its international Dreamliner service, launched earlier this year. In addition, three-quarters of WestJet’s total national capacity growth from 2015-2019 (the downturn years) has taken place in Calgary. Sims said he is increasingly concerned that talk of Western alienation and economic stagnation is reverberating beyond Alberta’s borders and creating the impression that this province is not an attractive place to invest. “If we are not careful we will start using the language of a depression rather than a recession,” he said. “I worry because we (WestJet) are a Canadian operation headquartered here.” Sims is not the first in recent days to express concerns about Wexit and the impact it is having on Alberta’s reputation as an investment destination. Last week, Mary Moran — CEO of Calgary Economic Development — said in a speech at a business forum in Lake Louise that the rise of separatist sentiment in Alberta cost Calgary an opportunity to attract a major technology head office. The city was high on the unnamed firm’s shortlist of potential hosts until alarms were raised over Wexit, she said in an interview after the speech. Sims said he has shared his concerns with municipal governments as well as the provincial government, and warned that overly negative talk could also damage Alberta’s reputation as a tourist destination. “We need to start adapting a more ‘whole-of-Canada’ voice than a provincial voice,” Sims said. “I am more than happy to take a lead role … in saying ‘there is no wall, and there will be no wall around Alberta.’ ” .
  11. . The German car industry’s costly bet on electric cars could backfire as cities fight cars of any description Fri Dec 6, 2019 - The Globe and Mail Eric Reguly - European bureau chief Germany’s automakers are spending hundreds of billions of euros for the transition to electric propulsion. It is the country’s biggest industrial gamble since the Second World War – and it may not work. The auto industry is going against the wishes of consumers, who do not want electric cars, according to polls, and cannot afford them. It’s fighting unions, who suspect the phase-out of regular cars is a ruse to fire them or pay them less. And it will soon be at odds with cities, which of course prefer electric cars to emission-spewing ones but would rather have no cars at all, because their streets are clogged to the point of paralysis. Volkswagen alone expects to spend €60-billion ($88-billion) on electric, hybrid and digital technology in the next five years, the equivalent of almost 70 per cent of its stock-market value. The company intends to have eight MEB – modular electric drive – plants humming away on three continents by 2022. It calls its strategy an “electric offensive,” as if it’s going to war against its own fleet of traditional cars. Good luck, Volkswagen, Daimler (owner of Mercedes-Benz) and BMW. The electric bet is a lot riskier than it appears. Let’s start with demand. In Germany, Europe’s top car market, a mere 16 per cent of drivers are thinking about buying an electric car, according to a September poll commissioned by electric utility E.ON. But even in the countries that most like the idea – Italy and Romania – only a bit more than a third of drivers would consider going electric. No wonder so few electric cars are rolling out of showrooms. In Germany, just 420,000 of the country’s private fleet of 47 million cars were electric or hybrids at the end of 2018, according to Bloomberg. Their market-penetration rate is similar elsewhere. Ontario has about 12 million vehicles, but only 41,000 of them are electric. The provincial government’s environment plan assumes that number will rise to 1.3 million by 2030 – a fantasy figure, all the more so since Premier Doug Ford ended the hefty purchase incentives for zero-emission cars last year. Range anxiety has a lot to do with buyers’ hesitation, as do the lengthy recharging times and the dearth of charging points on highways and in cities. While the range of some electric models is now competitive with that of gas- or diesel-powered cars, their prices are still outrageous. An electric Volkswagen Golf starts at €32,900 in Italy (where I live), before government incentives; the entry-level Golf with a gas engine costs €22,250. To be sure, the price of electric cars will come down, broadening their appeal somewhat, even if regular cars will always be cheaper. Here’s the problem – and it’s a biggie: Electric cars make the most sense in cities, not in rural areas, because their regenerative braking systems make their urban ranges better than their highway ranges. But cities everywhere are trying to repel cars, not attract them. Today, about 55 per cent of the world’s population lives in cities. By 2050, the proportion will rise to two-thirds, the United Nations says. Since most of these cities, from London to Beijing, suffer from terrible air pollution, it’s in their best interests to develop environmentally clean transportation. But that does not necessarily mean opening the city gates to electric or autonomous cars, which will be mostly electric. There’s no room for more cars of any description. To ban or restrict diesel cars, which some cities are doing, makes sense for air quality, but it makes no sense if they’re simply replaced by electric cars that keep traffic at a standstill. The point is that electric cars have the pollution advantage in precisely the areas – cities – where there should be no cars at all. If the sales projections of German automakers assume saturation market share for electric cars among urban buyers over the next decades, they may be horribly wrong. Cities will buy electric and hybrid buses and electric trams. The biggest municipalities will expand their subway systems. If cities want to be livable, there is no alternative. In 2020, Luxembourg will become the first country to make all public transportation – trains, trams and buses – free. The country has the most cars per capita in the European Union, and its traffic congestion is horrendous. It doesn’t want commuters to use any cars, even electric ones. Some of the big cities in Europe are bound to follow its example. Have the German car companies overestimated the potential popularity of electric cars? The tiny market share of such vehicles suggests they have, and the inevitable launch of anti-car campaigns could keep their sales from soaring. Still, they plan to spend fortunes developing zero-emission cars. Here’s a guess: The German government, which already hands out lavish purchase incentives for electric cars, will have to come to their rescue in a few years as these products sit in showrooms. .
  12. . IATA chief says aviation industry will counter flight shaming movement Tue Nov 5, 2019 - Reuters by Ahmed Hagagy The aviation industry is to launch a campaign it hopes will counter a ‘flight shaming’ movement that has weakened demand for air travel in Europe where some travellers are increasingly concerned about their environmental impact. The industry’s image has been damaged this year by a growing Swedish-born movement led by activists such as teenager Greta Thunberg calling for greater action against climate change, including ditching air travel. Global lobby International Air Transport Association (IATA), which represents nearly 300 airlines, is co-ordinating the campaign which will involve industry stakeholders. “We will launch a very, very big campaign ... to explain what we have done, what we are doing, and what we intend to do in the future,” IATA’s head Alexandre de Juniac told Reuters in an interview in Kuwait on Tuesday. The campaign will try to explain to the public how the industry is reducing its environmental impact, countering what de Juniac said had been “misleading information.” IATA is co-ordinating the plan through the Air Transport Action Group, a coalition of industry organizations and companies. De Juniac did not say when the campaign would launch but said it would be available to stakeholders across the industry including airports and airlines. Flight shaming has dented demand in Europe, particularly in northern parts but also in the United Kingdom, France, and Germany. “It’s difficult to measure and beyond European borders we have seen nothing but it will come,” de Juniac said. Commercial flying accounts for about 2.5% of global carbon emissions today but without concrete steps to alleviate the problem, that number could rise as global air travel increases. The aviation industry has already cut carbon emissions from each plane traveller in half since 1990, largely thanks to more fuel-efficient aircraft, and has a plan to cut net emissions by 2050 and achieve carbon-neutral growth from 2020. Airlines have warned of the negative impact of the flight shaming movement and some have criticized the industry for so far failing to explain itself. Emirates President Tim Clark said in October the industry had to do a better job addressing the issue, highlighting improvements in technology that have reduced the carbon footprint of aircraft. .
  13. . Air Canada plans to hire 350 pilots ahead of eventual Boeing 737 Max return Airline had to cancel relatively few flights after Max grounding, but needed to lease planes Tue Oct 29, 2019 - CBC News Air Canada's shares hit an all-time high Tuesday even though its earnings fell slightly below expectations last quarter as the grounding of the Boeing 737 Max continues to weigh down the country's largest airline. The Montreal-based company's earnings fell slightly below expectations last quarter, but shares hit a high of $48.09 on the Toronto Stock Exchange and sat at about four per cent or $1.83 at $47.55 in mid-afternoon trading. Chief executive Calin Rovinescu said once authorities lift the airspace ban it could take up to a year for all 50 Max jetliners slated to be in operation by mid-2020 to hit the skies. Air Canada says it plans to hire 350 pilots next year in anticipation of the return of the Boeing 737 Max "This is a process that will indeed be gradual. This is not an overnight process," he said. Rovinescu cited "the serious disruption to our overall operations and to our cost structure and profitability" caused by the now eight-month grounding of the 24 Max planes in its fleet and 12 more that had been slated for delivery by mid-2019. "The removal of thirty-six 737 Max aircraft, or about 24 per cent of our narrow-body fleet, from our schedule during our peak summer season exacted a toll," he said on a conference call with analysts Tuesday. Rovinescu's reiteration of the "extremely challenging and complex situation" of the 737 Max came less than an hour before Boeing CEO Dennis Muilenburg sat down for withering questions from U.S. senators about two fatal crashes and whether the company concealed information about a critical flight system. "We have made mistakes, and we got some things wrong," Muilenburg conceded. While the carrier covered more than 95 per cent of planned flying in the third quarter, it was forced to lease two Airbus A330s on top of leases and life extensions for other aircraft that are less fuel efficient than the Max 8. The Max 737 has been grounded since a March crash in Ethiopia, which occurred just over four months after another model went down off the coast of Indonesia. A total of 346 people died in the two incidents, with 18 Canadians killed in the Ethiopian crash. Air Canada has removed the Max from its flight schedule until at least Feb. 14, while WestJet Airlines Ltd. has ruled the aircraft's return until Jan. 4 but is mulling an extension. 'Gradual' process of reintegration expected The 12 undelivered Max aircraft now sit on Boeing lots, delaying Air Canada's hiring of pilots — the company currently has about 400 Max pilots, relegated to training for the time being. Fourteen more Max 8s were slated for delivery in the first half of 2020, but may now be pushed back. The company will be able to remove about 15 planes from its fleet over the next 12 to 15 months, on top of the two A330s, chief financial officer Michael Rousseau estimated. "This is a process that will indeed be gradual. This is not an overnight process," Rovinescu said, noting it could be up to a year after the airspace ban is scrapped before all 50 Max jetliners are in operation. Analyst Walter Spracklin of RBC Dominion Securities said the effects of the grounding were to be "most significantly felt" in third quarter, when capacity is tightest. However, he said the cost impact was not as bad as had been expected. "The key takeaway in this quarter from our perspective is that Air Canada has demonstrated that it can successfully manage a significant external event through better pricing and nimble cost management to achieve strong results," Spracklin said in a note to investors. Rare decline in capacity Doug Taylor, an analyst with Canaccord Genuity, highlighted how "the company has been able to effectively pass the added costs through to customers." Net income fell nine per cent year over year to $636 million in the quarter ended Sept. 30. Revenue dropped three per cent to $5.53 billion. On an adjusted basis, earnings per diluted share rose to $2.27, up from $2.10 a year earlier but below analyst expectations of $2.34, according to financial markets data firm Refinitiv. Aircraft fuel, which comprises close to one-quarter of Air Canada's operating expenses, cost the company $1.09 billion last quarter, 11 per cent less in the third quarter of 2018. The company saw capacity decline year over year for the first time in several years, but expects capacity growth of three per cent in the fourth quarter, said chief commercial officer Lucie Guillemette. Revenue from high-yield business cabin passengers increased by $33 million or nearly four per cent year over year. Domestic passenger revenues rose by $123 million or nearly nine per cent despite a slight capacity reduction, with a new fare category adding to a higher yield. Rovinescu said he hopes Air Canada's acquisition of Transat A.T. Inc., which shareholders approved overwhelmingly in August, will receive regulatory approval by mid-2020 following heavy scrutiny from the Competition Bureau. .
  14. . I just took the world's first 20-hour flight. Here’s what it did to me and why I would take it again Flying laboratory explored ways to reduce soul-crushing, body-buckling jet lag Mon Oct 21, 2019 - Blooberg News Angus Whitley I’ve just endured the world’s newest longest flight, a 16,200 kilometre (10,100 mile), nonstop ultra-marathon from New York to Sydney. It took about 19 and a half hours, and was almost as demanding as that sounds. The record-breaking Qantas Airways Ltd. flight touched down early Sunday morning in Australia. The Boeing Co. Dreamliner delivered its few dozen passengers — including yours truly — to their destination more or less intact, even if some of us were not quite sure what day it was. Qantas wants to begin flying the time-saving route commercially as soon as 2022, so the airline used this test trip to explore ways to reduce its inevitable downside: Soul-crushing, body-buckling jet lag. Here’s how my journey unfolded in real time. Off the Ground Our plane has just left JFK International Airport, and it’s already become a flying laboratory. Since the goal is to adapt to our destination’s time zone as fast as possible, we click into the Sydney clock right off the bat. That means no snoozing. The lights stay up and we’re under instructions to stay awake for at least six hours — until it’s evening in Australia. This immediately causes trouble for some passengers. Down one side of the business-class section, six Qantas frequent flyers are following a pre-planned schedule for eating and drinking (including limiting alcohol), exercise and sleep. They wear movement and light readers on their wrists and have been asked to log their activities; they’ve already been under observation for a few days and will be monitored for 21 days in total. Most of them are bingeing on movies or reading books, but one of them is dozing within minutes. To be fair, I feel his pain. It may be the middle of the day in Sydney, but my body is telling me it’s pushing midnight back in New York. Two Hours In It’s feeding time, and a key moment in the experiment. The specially designed dishes are supposed to fire me up, and a flavorful serving of poached prawns with chili and lime is like a gentle culinary slap in the face. Spicy Chinese-style cod with jasmine rice and sesame seeds repeats the explosive action. I’m momentarily awake. The plane’s 40 passengers, including media, are all in business class: With so few passengers, nobody needs to travel economy. In an interview, chief executive Alan Joyce tells me the real Project Sunrise flights — if they go ahead — will have more legroom in economy than standard planes, and there will be some space at the back of the aircraft for stretching. The six human guinea pigs at the heart of the research are seated on one side of the cabin. I want to do my own set of tests to see how my body is holding up. Poached prawns with chili and lime, designed to wake passengers up. Angus Whitley/Bloomberg After speaking to a travel doctor in Sydney before the trip, I’m armed with equipment to monitor my blood pressure, heart rate and oxygen-saturation levels. I’ve also got a memory test and a mood questionnaire. I want to see if a flight this long impairs my brain or dims my spirits. The three-hourly tests I take during the first half of the flight reflect the demands of this trip. My blood pressure is elevated, though not high, and my heart rate picking up. My mood is light, though darkening very gradually. Three Hours In The physical pressure of this experiment is clear. Around me, passengers are standing up just to stay awake. The crew have been asked to keep sleep diaries, and to use iPads to rate their fatigue, reaction times, workload and stress. That dozy frequent flyer at the front of the plane is asleep, again. While I’m finding this regime fairly challenging — and I’m not even in a do-it-tough economy seat — I try to keep things in perspective. After I first wrote about this upcoming flight last week, one reader emailed to urge me into a stouter mindset. During the Korean War in the early 1950s, he said, he regularly flew 40-hour reconnaissance missions with crew rotations every six hours. “Man up,” the 83-year-old told me. Point taken. Four Hours In Marie Carroll, a professor at the University of Sydney who’s overseeing the passenger research on the flight, rallies her troops at the back of the plane. “This is the time, guys, when we really have to work through this,” she tells them. Moments later, they’re leaning against the food trolleys in the galley, stretching. Next, they perform upright press-ups among the empty economy sets. As a finale, they attempt synchronized dance moves in the aisles. All in the name of science. It looks like cabaret, but beating jet lag is serious business. Beyond the sleepless nights and daytime fatigue, experts say critical processes including heart function and metabolism are upset when the body clock gets disrupted. Seven Hours In A second meal arrives. For me, being fed twice in a relatively quick succession has really helped time pass quickly during the first part of the flight. This part of the menu should mean the next few hours slip by too: It’s heavy on carbohydrates and designed to send us to sleep. The sweet potato soup with creme fraiche is thick and luxurious, the toasted cheese sandwich less so. The chef on the plane tells me he’s been preparing our meals for three days. The lights are dimmed at last, and it feels like I’ve been released. I crash for six hours straight. That’s longer than I can remember sleeping without waking on any other flight, even with the business-class privilege of a flat bed. Fourteen Hours In Across the board, my own medical tests suggest I’m coping. My blood pressure, which the doctor in Sydney said would be a good gauge of stress and fatigue, is back to normal. My heart’s pumping slower, I ace my memory test, and my questionnaire shows my mood is brighter. The research on the passengers and crew will feed into Project Sunrise, Qantas’s plan to start direct commercial services connecting Sydney with New York and London. Other super-long flights from Australia’s eastern seaboard to South America and Africa might follow, Qantas says. On board, Joyce tells me he’ll “absolutely” roll out this flight’s regime on his other long routes — if the science shows it helps. The trick is accommodating those who want to drink and snooze at will, Joyce says. But don’t go booking your round-the-world flights just yet. Qantas needs new planes from Boeing or Airbus SE that can do the job with a full load of passengers, and a new deal with crew to work longer than 20 hours. “It needs everything to come together,” Joyce says. He initially had dreams of turning these super-long flights into flying hotels, with sleeping berths or a work-out zone. That vision gave way to reality when profit margins proved too tight to waste space on such luxuries. Our plane doesn’t have the range to haul a full load of passengers with luggage to Sydney. It took off with its fuel tanks maxed out — about 101 tons. To keep the weight down, there’s no cargo, and food and drink are limited. In New York, the captain had seemed confident we’d make it to Sydney with gas to spare. He planned on landing with six tons of fuel, enough to stay airborne for another 90 minutes. Seventeen Hours In Breakfast time, and there’s no limp sausage. Instead, it’s a bowl of ancient grains, avocado puree, warm haloumi cheese and a herb salad. This flight is turning everything on its head. One of the frequent flyers, Sydney-based investor Nick Mole, says he got almost eight hours’ sleep and feels good. What about a full day’s work after landing? “I probably could do that,” he says. He thinks the bigger test will be how he copes in a couple of days. A view of Sydney from on board the Dreamliner. Angus Whitley/Bloomberg Preparing to Land I feel better now than I did after flying to New York from Sydney a few days ago with one stop. The dozen or so hours it took to reach Los Angeles were followed by a grating hour and a half queuing at immigration with hundreds of other zombified travelers. As our plane approaches its destination, Joyce addresses everybody on board. He tells us the flight has given him more confidence that Project Sunrise can work. And come Sunday lunchtime in Sydney, I’m feeling jaded but far from debilitated. I even make it through a children’s birthday party, surely an acid test of anyone’s nerves. Personally, I would choose a direct Sydney-New York flight over one with a layover. But it won’t suit everyone: It took discipline and work to stick to the no-sleep routine in the first half of this flight. There may be a benefit to switching to the destination time immediately, but it comes at a price. I feel like I had to earn it. The author traveled to New York at Bloomberg’s expense to join the Qantas flight back to Sydney.
  15. . When it comes to electric vehicles, where do parties stand? Wed Oct 16, 2019 - The Globe and Mail by Neil Vorano Climate policy is at the forefront of the coming federal election. All the major parties have their own take on reducing emissions, including tax credits, bans on single-use plastics, promises on renewable energy and even plans to retrain fossil-fuel workers for the renewable energy sector. But with transportation making up 29 per cent of emissions in the United States in 2017, according to an EPA study, and light-duty vehicles making up 59 per cent of that, electric cars could be an important step in making change. But when it comes to the future of electric cars in Canada, which party will lead the charge? Here are the positions of each major party when it comes to zero-emission vehicles on our roads. Liberals The Liberal government’s last budget in March earmarked $130-million over five years to advance both electric charging and hydrogen fuel stations across the country for EVs and fuel cell vehicles, which would include workplaces, remote locations and other public areas. As well, an added $300-million over three years would be set aside to provide incentives of up to $5,000 for buyers of zero-emission vehicles (ZEVs) under $45,000, or ZEVs below $55,000 with seven seats or more. Another $5-million would go to Transport Canada to work with automakers to set sales targets for EVs in the coming years. All of this works toward the party’s target of making EVs 30 per cent of all light vehicles on the road by 2030 . Conservatives Perhaps tellingly, a climate change debate scheduled for Oct. 16 at the University of Ottawa was cancelled because the Conservatives refused to participate. Of all the parties, the Conservatives have given us the least to look forward to when it comes to zero-emission vehicles. During a French language debate on Oct. 2, leader Andrew Scheer said that the party will continue the federal EV rebate program until the end of its schedule. He then quickly pivoted to talk of producing more Canadian gasoline. And let’s not forget Ontario’s short-lived $14,000 EV rebate, which was set up by former premier Kathleen Wynne and almost immediately cancelled when Conservative leader Doug Ford took office. The only nod to green vehicles from the Conservatives is their promise to work on developing electric vehicle technology, although there’s no definitive plan or budget. NDP Party leader Jagmeet Singh is a proponent of financial incentives for ZEVs, saying they will start at the same Liberal target of $5,000, as well as waiving the federal sales tax. But the party also promises to raise those incentives eventually to a whopping $15,000 to buyers. The caveat? The vehicles must be made in Canada, which means consumers have just one choice: the Windsor, Ont.-built Chrysler Pacifica Hybrid minivan. Of course, this is a move to appeal to the Canadian Auto Workers union, but it’s highly unlikely – actually, pretty well impossible – that this will push automakers to move their ZEV production to Canada. The party also vows to convert government fleets to ZEVs, create what they call a ‘centre of excellence’ for ZEV research and development, expand the public charging network and give further incentives of $600 for home chargers, all toward a target of 100 per cent ZEVs on Canadian roads by 2040. Greens There are more incentives here, although not as many as you might expect. Leader Elizabeth May also vows to waive the federal sales tax on both new and used ZEV purchases. The party also plans to expand charging stations around the country, especially at government facilities, although there is no specific plan or budget. One oddity: While the Greens are promising to convert all Canada Post vehicles to EVs, there is no mention in their platform of any financial incentive for consumers to purchase battery powered vehicles, which is strange coming from a party whose entire platform – its existence, even – revolves around saving the planet. In summary From a purely consumer standpoint of someone who wants to put an electric vehicle in their driveway, the Liberals are the best bet by far, while the Conservatives don’t even merit a blip on the radar. But beyond financial incentives and infrastructure investment, there is one surefire way to get more Canadians into electric cars, and that’s by doubling or even tripling the price of gasoline. Unfortunately, every politician of any party stripe knows even the mere mention of that is political suicide. . .