AC/ ACPA Tentative Agreement

[Fido]

You might be right Fido but from what I hear domestic is weak besides the Rapidair. EMB full breaks even except for the rapidair. This comes directly for management. You may have better sources.

Which management? The ones that get a chubby thinking of all the new exotic destinations in the International sphere or the ones that know how to read a Route Profitability Report and do so regularly. The ones that can actually understand Route Profitability are few in numbers at AC and few of the few have the power to influence decisions.

[boestar]

I personally think, if AC doesn't do this, WJ will. This would be doing the same damage to AC internationally which it can't afford. The international business is what keeps AC afloat. As for the Jazz TC flying, do we really think Jazz sprung this up without CR knowing, when 95% of Jazz revenue comes from the CPA. Not that stupid. Just my feeling.

The whole thing was discussed with AC before it got off the drawingboard. These guys are not idiots.

[dagger]

Wrong.

Most of the International business loses money (you cannot make money at $600 round trip Vancouver-Hong Kong) and the Domestic is the money maker (due to Westjet playing dead).

Ya, except there are strong routes, too. I'm flying to Germany shortly for almost twice that, and the ticket I bought eight weeks ago would have cost another $300 had I bought it two weeks ago. Even with the charter impact on fares...

[Fido]

... I'm flying to Germany shortly for almost twice that,....

25 years ago $1,000 was considered a good price for Canada-Germany and now you are not even paying $1,200.

That should tell you the story of International profitability.

[inchman]

25 years ago $1,000 was considered a good price for Canada-Germany and now you are not even paying $1,200.

That should tell you the story of International profitability.

A lot of things have changed in 25 years. To compare today to 25 years ago in any business model is folly.

Airplanes burn a lot less fuel.

Load factors are higher due to better computer modeling.

Seat pitch is tighter.

Interest/lease rates are substantially lower. It probably costs less to lease a 777 today than a 727 25 years ago.

Crews make a little more money.

The best thing about international is that it's more difficult for the lowball and fail carriers to enter the market, so prices are more stable.

Using your analogy, domestic profitability should suck, too.... Oh yeah... it does.

[Fido]

A lot of things have changed in 25 years. To compare today to 25 years ago in any business model is folly.

Airplanes burn a lot less fuel.

Load factors are higher due to better computer modeling.

Seat pitch is tighter.

Interest/lease rates are substantially lower. It probably costs less to lease a 777 today than a 727 25 years ago.

Crews make a little more money.

The best thing about international is that it's more difficult for the lowball and fail carriers to enter the market, so prices are more stable.

Using your analogy, domestic profitability should suck, too.... Oh yeah... it does.

Nah Inchman:

Domestic profitability is likely very good when one considers:

Domestic lower Economy prices YVR-YYZ are generally way above many International longhaul prices.

Westjet flys the same Domestic sectors with the same costs as a 319/320 etc and makes a ton of profit.

Jet Fuel index this week is at 368 versus year 100 in year 2000.

RPM's per gallon in 2000 were 37, today about 49. Compare that against fuel price escalation.

A $1,000 airline ticket in 1985 would cost near $2,000 today due to regular price inflation.

[inchman]

Nah Inchman:

Domestic profitability is likely very good when one considers:

Domestic lower Economy prices YVR-YYZ are generally way above many International longhaul prices.

Have you included fuel surcharges in your research?

Westjet flys the same Domestic sectors with the same costs as a 319/320 etc and makes a ton of profit.

I see WS has just announced yet another change to their accounting policies so we'll see how that affects the bottom line.

Jet Fuel index this week is at 368 versus year 100 in year 2000.

If you're going to talk about comparisons 25 years ago, don't put statistics out there from 10 years ago. But I understand that it can be hard to find statistics from prior to that. I did find jet fuel at $1.43 in 1990 and the CPI has increased 141% since then. That, combined with the Can/US exchange rate at about $1.20 vs .97 today puts the 2011 equivalent cost of fuel from 1990 at $2.50, a price it was trading at within the last 2 months.

RPM's per gallon in 2000 were 37, today about 49. Compare that against fuel price escalation.

Ok... $2.50*49/37 works out to $3.31. Jet fuel on Tuesday was $3.12. So fuel prices in Canada, per RPM, are lower than they were in 1990. And that is with year 2000 RPMs per gallon... what were RPMs per gallon in 1990? With 727's, 737's and DC-9s flying around blowing smoke?

A $1,000 airline ticket in 1985 would cost near $2,000 today due to regular price inflation.

Now you're comparing ticket prices from 1985 with fuel prices from 2000. Why not compare a YYZ-YVR ticket from 1990 to now and a YYZ-LHR ticket 1990 to now, including fuel surcharges?

There's no question that it's a tighter business all around than it was, but I see nothing in your arguments that support your position that international is tougher than domestic.

[spreadsheet]

I see WS has just announced yet another change to their accounting policies so we'll see how that affects the bottom line.

Announced yet another change? You mean the change to IFRS which all publicly traded companies in Canada are now required to comply with?

I'm curious what else is in this list of changes to accounting policy you speak of?

[Flightlevels]

Air Canada will have to do the same accounting now as well. It's much like when Canada went to the metric system...the US didn't follow. The same is true here.

Announced yet another change? You mean the change to IFRS which all publicly traded companies in Canada are now required to comply with?

I'm curious what else is in this list of changes to accounting policy you speak of?

[deicer]

My apologies on interupting the urinary discourse on AC-WS accounting practices, but to get back to the main topic of the thread....

Have heard details of the ACPA agreement, and could this be why the Sales people are so **bleep** at the company because they've been told there's no money in the kitty, so therefore they are at an impass.

With the IAM having their first 'session' later this week, it will be interesting to see what comes out in a week or two.

Hope you're prepared for an interesting summer....

Iceman

[Johnny]

What you are going to see, deicer, is the company taking a serious run at getting the A/C Employees competitive with the competition.

Want to compare; Agents, Ramp and F/A's, between the domestic competition and Air Canada?

It will be an entertaining summer.

[deicer]

You forgot to mention Maintenance in that as well. With their jobs being eliminated and the work being sent offshore, they should be looking forward to lots of fun as well

[Johnny]

I completely agree, that one will be a huge issue. We know the company is planning to try and get all the heavy maintenance offshore.

I am not alone is saying, it scares the hell out of me.

[deicer]

Planning to get the heavy mtc offshore? Methinks the planning stage is over. They're already sending aircraft all over the place.

[Johnny]

...wait for it.

There is lots more to come.

[conehead]

Another 767 ferried to South America yesterday for a Heavy Maintenance check...

[CanadaEH]

Pulled this from another forum:

Subject:Unofficial details for Air Canada Pilots Tentative Collective Agreement

Greetings my kind readers,

I hope you are all well.

Here are some general details regarding the pilots contract.

This is not official. Just general info I have been made aware of.

The pilots have been negotiating since Oct. 4, 2010. Their executive is about to accept a tentative collective agreement.

The pilots membership will have to vote on April 15th, 2011, to either accept or reject this new contract proposal.

Their executive (12 individuals) will have two full weeks to review this new contract proposal. But, the pilot membership will have a few days before they get to vote. There are around 3000 AC pilots.

Here is some general details, and once again, this is not officially released information.

AC Pilots Tentative Collective Agreement:

Wage increase of 20% over 5 years. (It is not clear if this is a straight pay increase of 4% a year for 5 years. This 20% may include some Training Bonuses and other Bonuses. So, a mix of a wage increase and maybe some performance bonuses.)

Increase of pay for Embrear Captains and lowering of pay for Boeing 777 first officers. They are switching to a strandardized formula, so pilots will be paid for the type of aircraft. Currently, pilots get higher pay depending on the weight and speed of the aircraft. The heavier and faster the plane, the higher the pay

Reducing the amount of pilots on reserve. They will have the option to Volunteer Extension to 100 hours. (For those Flight Attendants who want Volunteer Extension to go to Reserve first before Blockholders, you now have an idea of what AC thinks about that.)

Create a low-cost leisure airline. AC Pilots would fly it, but it would most likely include a lower wage scale.

Newly hired pilots would receive a Defined Contribution pension plan. Current pilots would stay on the current Defined Benefit plan.

Defined Benefit Pension Plan (D.B.P.): You are guaranteed the amount you receive on a monthly basis from the company once you retire. The liability and risks are on the company.

Defined Contribution Pension Plan (D.C.P.): What you pay in your pension plan while working is a set amount. But, the amount you receive once you retire depends on market conditions. So, if the market goes down when you retire, you would take the hit, and get less money every month. If the market is doing well, then you get more money. The company is no longer liable for market conditions.

In next few weeks, I will be writing some more emails with my colorful commentary as always.

And, if I was a pilot and if it is true that AC wants new employees to be on a Defined Contribution Pension Plan, I would vote: NO.

Here are two things to think about having new employees on a Defined Contributjon Plan:

1) Is top management switching to a Defined Contribution Pension Plan? If no, then why not? Our D.B.P. is the only benefit we have in common with upper management.

2) Over the course of years, newly hired employees on a D.C.P. will outnumber employees on a D.B.P. Therefore employees on a D.B.P. are at risk of losing their type of pension plan all together.

[Homerun]

Deicer, that's pretty impressive that you and other know the details of the pilots TA because the pilots don't know yet. The negotiating committee was presenting the TA yesterday to the union exec. Nothing has been released to the pilot group, especially any numbers.

[deicer]

Morning Homerun

You should be aware by now, in this industry, the last place you hear things from is the 'Official Channels'

HAGD

Iceman

[Kip Powick]

Deicer, that's pretty impressive that you and other know the details of the pilots TA because the pilots don't know yet. The negotiating committee was presenting the TA yesterday to the union exec. Nothing has been released to the pilot group, especially any numbers.

You didn't get the letter sent out by BW in late March?

You haven't looked at the forum on AVCanada?

Surely you frequent that very private?? forum run by ACPA.....you must be slipping

[Homerun]

Kip, I'm aware of some general concepts, but there has been zero details released.

[Homerun]

Deicer, I've got some actual details for you.

5%,3,2,2 for a 4 year deal

There are also some other inreases but they are related to productivity/scheduling/training changes.

DC pension for newhires.

[Leading Edge]

Deicer, I've got some actual details for you.

5%,3,2,2 for a 4 year deal

There are also some other inreases but they are related to productivity/scheduling/training changes.

DC pension for newhires.

Actually its 2-2-2-2 with some sort of performance bonus. Its a concessionary contract once you get into the details...

[Kip Powick]

The Air Canada Pilots Association's master executive council has authorized an April 15-27 ratification vote for a tentative labour pact reached last month.

ACPA MEC has sent out the TA but refuses to recommend, one way or the other, how the pilots should vote.....The forums (private) are hot and heavy with discussions for "Yay" and Nay"...should be interesting

ACPA is the first of the airline's unions to agree to new terms

Very misleading statement................ACPA has not voted so how can the author state that the ACPA, (the AC pilots), have agreed to the the new terms??

[Homerun]

They haven't reccomended acceptance. They are going to let the pilots decide.

Lot's of discussion on the forums all right, although I'm yet to see anyone on the yay side.