Porter airlines versus Jazz

[mrlupin]

I was pondering about the Air Canada and Jazz agreement and some thoughts crossed my mind...

Would it be possible for AC to use Porter in the future in the same way as it uses Jazz? I don't know or claim to have any insight on this but since Air Canada requires an operator to operate flight between certain smaller cities and Porter offers an Aircraft type that could probably be an interesting alternative to what Jazz offers, would it be possible to see a Porter aircraft sporting the maple leaf and operating for AC instead of Porter?

Would Porter's cost be lower the Jazz?

Éric

[boestar]

Jazz is under contract with AC until 2015. If you listen to Bean there won't be anything to worry about because Porter will go under long before that....

[Vsplat]

2015? I thought sooner than that.....

[DEFCON]

Never mind Jazz, it'll be interesting to see what the landscape looks like after AC cancels the Rapidair program.

[AIP]

Never mind Jazz, it'll be interesting to see what the landscape looks like after AC cancels the Rapidair program.

Yeah, thats going to happen.

[AIP]

2015? I thought sooner than that.....

Isn't the CPA up in 2008 ??

[boestar]

rate renegotiations are every 3 years until 2015. Then the whole thing is up for grabs.

[Homerun]

AC can reduce the current level of Jazz flying by approx. 20%. That's it until 2015.

[Thebean]

AC can reduce the current level of Jazz flying by approx. 20%. That's it until 2015.

I bet Comair / Atlantic Southeast / Mesa / Mesaba / ExpressJet all thought the same thing a couple of years ago.

Chapter 11 changed all that for them.

[Buzz2]

are you really trying to suggest that

[DEFCON]

Of course he is. It’s a nasty situation but, the collective expiration of the AC family CA’s is soon coming to a theatre near you. At the same time, the N. American & global economies are showing signs of stress as they become ever more fragile. Is another round of concessionary bargaining heading our way? Was it an accident or an act of pure planning brilliance?

If I was a betting man I’d suggest; AC will go TU and drag Jazz in with itself (again). The re-emerging “newer new” AC will have acquired a majority interest in Jazz along the road to recovery. Jazz will be renamed and new financial instruments issued (again).

The Law appears to allow corporations the luxury of playing a shell game that consistently provides enormous benefits to the few while bringing despair and ruin to the susceptible minions. It’s all quite amazing; the “officers” of a corporation can drive the ship on the rocks and be rewarded handsomely for doing so? That’s some kind of lesson in accepting responsibility for ones actions!

[rudder]

I bet Comair / Atlantic Southeast / Mesa / Mesaba / ExpressJet all thought the same thing a couple of  years ago.

Chapter 11 changed all that for them.

Actually its closer to 16%.

Anybody here believe that the new owners of ACE (meaning the former AC creditors) are willing to write off their stake in AC thru another CCAA filing just to be able to legally abbrogate the CPA with Jazz? Not going to happen.

Here is a thought. Why don't the pilots collectively get their act together in 2009 and come up with something that precludes the possible re-filing for CCAA and protects everybody's careers? Also, probably not going to happen.

[DEFCON]

"Anybody here believe that the new owners of ACE (meaning the former AC creditors) are willing to write off their stake in AC thru another CCAA filing just to be able to legally abbrogate the CPA with Jazz? Not going to happen."

I wasn't suggesting that sort of concept?

[Thebean]

are you really trying to suggest that

I wasn't suggesting that anyone in particular is headed towards Chapter 11.

The inference was simply that nothing, and I mean nothing, is carved in stone for legacy carriers, and those who do contract flying for legacy carriers in North America.

Morgan Stanley put out a lengthy report a few days back where they ranked US carriers as to the liklihood of a Chapter 11 filing.

Their take was as follows, ranked from most to least likely.

1. U.S. Airways

2. Northwest Airlines

3. United Airlines

4. American Airlines

5. JetBlue

6. Continental

7. AirTran

8. Delta Air Lines

9. Alaska Air Group, Inc

10. Southwest Airlines

Compare this list to the list airlines sitting on the most / least cash given their monthly expenses.

19. ExpressJet .86 months cash - announced a 30% cut back of branded flying

18. Jazz .98

17. Hawaiian 1.1

16. Republic 1.5

15. Air Canada 1.5

14. Delta 1.6

13. Air Tran 1.7

12. United 1.7

11. US Airways 2.1

10. Continental 2.1

9. Industry weighted avg 2.2

8. Skywest 2.3

7. AMR 2.3

6. jetBlue 2.8

5. Northwest 3.0

4. Alaska 3.1

3. Southwest 4.4

2. WestJet 4.6

1. Allegiant 4.9 months cash

Anyone doing any contract flying for a carrier headed towards or in Chapter 11 will most certainly receive a haircut, short back and sides, as well as a close shave.

[CanadaEH]

Interesting numbers...

[tsgas]

Interesting Times

[Rookie]

Here is a thought. Why don't the pilots collectively get their act together in 2009 and come up with something that precludes the possible re-filing for CCAA and protects everybody's careers? Also, probably not going to happen.

I think putting the future of AC on the backs of the pilots is a pretty bold proposition.

[DEFCON]

"I think putting the future of AC on the backs of the pilots is a pretty bold proposition."

The unfortunate reality; AC's been doing exactly that for the last two decades.

[Rookie]

There is a difference from the company saying the pilot's will sink AC, and someone saying the pilots can SAVE AC.

Judging by the grafitti I see written into the dirt on the aircraft as I do my walk around, some of the other unions are more militant than ACPA.

[rudder]

The inference was "...the pilots collectively.." and was meant to convey a broader spectrum than just the mainline pilots.

[mrlupin]

There is a difference from the company saying the pilot's will sink AC, and someone saying the pilots can SAVE AC.

Judging by the grafitti I see written into the dirt on the aircraft as I do my walk around, some of the other unions are more militant than ACPA.

Rookie,

The other unions just make noise..... they won't act.

-If the IAM decides to strike (ACTS) Air Canada might have 3-5 checks that will be late out the door and it will probably have to find an alternative parts source for rotables.

-If Aeroplan goes on strike.... well... who cares really... the impact should be quite small.

-We still don't know what structure ACM will be under (and the union leadership still hasn't accepted the fact the ACTS has been sold) but if we are grouped with station again, maintenance will not be represented in large enough numbers for any significant action to be carried out. Station will decide what happens.If we are on our own well allot needs to be organized.... the structure isn't yet in place so let alone a plan of some sort.

-If ACGHS is a separate unit, well it might have some clout but again... It's a dangerous slope. If AC goes to an arbitrator and salaries are compared with Canadian competitors, ACGHS services might see an arbitrator who isn't very sympathetic to their cause.

The significant unions are (in my eyes)ACPA, the flight attendants as well as airport staff (ticketing and such). The other groups seem to have organization/vision problems.

Éric

[mrlupin]

So back to topic....

Does Jazz have an exclusivity agreement with Air Canada? Can AC shop around for alternative sources of flying or are the rates with Jazz the only thing that can be changed?

If Porter is still around and if it can operate a turbo prop aircraft with 70 seats at a cheaper cost then Jazz why wouldn't AC consider them as an alternative? That seems to be the sort of market base system Dagger has been promoting.... No one gets exclusivity....you offer a better price and get the business....

Is Air Canada locked in with Jazz? Boestar, what can be negotiated every three years, strictly money issues?

Éric

[boestar]

Every 3 yeaqrs the rates that Jazz charges for the capacity are renegotiated. The contract is in place until 2015 at which time it is up for grabs if there is someone who can meet the schedule and capacity.

[rudder]

So back to topic....

Does Jazz have an exclusivity agreement with Air Canada? Can AC shop around for alternative sources of flying or are the rates with Jazz the only thing that can be changed?

If Porter is still around and if it can operate a turbo prop aircraft with 70 seats at a cheaper cost then Jazz why wouldn't AC consider them as an alternative? That seems to be the sort of market base system Dagger has been promoting.... No one gets exclusivity....you offer a better price and get the business....

Is Air Canada locked in with Jazz? Boestar, what can be negotiated every three years, strictly money issues?

Éric

Is there an exclusivity provision for Jazz in the CPA with AC? No

Is AC locked in with Jazz? Yes - til the end of 2015 it is 133 aircraft with set minimum utilisation levels.

What happens every 3 years? Rate setting negotiations on controllable cost base at Jazz.

As far as Porter is concerned, AC went out of its way to quash its own operations (thru Jazz) at the island so I do not see how it would now have an epiphany and decide to enter into an agreement to buy 100% of somebody elses's lift that dilutes AC's own lift at LBPIA.

[DEFCON]

"As far as Porter is concerned, AC went out of its way to quash its own operations (thru Jazz) at the island so I do not see how it would now have an epiphany and decide to enter into an agreement to buy 100% of somebody elses's lift that dilutes AC's own lift at LBPIA."

Going out of its way to "quash its own operations" at YTZ was an "epiphany" of the AC kind. Other's would call it a brain fart or failure. Business is business and when Porter captures the lions share of the triangle traffic, AC will almost certainly be there seeking to buy it back at some great cost. It's just always been the AC way.