dagger Posted March 19, 2004 Share Posted March 19, 2004 I'm in hysterics at all the people who expect some sort of divine (or government) intervention to save AC and the unions). In 1998, ACPA went on strike at the busiest time of the year. The dispute lasted two weeks and there was no threat of Parliamentary intervention meaning it could have dragged on much longer. CN Rail was on strike for two weeks and not a finger was raised in Ottawa to order employees back to work. Again, this strike could have gone on a lot longer, and keep in mind that CN has what are known as captive customers - factories and farmers along its lines who can only deal with one railway. The vast majority of Air Canada passengers have alternatives, domestic or foreign. It won't be pretty for a while, but like the PATCO strike in the US, the world will survive and gradually return to normal in a union-free airline industry. Politically, there is as much risk if not more for the Liberals in supporting a bankrupt airline. What's next? Bailing out Stelco? No, this either gets settled here, or it doesn't get settled at all... No other investor is coming forward with a sweeter deal. Oil prices are way up from a year ago. Any other investor will want just as much if not more in the way of concessions. Link to comment Share on other sites More sharing options...
Guest Starman Posted March 19, 2004 Share Posted March 19, 2004 I agree with you, and I've been living in "Cloud Cuckoo Land" my whole career it would seem. If there is no resolution, I think my next job will be overseas... Link to comment Share on other sites More sharing options...
Leading Edge Posted March 19, 2004 Share Posted March 19, 2004 Dagger, How come ACPA was forced into arbitration in 2000? Could it have something to do with he takeover of Canadian in that year? The Gov't would not allow the transportation system to be shut down then, what has changed? WJ can not even come close to providing the capacity needed. Don't forget about the loss of all the advance booking deposits with AC (300-500 Million). AC shutting down is big, bigger than anything ever in history of Canada. The transportation system would be in CHAOS. Nav Canada, and the GTAA would go broke, plus almost all of the suppliers would be deep trouble. How big a drop will this be on the TSE, and are you ready? Link to comment Share on other sites More sharing options...
dagger Posted March 19, 2004 Author Share Posted March 19, 2004 There won't even be a burp on the TSE. Air Transat and WJ stock will rise sharply. GTAA and the airport authorities aren't publicly traded stocks. CARA just was taken private. There will be indirect hits, but the world will recover. You really exaggerate Air Canada's importance to the country. By the way, if Navcda and some of the bloated airport bureaucracies filed for CCAA, that wouldn't be bad either. The banks will take a big hit - cry me a river. However we may then see a reduction in fees. Link to comment Share on other sites More sharing options...
Guest directlaw Posted March 19, 2004 Share Posted March 19, 2004 Air Canada moves 60-70,000 people a day at a load factor of about 72% on average. That is about 45,000 people a day that will need a ride. Yes the world will survive Air Canada's failure but our recovering economy is going to take a big hit. One idea that has not crept into this discussion is the possibility that the government could legislate changes to the CCAA. In Canada collective agreements are still in full force while in CCAA. In the US this is not the case at all. If it appears, to the government, that TTI is going to walk over union intransigence I would not be surprised to see them take action to void the collective agreements at Air Canada. Link to comment Share on other sites More sharing options...
Guest Operation Bomberclad Posted March 19, 2004 Share Posted March 19, 2004 I wish to ask, is everyone still singing "I Like Chinese?" If Li walks, and takes his investment banking rabble with him, then UBS or Cerberus(sp?) will probably jump in with similar demands and effect further concessions. The only difference being that there will be a complete management change, which is probably a more desireable situation. If ACPA manages to chase off Li & Cronies but bends to the wishes of another investor, then I will never ever diss them out ever again. I promise. The hooplah in the press and especially in the Factional Boast is an attempt to protect WJA.TO from tanking below its 200 day moving average. Could be we will see a sudden change in foreign investment rules. Dagger, polish up them coke bottle glasses, they're gettin' fogged up! :[ OB Link to comment Share on other sites More sharing options...
Guest George Posted March 19, 2004 Share Posted March 19, 2004 Air Canada moves 60-70,000 people a day at a load factor of about 72% on average. That is about 45,000 people a day that will need a ride. What math class did this come from? If AC has about 60,000 to 70,000 guests a day then they have 60,000 to 70,000 guests a day, the load factor doesn't have anything to do with it. If you were suggesting that AC has about 60,000 to 70,000 guest per day, with a 70% load factor then they fly about 95,000 seats/day.... Link to comment Share on other sites More sharing options...
Guest directlaw Posted March 19, 2004 Share Posted March 19, 2004 OB Do you really think there is a possibility that the Air Canada unions will allow TTI to walk over saving pensions for those that are not even hired yet? All the other suitors were vulture funds. TTI is the best deal going for the Air Canada employees and they now it....despite what they say in the press. The unions intransigence is posturing only. TTI knows that to make them bend it will take an immense amount of pressure. As we can see by the posts that pressure is working. At the 11th hour whenever that is they will be negotiating with TTI. They will have no choice. Link to comment Share on other sites More sharing options...
dagger Posted March 19, 2004 Author Share Posted March 19, 2004 First, the industry is not operating at full capacity. You can't convince me that every seat on WJ, Jetsgo and Canjet is occupied, and that WJ, Jetsgo and Canjet couldn't squeeze a few more flights out of their fleets and workforces. Also, I was in Australia in 1989 when all of the country's commercial pilots - ALL!!! - went on an illegal strike. The Oz government allowed foreign airlines the temporary right to fly domestic tag-ends to international flights. So our federal government could grant foreign airlines temporary rights, whether it is as a wetlease to Canadian operators or not. Canadians might even like the new options, which is something for the current Canadian operators to consider - there might be a lot of pressure for unilateral granting of cabotage rights, which all Canadian carriers oppose. Anything Air Canada does internationally, foreign airlines can do directly or via US hubs so most people would get to where they want to go, or, in the case of some foreign tourists, they would go elsewhere. That would suçk for the hotel and restaurants (again), but it would be cheaper in the long run to provide them with a little financial help than to subsidize AC. Gradually, over a year or so, the problems would resolve themselves. There would be a permanent job loss to the industry because most of that portion of flying done by AC on the transborder and intercon routes would be captured by foreign airlines. That's thousands of jobs that won't be made up at other Canadian airlines. If any kind of limited cabotage is allowed on a unilateral basis, it will further kill the job prospects for former AC employees. The unions are in a lose-lose. They may feel that if they bow now it will have a negative impact on their ability to withstand demands for DC pension plans in other industries. But if a company as large as AC folds, it makes the unthinkable thinkable in a lot of other industries. Stelco is in bankruptcy protection and the Steelworkers union is all militant about avoiding concessions, in part because they have deluded themselves into thinking Stelco could never be liquidated. Well, if 30,000 Air Canada employees are thrown onto the scrap heap, it can surely happen to Stelco in Hamilton (the Nanticoke operation is much newer, and would survive). The CEP is negotiating a pattern contract for eastern pulp and paper mills amid a weak industry environment. Abitibi isn't so healthy, and the Canadian dollar's rapid rise has kicked the crap out of earnings. Abitibi is another big legacy company that could go bust if it has a long strike or signs a bad labor deal. If AC goes under, Abitibi workers will realize it can happen to their jobs, too. Some of Abitibi's mills are modern, but others are marginal. Thousands of jobs would be lost. So I don't envy the unions but they've been very adept at painting themselves into a corner here. Link to comment Share on other sites More sharing options...
zipped Posted March 19, 2004 Share Posted March 19, 2004 It sounds like all you want is for the airline to survive at any cost just so you can keep accruing your aeroplan points. Employees have done all they can do, if Trinity can't make it work than P*ss Off. There will be other investors. Link to comment Share on other sites More sharing options...
Guest directlaw Posted March 19, 2004 Share Posted March 19, 2004 What the hell was I thinking! Link to comment Share on other sites More sharing options...
Mitch Cronin Posted March 19, 2004 Share Posted March 19, 2004 I think "the 11th hour" is upon us... in fact, I reckon it's about 23:45 or so... You guys that are singin' the "oh that'll never happen" song are startin' t'scare me. Link to comment Share on other sites More sharing options...
Guest Boarding Card Posted March 19, 2004 Share Posted March 19, 2004 Reminds me of the time Mulrohney stood up on camera and tore up the YYT Accord, saying Canada would seise to exist..(or something to that effect.. never listened to what he ever had to say anyway) but you know what, the next day the sun shone down on Canada. Canada still exists... so to will AC.. in one way or another. Link to comment Share on other sites More sharing options...
dagger Posted March 19, 2004 Author Share Posted March 19, 2004 The real risk here is that this is all part of a process called CCAA, which is inextricably linked to GECAS DIP financing... Farley can't keep the process going forever. At some point, under law, the creditors have a right to sue for liquidation, the argument being that the more AC spends GECAS money, the less is left for the creditors. In fact, I would argue that the longer this goes on, the greater the likelihood of additional concessions over and above the DC pension for new hires. The uncertainty over AC's future will cost it bookings, and that in turn could start the self-fulfilling prophesy called liquidation. I don't even take it as a given that the process will be extended to allow for a new investor, and I have no belief that a new investor will come to this process that the creditors can view favorably. I wouldn't say it's TTI or bust since I am not a bankruptcy lawyer, but I think there is a good chance of it playing out that way. Link to comment Share on other sites More sharing options...
Guest directlaw Posted March 19, 2004 Share Posted March 19, 2004 Mitch, It is not even noon yet. This is going to get a lot hotter yet. Mitch don't get me wrong I think this should already be settled. Why are the employees of a bankrupt airline trying to protect those that are not even hired? It defies logic. The answer.....the unions are afraid this will open the flood gates for pension change at other companies. But honestly Mitch do you really believe that the unions will allow Air Canada to collapse over pension change for those that are not even hired yet? Link to comment Share on other sites More sharing options...
Guest bcpilot Posted March 19, 2004 Share Posted March 19, 2004 Who are these other investors? Do you think they will be easier to deal with than Trinity? Link to comment Share on other sites More sharing options...
Guest ECB Posted March 19, 2004 Share Posted March 19, 2004 I don't often agree with Dagger but your dead on with this one. I think it's very dangerous and a symptom of the vestiges of the "can't touch that" civil service attitude lingering amoung the higher senority numbers at Air Canada. That some feel that Canada would not allow the airline to fold. I actually used to think that too but I doubt an AC bailout is a precedent this new administration wants to set. Covering Air Canada would place a tremendous strain on WestJet and others with the risk of creating a major deviation from a well thought out and scripted business plan. I also agree it would be difficult for WJ, AT, SG and others to get back transborder and International traffic once taken by well run (at least a few) American and other carriers. Basically, Air Canada is easier pickings. The devil you know sort of thing (reminds me of AC vs CP). Link to comment Share on other sites More sharing options...
dagger Posted March 19, 2004 Author Share Posted March 19, 2004 And don't underestimate my contention that unilateral cabotage could well become entrenched. This is not the panacea for the surviving carriers that some would think. It would be short term gain, possibly followed by the arrival of slick operators like Richard Branson who enjoy economies of scale and can link an international operation with a new domestic venture that will be alluringly packaged. Link to comment Share on other sites More sharing options...
wrench Posted March 19, 2004 Share Posted March 19, 2004 guess we all better back off because zipped seems to be the expert of the day in this field. Solution: Doesn't matter what, just tell them to P**S off and Poof....there will be another investor scrambling to take Trinity's spot.......what a guy! Link to comment Share on other sites More sharing options...
Mitch Cronin Posted March 19, 2004 Share Posted March 19, 2004 Now that's a BINGO! Don't ever think this country wouldn't allow that to happen either! Look at our disgusting history with protecting anything related to aviation in Canada! No sir, we'll guard our 200 mile fishing limits, with the whole fleet of rusted old tubs if necessary... We'll protect our right to be the most wacky nation on earth with all 37 guns we own, and put our soldiers in jungle camoflage in the middle of a desert, ... but if you want us to destroy any part of Canadian Aviation, just say the word... cut 'em up boys... there never was an Arrow! You're right on the money Dagger... Branson won't be the worst of our worries. Come one, come all.... Link to comment Share on other sites More sharing options...
dagger Posted March 19, 2004 Author Share Posted March 19, 2004 Yes, this is all about my Aeroplan points which I am using at a rate of about one free trip every five or six years. Then again, I also have a lot of Air Miles. However, I would expect Aeroplan to have a fighting chance to survive an AC liquidation. There would be a buyer for that, and I could well emerge with my points intact. That's about the least of my worries. It should be pretty low down on your priority list, too, By the way, they said Eatons couldn't fold either. Link to comment Share on other sites More sharing options...
Mitch Cronin Posted March 19, 2004 Share Posted March 19, 2004 The objections I'm hearing don't see it that way... first, they don't see it as only a change to new-hires... it seems to be common thought that even the choices permitted won't allow continuance, exactly as is... and the added possibility for those new-hires to, one day in the future, simply vote to change all that is... Plus the change to 60 from 55... though I don't know how the hell we'd know any of that's the case without even sitting at a table and talking? And secondly... they don't seem to think it's the end... an investor waiting in the wings?... Victor "tire kicker" (is that what the TK stands for?) Li is bluffing? The government?... I don't know...? Hell, some even think it's better to let the liquidation happen, if preventing it costs that much (however they know just what "that much" is, again, I have no idea...?) But that's one segment of those I hear from... there is another segment saying exactly what I'm saying... let's talk this out!... I have no idea who outnumbers who... Link to comment Share on other sites More sharing options...
Airband Posted March 19, 2004 Share Posted March 19, 2004 It can and they will. "At 1100 hours, 20 February 1959, John Diefenbaker announced that the CF-105 was to be cancelled. On the same day, Avro was instructed to immediately halt all work on the CF-105. That included the completion of the first Mk.2 prototypes, which were nearly complete. Employees were sent home, and were told that Avro could not guarantee them a job in the future. Indeed, about 14,000 were fired." FYI - population of Canada in 1959 - 17.52M Link to comment Share on other sites More sharing options...
Leading Edge Posted March 19, 2004 Share Posted March 19, 2004 "Gradually, over a year or so, the problems would resolve themselves" Yeah, it'll take a year if not longer, in the meantime we have a Federal Election. Do you honestly think that the Feds will allow this with an election looming, and the quebec scandal - no way. Politics is about votes, not money. You honestly think that the Feds want to be seen as union busting, and not to mention the pension. I'll put one retired AC person on Capitol Hill and your dead in the water. Imagine if 30,000 + all the retiree's show up, and it will happen... This is 100,000 plus votes. Link to comment Share on other sites More sharing options...
dagger Posted March 19, 2004 Author Share Posted March 19, 2004 You overestimate how many people would be aggrieved by an AC liquidation and how many would be aggrieved by an AC bailout. Martin's handling of the Quebec scandal is actually playing out best in Quebec because a lot of people there witnessed more of it first hand. Face it, this isn't 1960 and AC isn't an indispensible Crown Corporation. Even two years ago, it might have been different, but you have three discount airlines in full growth mode today. It just wouldn't have quite the same impact. Link to comment Share on other sites More sharing options...
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