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Small aircraft Decision at AC


Guest stator
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Many in the business community have been watching the argument between Air Canada pilots and Air Canada Jazz pilots with interest. Most foresee that the amount of return realized by existing creditors and future investors will be impacted somewhat by which company the aircraft are placed at.

I do believe that there are few business people who understand the approach of the Air Canada Pilots. It would appear that the Air Canada Pilots want all of the small jet flying. I am operating from the perspective that it is much more economically feasible to operate these aircraft at the Air Canada Jazz subsidiary. It baffles many in the business community why a union would want to weaken the financial position of the company that is currently in bankruptcy protection. As an Air Canada pilot I would be hoping to exit the CCAA proceedings in the strongest form possible so as to compete and expand in a very aggressive and competitive market. That being said it is understood there would be implications for the Air Canada Pilots union membership. It would make sense if the small aircraft went to the subsidiary and the Air Canada Pilots made a deal to keep their affected members working at the subsidiary. If this approach were taken the company would remain more viable thus creating more opportunity for the majority of Air Canada Pilots in the future.

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Guest Max Continuous

... and if that were true TF, why would an intelligently managed company like Trinity Time being taking the equity position in the company that it is?

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Guest Max Continuous

... and if that were true TF, why would an intelligently managed company like Trinity Time be taking the equity position in the company that it is?

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Perhaps Victor Li has a plan. He knows the issues surrounding the pilots, one can only believe that he has a "solution". If the "solution" doesn't pan out, or isn't accepted by the various parties involved, then AC will likely be the equivalent of a feline on it's last and final life.... AC will likely not have another opportunity to enter CCAA and emerge a stronger carrier ever again.

JMO

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I think the Globe mentioned that reason a few weeks go. The almost total monopoly position and the chance to at least give the illusion of momentum followed by a quick profit and exit.

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Hi stator,

Would you please explain how you know that many people in the business community are watching this particular issue, and how they feel about the respective parties to it?

Furthermore, could you explain how you've come to know that many people in the business community are "baffled" by the approach of the mainline pilots?

And finally, could you tell us what your affiliation is to this issue.

Thanks,

neo

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Guest Operation Bomberclad

I think Financial Guy and ECB both have good points. The thrust of profitability nowadays is to find the best way of reducing salaries and increasing margins through reduced landing fees, terminal rents, and squeezing out any and all available subsidies. Possibly with stock options in trade.

The Zip L.O.U. is the best way of mass-reduction of F/A's salaries (50%) with little or no opposition. In other job descriptions, they used layoffs. The F/A's are the least likely to be able to defend themselves in a bankrutpcy scenario.

So you can expect the expansion of Zip(or the L.O.U.) onto ever larger A/C types, and to cover larger portions of the domestic market.

How this will affect the regional player is undetermined. But the "Zip" model is the one being played. Expected growth projections are starry-eyed to say the least, and hoping that the pension deficit can be underwritten by growth + body count is a very poor business strategy, though it seems to be the course the mothercorp is taking.

:[

OB

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Guest floatrr

OB, I think you are wrong about Zip. For the very same reasons in Traf's post in the AC thread below. The only way the Zip thing will work ,is if it is merged with Jazz, or Jazz is sold off and Zip expands into Jazz's market. IMHO. Both scenarios are a possibility.

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Guest Max Continuous

>> illusion of momentum followed by a quick profit and exit.<<

... isn't that more of the Gordon Gekco, Wall Street, Cerberus style of investing?

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Guest Operation Bomberclad

Have to disagree, since market segmentation should be advantaged to the regional, where passengers can connect onto any airline regardless.

You have: regional, low-cost domestic, charter, mainline, international. Sure, there is overlapping in several of those areas, but there is virtually no leg to stand on saying that our airline will only work if Jazz operates low cost as well.

There is also a siginficant transborder point to point market which does not include Zip at all, which is the bulk of the regional revenue.

The mothercorp, with all of its advantages have poached off jobs for decades, and they sit in bankruptcy promoting the very same formula, that poaching jobs and preserving social graces with their peers equates with rights. And yet even in monopoly, they decide that taking other people's jobs and running afoul of the very concept of anti-trust makes any sense whatsoever.

I think regional people are hornswoggled by the low cost model, since our portion of the market is obviously larger than the mothercorp allows and should be allowed to fill it out, in the region of about 10% of the market.

50 seat and 70 seat aircraft should be about the limit for us.

If the mothercorp wants to run low cost, well I say let them have at it.

:[

OB

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Stator could be anyone; I know no reason at all to imply who she or he might be. Stator just made some claims in his post that seemed to beg the questions. Any anonymous person here could be management, or a journalist, have a vested interest in the outcome of the topic, or be a completely neutral observer.

Generally, neutral observers and those who are on one side or the other are willing to declare their neutrality or affiliation. Perhaps stator will too, and answer the other questions as well.

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Trinity Time = Victor Li = Husky Energy

The reason Trinity Time wants the deal is so Husky sells fuel to AC. Take a look at what Husky shares have done since AC filed for CCAA (HSE.TSX). I don't know how long it would take Husky to generate an extra $650 million in profit off the deal. Just IMHO.

But as for stator's comments, my opinion is that he is on the right track.

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Weren't you the guy who just suggested he's management? Now you want me to spend time answering his questions?

I'm not averse to answering his questions, but if I'm going to spend the time doing so I'd like to think that my time isn't being wasted. Stator can justify my time by answering the simple questions put to him.

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