global solution

[Guest floatrrr]

Under who's Op certificate would you fly? All those route require bilateral negotiations & approvals - good luck when the flag carrier already serves them. Where will you get your slots and the money to buy them? Just who will provide the capital in such a competitive market? And who will provide the aircraft and the training?

Lastly without mainline feed just how long would you last?

And why would the shareholders of AC Mainline allow such a thing???

This is the problem with Pilots, no business sense, personal or otherwise... the concept of disposing of one unit is at best a joke.

Thanks for taking the bait, you have illustrated why such an idea is preposterous for both sides, the regionals will never get the mainline equip and vice versa. So we have a choice don't we... We can co-operate and improve all of our working conditions, or we can facilitate the decline of our so called profession.

Now I get it. What you said in your original post was intended to bait the pilots. That's funny, what I said in my reply was intended to P155 you off! What a bunch of nonsense really. It's true pilots have little or no business sense, and that is why they will successfully drive each others wages down in 09'. Any specs as to what the bonuses will be post contract negot's for the mandarins out east?

[Johnny]

I say cut Jazz loose, give them exactly what they want. Let them compete in the market place with whatever... AC can cancel the feed agreement and start up a really low cost feeder. Who needs a DH8 Capt making 100k+ anyway. Oh, and they could even pay for their own fuel, that would do wonders for the mainlines bottom line... 

Ya... you are absolutely right, 100K / year is way to little for a Captain on a Dash 8!

You can make that selling cars or being a ramp rat in Toronto, not to mention what Air Traffic Control pays now.

....a job with zero (pre-hire) requirements!

[Leading Edge]

"Under who's Op certificate would you fly? All those route require bilateral negotiations & approvals - good luck when the flag carrier already serves them. Where will you get your slots and the money to buy them? Just who will provide the capital in such a competitive market? And who will provide the aircraft and the training?"

The same type of people that have money to burn through their support of ANY & ALL airlines?

"Lastly without mainline feed just how long would you last?"

As long as mainline without feed?

"And why would the shareholders of AC Mainline allow such a thing???"

The sale would equate to money in pocket?

"This is the problem with Pilots, no business sense, personal or otherwise"

Mostly correct IMO.

"... the concept of disposing of one unit is at best a joke."

why?

"Thanks for taking the bait, you have illustrated why such an idea is preposterous for both sides, the regionals will never get the mainline equip and vice versa."

Bait?

"So we have a choice don't we... We can co-operate and improve all of our working conditions, or we can facilitate the decline of our so called profession."

The "Vegas Bookies" will be taking bets at 20 - 1 against pilot cooperation.

There is no sale, Jazz is already sold, and any additional transfer of revenue generating flying to Jazz only diminishes Mainline share price - who now have seperate shareholders with their own agenda, one that may prove to your disliking.

Just because you think it makes sense, I can assure you that it does not make business sense for the rest of the units. The problem is, you over estimate your importance; and cost, to operation - typical of a Pilot.

Training costs associated with the transfer of a 60 aircraft fleet are huge, far more than your wages will ever make up. You are scoped by the economic reality of fleet size, and it will not change.

Jazz needs the mainline and vice versa, so we are if you like, a shotgun wedding. As I said, it can be profitable for both sides or your living standards can continue to decline - its your choice, be smart about it.

LE

[RussD]

Training costs associated with the transfer of a 60 aircraft fleet are huge, far more than your wages will ever make up. You are scoped by the economic reality of fleet size, and it will not change.

Jazz needs the mainline and vice versa, so we are if you like, a shotgun wedding. As I said, it can be profitable for both sides or your living standards can continue to decline - its your choice, be smart about it.

LE

Seems to me LE U are the one who is gleefully poking the stick. Having said that,,, I agree the ERJ's will be mainline as long as AC keeps them in their inventory. You may be looking the wrong way tho to see the threat(to ACPA). Remember to look both ways when you choose (yet again) to abandon the unity street.

[Homerun]

The fact is that AC owns 0% of Jazz. The only relationship between the 2 is contractual, that being the CPA. The cost of the CPA to AC is approx 30-40% higher than the going rate in the USA for similar agreements. It was set up this way by ACE in order to float Jazz as an income trust. The net result is a reduction of AC's bottom line in favour of Jazz's unitholders. To think that AC will want to increase this agreement to larger a/c types is pure fantasy. In fact, in the near future when ACE no longer has a controlling interest in AC, I predict that AC will be looking for changes to the CPA to bring it more in line with actual market prices.

Then there is the issue with the ACPA scope clause. Contrary to what some on this board seem to believe, it is still the same as it was in 2003 and Jazz is rapidly approaching the ASM ratio restriction that it contains. The current Jazz fleet was forced through as an exception to the scope clause during CCAA, and I think everyone remembers the history on that one.

Unless Jazz contracts with another carrier to operate larger aircraft on their behalf (unlikely given Jazz's cost structure), then larger aircraft will not be arriving at Jazz anytime soon.

imo

[John S.]

. . . .  The cost of the CPA to AC is approx 30-40% higher than the going rate in the USA for similar agreements.  . . . . 

To think that AC will want to increase this agreement to larger a/c types is pure fantasy.  . . .

Jazz is rapidly approaching the ASM ratio restriction that it contains.  . . . .

then larger aircraft will not be arriving at Jazz anytime soon.

imo

Couple of questions and points:

Are you saying that the senior managers at AC arranged the JAZZ CPA to be up to 40% MORE than thay ought to have paid? Just to float a Trust? THAT otta have caught some investment banker's eye.

Next - you say that the thought if increasing the Jazz fleet is fantasy? Don't know who's but I suggest that getting the whole Jazz package of workrules (flexibility) and renumereiation (salary, benenfits) at the mainline WOULD be a senior mainline management fantasy.

Next - does the ASM restriction calculation in your world include the rapidly approaching new Boeings?

Finally - define 'soon'.

[Leading Edge]

Couple of questions and points:

Are you saying that the senior managers at AC arranged the JAZZ CPA to be up to 40% MORE than thay ought to have paid? Just to float a Trust? THAT otta have caught some investment banker's eye.

Next - you say that the thought if increasing the Jazz fleet is fantasy? Don't know who's but I suggest that getting the whole Jazz package of workrules (flexibility) and renumereiation (salary, benenfits) at the mainline WOULD be a senior mainline management fantasy.

Next - does the ASM restriction calculation in your world include the rapidly approaching new Boeings?

Finally - define 'soon'.

Again, another 'Pilot talking' ... Management looks way beyond the cost of the Pilot when factoring overall cost of the operation. I hate to tell you this, but you represent a very small cost when you look at the total cost structure. Jazz Pilots seem to dwell on this ad nauseum. How about I spell it out,

You would have to layoff numerous staff from multiple bargaining groups at the mainline, which would result in industrial action. You would have to reduce management at the mainline. You would have to cancel maintenance contracts with ACTS, Ground services, suppliers, fuellers, and every one else that you can think of. The reduction in operating income would mean a higher CASM for the remaining Aircraft at the mainline. You would have to convince the Shareholders of AC that this is a good idea, highly unlikely.

Jazz would have to get domestic and foreign regulatory approval.

Jazz would have to aquire the aircraft and find the capital to do it.

Jazz would have to hire and train all the equivalent positions that you just removed - huge cost.

Jazz would have to negotiate and purchase the slots involved - a significant cost.

Do you want me to go on?

All this to save what, a few $$ per hour on a Pilot, keep dreamin'

Personally, I think that the window of opportunity for any kind of merger has now passed permanently. Jazz and AC are no longer related, except by a contractural agreement. The only think that the two groups can do here, is come up with an agreement that will protect each other from each other, and allow for the improvement of working conditions for each group.

[Leading Edge]

Maybe if Dagger's floating around, he can shed some light on the anticipated cost advantages that will flow to AC is it uncouples itself from existing high cost internal services. How about it, care to speculate?

[Homerun]

Couple of questions and points:

Are you saying that the senior managers at AC arranged the JAZZ CPA to be up to 40% MORE than thay ought to have paid? Just to float a Trust? THAT otta have caught some investment banker's eye.

Next - you say that the thought if increasing the Jazz fleet is fantasy? Don't know who's but I suggest that getting the whole Jazz package of workrules (flexibility) and renumereiation (salary, benenfits) at the mainline WOULD be a senior mainline management fantasy.

Next - does the ASM restriction calculation in your world include the rapidly approaching new Boeings?

Finally - define 'soon'.

Yes and no. ACE arranged the CPA, not AC. ACE received the proceeds of the Jazz float, not AC. AC just gets stuck with the bill. Now AC has been spun off and shortly ACE will no longer be the majority owner. The only way to sell an income trust is to forecast a lofty yield. Look at Jazz's operating margin, it's not coming from a low CASM. That is why the thing is structured the way it is. Do a little research and compare the costs of the US regionals operating under CPA's with that of Jazz. There is a difference of around 30-40%.

Jazz has a lower cost salary/benefit package than AC and I'm sure AC would love to have it. Problem is there are labour contracts in place, there are labour laws, and AC is not in CCAA. Not going to happen. Jazz may indeed increase their fleet, but it won't be driven by AC. Perhaps they'll sign a deal with a US carrier?

The rapidly approaching new Boeings are all replacement aircraft. There will be a net increase in seating capacity, hence ASM's but overall it will be less than a 5% ASM increase.

Soon as in by 2009.

[DEFCON]

LE

Rather than quoting your many references to pilots and their lack of business sense, may I offer the following for your learned consideration. Please re-read your posts and then ask yourself as a pilot, where do I get the business moxy to make all these claims regarding AC / ACE / Jazz present & future business plans?

[Guest floatrrr]

"Unless Jazz contracts with another carrier to operate larger aircraft on their behalf (unlikely given Jazz's cost structure), then larger aircraft will not be arriving at Jazz anytime soon.

imo"

It's funny how the believers(mostly worker bees and middle management) in this industry always go on what they are told. It's what you are not told you need to worry about , especially from the greedy capitalist ACE BOD.

This helps illustrate how little folks actually know of Jazz's so called cost structure.(yea, yea, I know the fuel is a pass through, and they have to apply for slots and blah,blah, blah, every airline has to pay for this stuff!)

Some simple facts , since management looks way beyond the cost of just pilots. Jazz pilots, have what is called a Status pay System.(same pay regardless of aircraft). I'll let you do the math , wrt savings for the company. Jazz , Incharge earns considerably less than the Mainline counterpart(like about 20 percent on average), the same for the AME's. Jazz's outstation CSA's earn an average of 30 percent less than their mainline counterpart. Do you even want to touch the ground handling costs of mainline for comparison to Jazz's outsourced ground handling at their out stations. (Should we just suffice to say, this ground service should be a sailboat set adrift with no sail and a broken rudder.) So you see, in a nutshell Jazz's overall labour costs are considerably less than that of mainline.

I was fingering through the last JazzUN report and had a look at what Jazz's management costs were. Have a look at what AC's top execs got as bonusses and options for a little contrast. In conclusion, it will be interesting to see what 2009 will bring for all. Sometime in 2008 there will be an anouncement from the ACE BOD. JMO.

No Im not chicken little.

[skyline]

I knew that this thread would stir up some interesting conversations, but what is disturbing is how continually dysfunctional we all are. I know this is a dramatic comparison, but I can’t help to envision a seen where management is picking us out of the cage like in “Deer Hunter” forcing us to play Russian roulette with our contracts. People, please wake up. We only have ourselves to blame in 2009.

ACE will not be taking any prisoners this time around.

[Leading Edge]

"Unless Jazz contracts with another carrier to operate larger aircraft on their behalf (unlikely given Jazz's cost structure), then larger aircraft will not be arriving at Jazz anytime soon.

imo"

It's funny how the believers(mostly worker bees and middle management) in this industry always go on what they are told. It's what you are not told you need to worry about , especially from the greedy capitalist ACE BOD.

This helps illustrate how little folks actually know of Jazz's so called cost structure.(yea, yea, I know the fuel is a pass through, and they have to apply for slots and blah,blah, blah, every airline has to pay for this stuff!)

Some simple facts , since management looks way beyond the cost of just pilots. Jazz pilots, have what is called a Status pay System.(same pay regardless of aircraft). I'll let you do the math , wrt savings for the company. Jazz , Incharge earns considerably less than the Mainline counterpart(like about 20 percent on average), the same for the AME's. Jazz's outstation CSA's earn an average of 30 percent less than their mainline counterpart. Do you even want to touch the ground handling costs of mainline for comparison to Jazz's outsourced ground handling at their out stations. (Should we just suffice to say, this ground service should be a sailboat set adrift with no sail and a broken rudder.) So you see, in a nutshell Jazz's overall labour costs are considerably less than that of mainline.

I was fingering through the last JazzUN report and had a look at what Jazz's management costs were. Have a look at what AC's top execs got as bonusses and options for a little contrast. In conclusion, it will be interesting to see what 2009 will bring for all. Sometime in 2008 there will be an anouncement from the ACE BOD. JMO.

No Im not chicken little.

Who cares what Jazz's cost structure is. Once ACE has spun off Jazz entirely, why would they transfer addtional RVSM's to Jazz? For that matter why would the BOD of ACE allow such a thing, especially when AC is going to be spun off on its own.

Once Jazz was sold, its relationship with ACE and AC forever changed. It is now a contract supplier of services to AC. There is no advantage to transferring RVSM's to Jazz in the future, to do so only increases CASM for the mainline and decreases share price accordingly. If anything, Jazz will shrink once the fuel flow thru stops and the true CASM at Jazz becomes evident.

Defcon, remember, if AC can be undercut so can Jazz. Which one is easier to set up, grow and finance...

My point in all of this, is the idea of undercutting the employees at AC; or Jazz for that matter, in order to poach additional equipment is futile. The flying will not be transferred, it will only be flown at a lower cost if you compete. The costs associated with transferring a large number of aircraft are prohibitive. So, where do we go from here, we can duke it out and enjoy declining living standards or we can co-operate.

[DEFCON]

" So, where do we go from here, we can duke it out and enjoy declining living standards or we can co-operate."

With respect; I believe we will collectively respond to the future by "duking it out". Regardless of ones affiliation, most believe they stand atop the high ground and the others are somehow unjustified in their quest for a better shake. The attitude of entitlement has prevailed for twenty + years now and it doesn't appear to be declining regardless of any particular historical lesson or truth? Therefore and as unfortunate as it is, we will almost certainly beat ourselves into submission once again.

[DEFCON]

LE

Here's another thought.

All propjet ac are sold to tier III. All EMB ac are sold to Jazz.

Correct me if I'm wrong but, I believe the law provides a consequentially affected employee with an option to follow their work?

[CAT3DUAL]

DEFCON, sounds to me your wishing and hoping to be in CCAA again in 2010 so you can make less money then you are now, for the outside chance of flying a larger aircraft. Your logic simply eludes me, but feel free to enlighten the masses how this is good for JAZZ.

[skyline]

Come on people!!! you are still out of focus.

[DEFCON]

"sounds to me your wishing and hoping to be in CCAA again in 2010"

Not at all?

"so you can make less money then you are now, for the outside chance of flying a larger aircraft"

That's not my way of thinking?

"Your logic simply eludes me, but feel free to enlighten the masses how this is good for JAZZ."

I don't recall suggesting this was good, bad, or of zero consequence to Jazz? I think you must have taken my crystal balling out of context?

I suggested the scenario as only one of may possibilities facing pilots. I do however think the idea has some merit when considered purely from a business perspective.

[buzz]

****insert huge yawn here****

[Seeker]

I do however think the idea has some merit when considered purely from a business perspective.

DEFCON;

The EMJ adds greatly to the scheduling possibilities at AC, there are something like 700 pilots trained on it and the passengers love the airplane. Doesn't seem to likely to leave the fleet any time soon. Here's an idea that has merit; get more EMJs and scale back the CPA.

[Leading Edge]

" So, where do we go from here, we can duke it out and enjoy declining living standards or we can co-operate."

With respect; I believe we will collectively respond to the future by "duking it out". Regardless of ones affiliation, most believe they stand atop the high ground and the others are somehow unjustified in their quest for a better shake. The attitude of entitlement has prevailed for twenty + years now and it doesn't appear to be declining regardless of any particular historical lesson or truth? Therefore and as unfortunate as it is, we will almost certainly beat ourselves into submission once again.

Sad as it is, I agree. Its really too bad, for everyone involved.

[Leading Edge]

LE

Here's another thought.

All propjet ac are sold to tier III. All EMB ac are sold to Jazz.

Correct me if I'm wrong but, I believe the law provides a consequentially affected employee with an option to follow their work?

Will never happen, the EMB is too important to AC to let it go. My point in all of this, is that once the two companies were sold. the dynamic changed forever. AC is a publically traded company, and they will not remove a money making aircraft like the EMB from the fleet. Transferring RVSM's to Jazz makes absolutely no sense to ACE when further share issue's of AC are forthcoming.

ACE will cease to exist very shortly (Once the cookie jar has been picked clean) and both companies will exist as purely seperate entities. Even whipsaw between the two bargaining units will not be possible because they will only have a contractural relationship - period. The window of opportunity here has passed, further more, I am wondering if the CPA restricts aircraft size at Jazz, if so, any union blah blah is meaningless.

[DEFCON]

LE

I agree, we don't know what's coming our way in 2009. There are too many variables and consequently, too many possibilities.

[UpperDeck]

If GS is "dead", why then would ACPA form a "representational committee" to explore the mechanisms to ensure adherence to its "democratic principles" within the ALPA structure? Hmmm! The reports of death might be somewhat exaggerated.

Did anyone hold anybody's feet to the fire over the characterization in the recent Newsletter of the AC MEC's impotence within CALPA? Somewhat disingenuous to suggest that the Regionals controlled the Board. As I recall from my reading, together with CAIL, the AC group couuld have brought an abrupt end to the process but the CAIL group said; "You made your own bed; now lie in it". At Convention, AC and CAIL could have changed all the rules using weighted votes. They didn't.

Watch the ALPA President's video clip regarding the America West/US arbitration award. He refuses to favour one group over another despite their threat to leave ALPA. Why would they leave? They don't like the award and want ALPA to ignore it.

Does that sound familiar?

So---if that's the case, what concessions does ACPA expect from ALPA that would keep the group happy over the long-term......veto power?

[DEFCON]

"a "representational committee" to explore the mechanisms to ensure adherence to its "democratic principles" within the ALPA structure"

UD

I'm not certain but, I believe the acpa is looking for a "linkage" agreement with the alpa? IMO, if linkage was achieved acpa would have the best of both worlds. It could employ whatever persuasive approach possible within ALPA so as to keep Jazz down come contract 2009. Should the going get tough, acpa will also have the option to leave town and claim the alpa violated its democratic principles.