Ac Numbers In...

[FA@AC]

What meddling by the govt interfered with AC's ability to do what they wanted? Lest anyone forget, WJ was already in Hamilton and the decision to move over to YYZ had been a foregone conclusion within certain key circles at WJ.

As given the CCAA filing in 2003, which was pretty much a function of high costs and low fares, one could make a pretty strong argument that the gov't saved AC from itself. Tango was so successful it was wound down, as was Zip.

What meddling? Allowing competitors the opportunity to influence what fares AC could charge on what route just for starters. I can't remember AC ever hauling WS before the competition authority to tell WS that it shouldn't be allowed to match AC's fares. If government never meddled, what are you referring to when you suggest that government saved AC from itself?

I can't tell whether you're being sarcastic about Tango being "so successful it was wound down". If you are, you're completely missing the mark. As I see it, Tango was so successful that it became AC's mainline product and was copied by all major US carriers as theirs.

[Thebean]

What meddling? Allowing competitors the opportunity to influence what fares AC could charge on what route just for starters. I can't remember AC ever hauling WS before the competition authority to tell WS that it shouldn't be allowed to match AC's fares. If government never meddled, what are you referring to when you suggest that government saved AC from itself?

I can't tell whether you're being sarcastic about Tango being "so successful it was wound down". If you are, you're completely missing the mark. As I see it, Tango was so successful that it became AC's mainline product and was copied by all major US carriers as theirs.

Perhaps you could provide an example where an outside agency limited AC's ability to charge any particular fare on any particular market contested by WJ? I can't think of any. There were never any orders by any agency to raise fares, lower fares, add or reduce capacity or any such thing.

The big picture was that it made good business sense for all kinds of reasons to take the case to the Bureau, and it also made good business sense for the respondent to fight it. Stalemate? Maybe. But both parties to the adventure got precisely what they wanted out of the experience.

I put it to you that a number of proposed but never implemented ideas caused a debate in various circles that likely resulted in AC having a sober rethink of the matter and ultimately deciding not to bother. I wouldn't be at all surprised if that wasn't precisely what happened on a recently cancelled before it launched Rouge domestic route.

I don't think AC was remotely interested in YHM in 2000, or when ever that was. But it didn't hurt to make lots of noise about it. We all know it's not the first time various airlines have played that sort of card in the media.

As for Tango and Zip, I guess we have to agree to disagree on the spin.

Song doesn't look a whole lot like Delta mainline today, other than they both sold seats on airplanes.

[inchman]

The whole "scorecard" thing is useless. As a matter of fact, given the structure of Westjet, using this measuring stick, they are doing worse against similar airlines in the US than AC is doing against most of its comparators.

As far as comparisons go, Allegiant has a grand total of 1800 employees. They are doing a great job, no doubt. They (and most US airlines) are also operating in a subsidized environment... navigation charges in the States are a fraction of those in Canada and many airports are subsidized. Air Canada operates about 30% of its flights into the most expensive airport in the world in which to land and has a significant number of its passengers scavenged across the border while the US Border Patrol charges huge fees for airport departures from Canada to add to the insult. A family of 4 would be crazy to fly from YYZ to MCO when they could drive across the border to BUF. In a level playing field, AC's (and WJs) load factor would be even higher and yields would be higher.

Airlines based in the US were able to take full advantage of the fuel price decrease. Canadian airlines had 20% of the benefit wiped out by exchange rates (representing an advantage to the US carriers of 6% of operating cost).

The US carriers all shook loose their pension plans (those that had them) and dumped the insane ground handling expenses through their last round of Chapter 11.

The bottom line here is that Air Canada is finally making money on a consistent basis and there is no minus signs in front of the profit figures. That in itself is a great leap. It's kind of like the Leafs getting into the second round of the playoffs. Nobody is expecting them to hold the Cup anytime soon, but if they just get into round 2, that would be great!

Yes, Air Canada's BELF is higher than most, but none of those airlines have the benefit package that AC has, and don't have the operating costs, as I indicated above. And it doesn't matter what your BELF is, as long as you're above it. Air Canada is making money while making past service pension deposits in addition to a very good profit sharing program.

I was (not) amazed yesterday when I heard on the radio that there is a call for Air Canada to cut additional charges because they made money in Q1. Average profit for AC per passenger was about $10. If anything, it is Westjet that is "gouging" the consumer, yet AC is left holding the rebar in the middle of the thunderstorm.

And, no, I wouldn't call going from MINUS 4.3 to PLUS 3.4 going backwards. Westjet's figures improved by 5.6% while AC improved by 7.7%. A full 2.1% more on 3 times the cashflow.

The US carriers did better than this, but, as I said, they get a free 6% over Canadian carriers because they get the full benefit of the fuel price drop. Had that not happened, both AC and WJ would have moved farther up the list.

[FA@AC]

Perhaps you could provide an example where an outside agency limited AC's ability to charge any particular fare on any particular market contested by WJ? I can't think of any. There were never any orders by any agency to raise fares, lower fares, add or reduce capacity or any such thing.

The big picture was that it made good business sense for all kinds of reasons to take the case to the Bureau, and it also made good business sense for the respondent to fight it. Stalemate? Maybe. But both parties to the adventure got precisely what they wanted out of the experience.

I put it to you that a number of proposed but never implemented ideas caused a debate in various circles that likely resulted in AC having a sober rethink of the matter and ultimately deciding not to bother. I wouldn't be at all surprised if that wasn't precisely what happened on a recently cancelled before it launched Rouge domestic route.

I don't think AC was remotely interested in YHM in 2000, or when ever that was. But it didn't hurt to make lots of noise about it. We all know it's not the first time various airlines have played that sort of card in the media.

As for Tango and Zip, I guess we have to agree to disagree on the spin.

Song doesn't look a whole lot like Delta mainline today, other than they both sold seats on airplanes.

Oh, come off it. You know well that WestJet attempted to prevent AC from matching its fares, and you know what else WestJet was up to (though making mention of it here constitutes launching a personal attack according to you) while it was crying to the competition bureau.

Delta's mainline economy product today looks to me exactly like Song. What am I missing?

[Thebean]

I don't recall seeing you at any of the 4 hr noon Monday executive management meetings that I attended from Aug 95 through 2003, (which provides a clue as to which day of the week I spent in Calgary), so please forgive me if my recollections of what was said and the strategies developed within those meetings differs from your guess work and speculation.

You have very little idea what was going on. If you did, you probably wouldn't be so quick to bring it up every time your arguments are stymied by quantitative fact.

It takes two to tango.

[Guest]

regarding AC being forced to purchase Canadian, I believe the following is closer to the truth:

n August 20, 1999, Air Canada proposed a financial offer to Canadian Airlines which would see Canadian's International routes and airport slots sold to Air Canada for an undisclosed amount. Canadian Airlines would be relegated to be a regional carrier providing a feeder network to Air Canada. This offer was rejected.

Four days later, on August 24, 1999, Onex Corporation announced a takeover bid for Air Canada, backed by American Airlines parent company AMR Corporation, consisting of $1.8B in cash and the assumption of $3.9B in debt. Canadian Airlines announced that it would support this and recommend acceptance from its shareholders. Air Canada rejected the offer. On August 31, 1999, Air Canada adopted a poison pill aimed at thwarting any takeover bid.

It was later(Sep 24,1999) revealed by Kevin Benson that merger talks had occurred between Canadian Airlines and Air Canada in early 1999 with Air Canada abandoning the talks.

On October 19, 1999, Air Canada, backed by Star Alliance partners Lufthansa Airlines, United Airlines and CIBC announced a $930M counter bid to the Onex offer. Air Canada offered $92M for Canadian Airlines and committed to running it as a separate company. On November 2, Air Canada increased its offer to $16 per share to buy back 36.4 percent of the airline.

On November 5, 1999, a Quebec judge ruled that the Onex takeover was illegal, breaking the law that stipulates that no more than 10 percent of the company can be controlled by a single shareholder. Onex subsequently withdrew its offer and Air Canada stated it would proceed with the takeover of Canadian Airlines. On December 4, the board of directors at Canadian Airlines recommended the $92M offer from Air Canada to the shareholders. The offer from Air Canada originally expired at 5pm on December 7, 1999, but Air Canada extended their offer until December 23, 1999. Air Canada officially took control of Canadian Airlines, pending government approval, on December 8, 1999. The Federal Competition Bureau cleared the way for the takeover on December 21, 1999 and Canadian Airlines officially became a subsidiary of Air Canada on December 23, 1999.

Canadian Airlines operated as a subsidiary company through most of 2000. In October 2000, all of Canadian Airlines' systems and employees became fully integrated. WIth both companies fully integrated, Air Canada began massive cuts to employees starting with the announcement that there would be 3500 cuts in the workforce on December 22, 2000. September 26, 2001 saw an additional 5000 cuts primarily driven from the worldwide impact to the travel sector caused by the 9/11 attacks.

[acsidestick]

CPAIR, It was ordered by the dishonourable MOT at the time who forced TD Bank out of the room under the threat that any institution bankrolling the buyout of AC which didn't include the purchase of Bankrupt Canadian airlines would find their ability to carry on business in Canada very difficult. AC was forced.

[FA@AC]

I don't recall seeing you at any of the 4 hr noon Monday executive management meetings that I attended from Aug 95 through 2003, (which provides a clue as to which day of the week I spent in Calgary), so please forgive me if my recollections of what was said and the strategies developed within those meetings differs from your guess work and speculation.

You have very little idea what was going on. If you did, you probably wouldn't be so quick to bring it up every time your arguments are stymied by quantitative fact.

It takes two to tango.

Here is some quantitative fact for you. One needn't have been at any WestJet executive management meeting to know that WestJet tried to prevent AC from matching its fares at one stage. WestJet did so publicly at the competition bureau (or whatever the department was then called). It really isn't a big deal especially after all this time, and I only brought it up in passing as one of the challenges AC has had to face that WestJet and other carriers haven't. I don't know why the subject touches so raw a nerve for you. Until you mentioned it I had actually forgotten that AC, soon after its acquisition of Canadian, had planned to deploy some of the 737 fleet to start a discount airline at YHM. By the time the government meddlers finished up, AC had agreed not to go ahead with that one after all. Whether WestJet had influence on that outcome I don't know. You might, but if you deny that WestJet tried to have AC prohibited from matching its fares you're being disingenuous, so I'd be reluctant to take your word on any similar subject.

Here is further quantitative fact on the subject of that other matter that I may have brought up more often than you'd like since it also impacted AC: This is a discussion forum, not your private blog. You might like all readers of your posts to gush in awe while you crow away about how you know what is under Richard Branson's study and the rest of us do not, but you don't get to decide what points others bring up. And I have very little idea what was going on? Sorry, but having seen plenty of stories in the national media in which a certain former WestJet executive was reduced to whimpering that he couldn't help himself because he's a neurotic mess who suffers from severe OCD, I know enough of what was going on and so does anyone else who read the papers.

What was going on was an attempt to damage AC for your benefit while it was in CCAA. It could have damaged the livelihoods of some 20,000 employees and thousands of retirees. So if occasional mention of the caper is embarrassing to you, or if it hurts your feelings or damages your self-worth to the point where you have to go and lie down for a few minutes before you can even perform one of your weird OCD rituals, you have only yourself to blame.

You do like to shoot the messenger.

[J.O.]

CPAIR, It was ordered by the dishonourable MOT at the time who forced TD Bank out of the room under the threat that any institution bankrolling the buyout of AC which didn't include the purchase of Bankrupt Canadian airlines would find their ability to carry on business in Canada very difficult. AC was forced.

At least he provided something to substantiate his argument.

[Guest]

CPAIR, It was ordered by the dishonourable MOT at the time who forced TD Bank out of the room under the threat that any institution bankrolling the buyout of AC which didn't include the purchase of Bankrupt Canadian airlines would find their ability to carry on business in Canada very difficult. AC was forced.

I would love to see your proof.

Here is some more of mine:

Air Canada - Canadian Airlines Merger Reprinted from Fasken Martineau's Competition & Marketing Law Bulletin, February, 2000 On December 21, 1999 the Air Canada / Canadian take-over drama drew to a close with the announcement that the Competition Bureau did not intend to oppose the acquisition of Canadian Airlines by Air Canada. The Bureau advised Air Canada that it believes that "...the emergence of Air Canada as a single dominant Canadian airline would raise very significant competition concerns." However, the Bureau concluded that given Canadian's precarious financial circumstances and the existing regulatory regime applicable to the industry, there did not appear to be a competitively preferable alternative. The Bureau obtained undertakings from Air Canada to address some of the Bureau's competition concerns. Pursuant to the undertakings Air Canada has made significant commitments to: · sell its new interest in Canadian Regional Airlines Limited, at reasonable terms and subject to a timetable set out by the Commissioner of Competition; · surrender slots at Pearson International Airport for assignment to other Canadian carriers; · in the event that a Canadian discount carrier begins to serve eastern Canada, Air Canada will refrain from establishing its own discount airline service until September 30, 2001; · surrender key facilities (loading bridges, gates, counters, etc.) at specified airports across the country; · provide access to aeroplan points for existing carriers and new entrants; · enter into interline and joint fare agreements; · provide Canadian carriers a right of first refusal on surplus aircraft of Air Canada; and · alter its travel agent commission override program so that it is no longer based on revenue performance or market share for domestic services. In addition to the undertakings referred to above, the Bureau has advised Air Canada that it will be making representations to the Minister of Transport seeking air transport policy and regulatory changes which are pro-competitive as outlined in the Commissioner's October 22, 1999 letter to the Minister of Transport. The proposed changes to air transport regulation in Canada include: · relaxed foreign ownership rules to provide greater access to foreign capital; · relaxed rules to permit foreign competition in domestic passenger travel in Canada; · greater access to government designated international routes; · establishment of a regulatory framework governing allocation of slots at Canadian airports; · rules to limit exchanges of passenger booking information on domestic flights; · amendments to the Competition Act: · permitting the federal cabinet to specify by regulation what acts or conduct is "anti-competitive" within the meaning of section 78 of the Act; and · providing the Commissioner of Competition with the power to issue temporary cease and desist orders to prevent injury to competition or irreparable harm to an air carrier where the Commissioner is of the opinion that such conduct is predatory. On January 4, 2000 Air Canada completed its acquisition of control of Canadian Airlines announcing the take-up of shares of Canadian Airlines. For further information please contact Tony Baldanza (416 865 4352) or any other member of the Competition & Marketing Law Group

http://www.fasken.com/files/Publication/129948d0-ce2a-48d5-bac1-40bf147d6277/Presentation/PublicationAttachment/aa87a958-cb88-4a07-9182-e7daa50da0d4/AIR%20CANADA%20CANADIAN%20AIRLINES%20MERGER.PDF

In 1999 it appeared that the future of the company was again in doubt, with rival takeover bids under consideration. It was apparent that CAI would need substantial financial bolstering to continue operating as a major national airline. In June, Air Canada proposed to purchase CAI's international routes. The government suspended competition rules to 90 days to allow the airlines and other interested parties, such as Onex Corp. led by Canadian financier Gerry Schwartz, to discuss restructuring proposals. On 4 January 2000, Air Canada formally assumed control of CAI.

http://www.thecanadianencyclopedia.ca/en/article/air-canada/

and also: https://books.google.ca/books?id=AROwAAAAQBAJ&pg=PT241&lpg=PT241&dq=history+of+the+take+over+of+canadian+airlines+by+air+canada&source=bl&ots=75vVbLVj8D&sig=PUEqyY2wn1i5rWxDmtMHzsWd5gU&hl=en&sa=X&ei=3RFUVYuzCoerogS61YCoCw&ved=0CBwQ6AEwADgK#v=onepage&q=history%20of%20the%20take%20over%20of%20canadian%20airlines%20by%20air%20canada&f=false

No where does there appear any statement that the government forced AC to take over Canadian, rather AirCanada worked very hard to stop any takeover from parties other than themselves with the assistance of the current government at the time.

http://publications.gc.ca/Collection-R/LoPBdP/CIR/892-e.htm#6legislationtxt

[acsidestick]

CPAIR,

Someone who has an experience is never at the mercy of someone with an opinion.

What you quote above is revisionist. Unfortunately, I can't really say anymore about the specifics I've mentioned.

Your publication above doesn't begin to touch on the action created the day David Collenette and John Manley (bought and paid for by Liberal Bagman Jerry Schwartz) sat at that table sipping from their water glasses while announcing that they were going to suspend the laws of Canada for the first time since the 1970 FLQ crisis in order to allow Jerry "a look at the books" which was at the time, and was ruled later to be, completely against the law.

Jerry Schwartz sold the idea to the idiot Collenette who thought he would look like the great saviour of Canada, when he was, in fact, played as a fool. Schwartz attempted to have Canadian bid a hostile takeover of AC. It failed, but not before more than 1 billion in unnecessary debt was created by the next idiot in line Robert Milton who paid such a premium in the fight ( which remember was started by DC and John Manley) that AC was now on the ropes. As it turned out RM didn't save AC from anything because Schwartz was defeated by an act of Parliment in 1937. 25years before RM was even born, the law said Schwartz couldn't have AC. This new debt, coupled with Canadians debt and encumbrances fully pushed AC to the brink.

December 23,1999 Canadian was going to miss its payroll, and cancel Christmas. I won't exaggerate by saying a deal was done at the 11 th hour because there were really 9 hours left. AC purchased a certain Asian route right, and a simulator as well as some smaller items, Dagger probably remembers better. The money was used to make payroll on the 23rd and we've been living in a state of bliss ever since. The planes were parked, one entire fleet was time exed and never flew another day.

Every bit of turmoil this industry has gone through in the past 16 years goes right back to that table, that day, when DC and JM broke the law to help their friend line his pockets. They should all be in jail, not being awarded the Order of Canada.

As to the position of Collenette forcing the merger on AC, I won't say anymore on that subject, because I can't.

[Guest]

acsidekick:

I lived through the whole thing and was very much involved on the inside. AC worked very hard to stop any other group from purchasing Canadian and was left holding the bag after their efforts were successful. Their lobbyists were successful in getting the Government of the day to stop any foreign takeover and thereby establish AC as the sole bidder. Hardly the action of a company that was forced to buy Canadian but rather the one of a company that created it's own destiny.

[DEFCON]

I think it's too bad the so-called 'rules' aren't followed.

CDN was one of the earlier examples of the 'too big to fail' style interventions of government which have become ever more common. I think an insult to the notion of the free market place begins when a failed entity enters into a bankruptcy protection scheme and climaxes with full scale publically sponsored bailout programs. Can anyone but a bankster claim the interests of investors and labour alike wouldn't be far better served if policies / laws that run opposite to the concept of capitalism were removed.

[Thebean]

Here is some quantitative fact for you. One needn't have been at any WestJet executive management meeting to know that WestJet tried to prevent AC from matching its fares at one stage. WestJet did so publicly at the competition bureau (or whatever the department was then called). It really isn't a big deal especially after all this time, and I only brought it up in passing as one of the challenges AC has had to face that WestJet and other carriers haven't. I don't know why the subject touches so raw a nerve for you. Until you mentioned it I had actually forgotten that AC, soon after its acquisition of Canadian, had planned to deploy some of the 737 fleet to start a discount airline at YHM. By the time the government meddlers finished up, AC had agreed not to go ahead with that one after all. Whether WestJet had influence on that outcome I don't know. You might, but if you deny that WestJet tried to have AC prohibited from matching its fares you're being disingenuous, so I'd be reluctant to take your word on any similar subject.

Here is further quantitative fact on the subject of that other matter that I may have brought up more often than you'd like since it also impacted AC: This is a discussion forum, not your private blog. You might like all readers of your posts to gush in awe while you crow away about how you know what is under Richard Branson's study and the rest of us do not, but you don't get to decide what points others bring up. And I have very little idea what was going on? Sorry, but having seen plenty of stories in the national media in which a certain former WestJet executive was reduced to whimpering that he couldn't help himself because he's a neurotic mess who suffers from severe OCD, I know enough of what was going on and so does anyone else who read the papers.

What was going on was an attempt to damage AC for your benefit while it was in CCAA. It could have damaged the livelihoods of some 20,000 employees and thousands of retirees. So if occasional mention of the caper is embarrassing to you, or if it hurts your feelings or damages your self-worth to the point where you have to go and lie down for a few minutes before you can even perform one of your weird OCD rituals, you have only yourself to blame.

You do like to shoot the messenger.

Neurotic whimpering? Really? Give me a break.

The only thing of any consequence that I recall that had anything to do with speech patterns was a lead lawyer who had a stuttering problem. The more frustrated he got, the worse the stutter became. It bordered on unintelligible by day's end. I found it kind of funny under the circumstances.

But then again, I was there and you weren't. If you were, or knew someone who was, you'd know exactly what I was doing to pass the time. I found one of them in a sports jacket pocket many years later. In any event, it was a day, or maybe two at some law office in Toronto, or maybe Calgary. I can't say for sure.

But you seem to know it all so why don't you remind me and everyone else what I was doing. It was painfully obvious, and probably more than a little annoying to others in the room.

You are far cleverer than I if you can figure out route profitability by having an idea what a flights load factor is.

I'm bored debating with anonymous genius trolls. If you want to be taken seriously, pm me like numerous others on this site have done and identify yourself.

I doubt you have the cajones to do so because anonymity is a trolls best tool of the trade.

Surprise me.

[FA@AC]

Neurotic whimpering? Really?

Pretty much, but you might have misunderstood my post. I was referring to the spectacle of you whining, in the media through your lawyer in an effort to defend yourself, that you simply couldn't help yourself from spying on AC's data because of your anxiety disorder. OCD was the excuse.

You're absolutely correct about one thing. I wasn't there. It doesn't exactly take a genius to get himself into the position you landed yourself in, so I'm happy not to have been there. Few people are dumb enough to land themselves in the spot you did.

You're confusing me with someone else if you think that I believe that anyone can determine a carrier's profitability just by seeing its load figures.

As for being taken seriously, I assure you that I can manage without being taken seriously by someone I do not respect.

[mo32a]

This is getting a little personal isn't it? On both sides.