Still no buyer for JAZZ?

[Tally-ho]

All the hoopla about JAZZ being for sale. Milton talks about talks underway and still no BIG announcement. So what was all this doom and gloom all about? I'm thinking that it's all about threats and thats all. Lets see what we can get out of JAZZ employees to help save the whale fund again. SO..........now what?

[zipped]

The Jazz employees I know cannot wait for a sale. They just want to be set free from the 1000 lb gorilla.

[Guest gunny12]

That 1000 lb. gorilla will still own 51 percent at the end of any sale zipped..... Sorry to rain on the parade.

[Guest turtle007]

If AC only sells 49% of Jazz, who is going to buy a company only to have AC run it the way they want to. The reason Jazz is in the mess it's in is because of AC, you can't really blame the Jazz puppet management who have no real control on what happens.

IMO, Jazz should have layed off the surplus after the merge, London, Victoria and Quebec bases should have been closed, and the scope should be loosened to allow us to operate unlimited REGIONAL jets.

Jazz lost $90 million, but how much of that was actual operating losses? I would say most of that can be attributed to the merger of 4 different companies. The regionals are the only part of the AC family that actually made money from flying, AC has never turned a profit from ops since it was privatized in '89. They made money when they sold Continental shares or sold airplanes, but that's it. Still thinking with a Crown corp. mentality. RM has his work cut out for him if he thinks he can turn this mess into a Westjet.

[Guest Nigol]

Here is what I got at the employee session with JR.

JR admitted that the Jazz can do the flying cheaper than ZIP, but ZIP keeps getting the flying...preserve the mainline at what cost????. Also, 'RM has said no layoffs at the mainline' meanwhile the low cost employees at JAZZ get their notice...preserve the mainline at what cost????. RM wants concessions, but he wants a larger percent of concessions at Jazz than mainline....preserve the mainline at what cost????. JR couldn't answer why the AC FAs were given a 10% raise and bonus (some $10,000) merely six weeks ago... preserve the mainline at what cost????.

I cannot see how RM can turn AC into a West Jet if all the cutting and slashing come from the pockets of the less paid.

[Guest Chiselcharter]

You didn't mention CMA can do the flying cheaper with better productivity than Jazz. But competing with WJ et al with 1900's won't do the trick.

[Guest zephyr7]

Not only will 1900's not do the trick, but you have to be above the age of majority and have more than 1500 hours.

[Guest Westcoaster]

What your suggesting is not the message Jazz employees are getting. Time will tell who will be donning the umbrella.

[Guest Westcoaster]

What your suggesting is not the message Jazz employees are getting. Time will tell who will be donning the umbrella.

[dagger]

I've sat by for months know listening to this drivel, "The regionals always made money, the regionals always made money, yadda yadda blah, blah."

It's a stupid argument to judge the present or the future. Those Jazz staffers who espouse this had better get your heads out of rear ends. The world changes. Westjet didn't exist when the regionals were supposedly profitable. Not that AirBC was profitable in competition with Canadian Regional, mind you, or that Air Alliance was EVER profitable. Air Ontario and Air Nova had weaker competition and probably were profitable. For all I know some of their routes could still be profitable.

What you had all better realize is that the world has changed. Westjet is flying regional routes that used to be Air Ontario's bread and butter. Canjet is flying some Air Nova routes. The industry is deregulated. You can't match Westjet's seat-mile costs on a Dash 8 or even an RJ or BAe-146.

Today, fuel is higher, the security surcharge and other fees have cost regional carriers a lot of money and the discount competition is eating into some of Jazz's formerly profitable routes. Fuel will come down and the surcharge deterrent may ease, but the competition isn't going away.

Yes, new ownership might also help Jazz financially, but it is not the panacea you all make it out to be and Air Canada ownership is not millstone you make it out to be. Reality is always a lot more complex, and while it is always comforting to have a scapegoat, shedding the scapegoat isn't going to assure you a better future. Before plunging into the unknown, some of you may want to get a better grip on reality.

[dagger]

I've sat by for months now listening to this drivel, "The regionals always made money, the regionals always made money, yadda yadda blah, blah."

It's a stupid argument to judge the present or the future by the past. The world changes. Westjet didn't exist when the regionals were supposedly profitable. Not that AirBC was profitable in competition with Canadian Regional, mind you, or that Air Alliance was EVER profitable. Air Ontario and Air Nova had weaker competition and probably were profitable. For all I know some of their routes could still be profitable.

What you had all better realize is that Westjet is flying regional routes that used to be Air Ontario's bread and butter. A route like Toronto-Sudbury is a good example. Today, it may be a loss-maker. Also, when WJ starts flying West from Windsor, Thunder Bay and London, Ont, it forces a response with non-stop jets (Zip, Tango). The formerly profitable Dash-8 service is no longer profitable because of loss of traffic to these new direct services. The world changes.

Canjet is flying some Air Nova routes.

You can't match Westjet's seat-mile costs on a Dash 8 or even an RJ or BAe-146. Not if you pilots worked for free!

Today, fuel is higher, the security surcharge and other fees have cost regional carriers a lot of money and the discount competition is eating into some of Jazz's formerly profitable routes. Fuel will come down and the surcharge deterrent may ease, but the competition isn't going away, it's only going to grow.

Yes, new ownership might also help Jazz financially, but it is not the panacea you all make it out to be and Air Canada ownership is not the millstone you make it out to be. You cannot be Air Canada's feeder and also a competitor. And there are not many jet routes in Canada that you don't serve now where you could fly as an independent and not compete with Air Canada (or WJ or CJ or Jetsgo).

Reality is always a lot more complex, and while it is comforting to have a scapegoat, shedding the scapegoat isn't going to assure you a better future. Before plunging into the unknown, some of you may want to get a better grip on TODAY'S reality and stop living in a past that cannot be recreated.

[Guest SYD]

I can hardly wait to see the responses to this post. Reality is not what a lot of people around here want to hear. It is about time it was said dagger.

[dagger]

What makes you think that the mainline employees are going to be excluded from the sacrifices, except your exaggerated sense of grievance? You just happen to have gotten there first because your losses are proportionately higher and because your operation was being restructured anyway. But if there is an Air Canada a year from now you can bet that every employee will have had to do something, whether it's work more hours or harder, take home less compensation, whatever.

[dagger]

Selling an airline like Jazz, in whole or in part, with all of its interlocking relationships with AC, is not like selling a used car or selling a house in a highly desirable neighborhood of Toronto or Vancouver or Calgary. It doesn't happen over night.

A prospective buyer would want to see the books, perhaps bringing in outside advisors. They would want to talk about a range of issues with AC. Codesharing, scope, employee passes and pensions, freedom to add non-competitive or even competitive services, maintenance, counter space at major airports. It could take 60-90 days just to understand the parametres of a deal before even talking seriously about price.

You JAZZparanoics can look for conspirators under every bed, but I can assure you that if there are interested buyers, they would be doing you a disservice by acting in haste. Jazz is best sold to someone who understands its current advantages and disadvantages. It might also want to wait to see what kind of a war we're going to get in the Gulf, what kind of fuel prices will be faced as a result of that war, etc. etc It may even try to nose around the federal or provincial governments to smoke out any funding which it might get for offering rural or remote services.

[Guest Operation Bomberclad]

I would say that the only unfortunate circumstance for Jazz and its employees, is that the company's fate is tied to the mothercorp in the event of a bankruptcy of the mainline.

The sale of Jazz would then be imminent and likely.

Aside from this, the grievances of the regional employees are perfectly legitimate, since the layoff numbers are very high. Some groups have taken the brunt of the cuts, as high as 30%. The expectation for the regionals around North America is that they are expanding. The situation in Canada is the reverse.

These conditions are hardly attributable to the amount paid to its employees, their complaints, the operating costs of the airline itself, or the possibly even the regional management. It also has absolutely nothing to do with the rip-van-winkle gold-spinning yarns that people are easily bamboozled into about Wetjest.

The regionals are being used as buffer to protect against economic insult -a rather costly way of protecting priviledge.

[Guest Operation Bomberclad]

I would look back on Gulf War I for my answer about just how the airlines reacted to the increase in fuel prices. One might also consider the increase in demand for raw materials, which are situated somewhat remotely from Howe & Georgia Sts.

Jazz paranoiacs? Well I guess we had to have the "conspiracy label" placed on us at one point, because we have lost all belief in the mothercorp and its over priviledged employees. At least we don't consider sycophantic boot-licking a priviledge, Dagger.

[Buzz2]

Dagger, I think your missing the point of the Jazz employees. You are right however in saying times have changed, competition is stiff,what the regionals profit was a few years ago doesn't matter ,it's what occurs today. Having said that, why should the employees who work in the lowest cost structure at AC, who also are the most productive, take concessions when it is management's job to utilize the various collective agreement's to their maximum potential. It is hardly the employees fault for Scope, it is also not our problem that AC can't bring more RJ's or whatever type they want. Year's of Service pay is very attractive and economical when used correctly, it is up to management to bring the employees the tools to do the job, not the other way around. By the way I disagree when you say you can't compete with an RJ against Westjet, and Westjet flys Sudbury- Hamilton, so it doesn't directly compete on the old Air Ontario route.

[Buzz2]

Dagger, I think your missing the point of the Jazz employees. You are right however in saying times have changed, competition is stiff,what the regionals profit was a few years ago doesn't matter ,it's what occurs today. Having said that, why should the employees who work in the lowest cost structure at AC, who also are the most productive, take concessions when it is management's job to utilize the various collective agreement's to their maximum potential. It is hardly the employees fault for Scope, it is also not our problem that AC can't bring more RJ's or whatever type they want. Year's of Service pay is very attractive and economical when used correctly, it is up to management to bring the employees the tools to do the job, not the other way around. By the way I disagree when you say you can't compete with an RJ against Westjet, and Westjet flys Sudbury- Hamilton, so it doesn't directly compete on the old Air Ontario route.

[Guest floatrr]

Dagger, you are correct about a prospective buyer wanting to have a look see at the books before making an offer.

I think the real issue is , can a prospective buyer see through all of the obvious book cooking that has gone on? How can I prove creative book keeping has gone on? I can't. Can you prove otherwise? I think not.

Can the buyer really see how much of that $88,000,000 loss is ACTUALLY attributable to JAZZ as a seperate entity? It will take alot longer than 60 to 90 days to sort out those details. In the mean-time Jazzers can just think about reality, and how the world changes. IMO.

[dagger]

I think the sale of Jazz is likely under any circumstances, assuming there is a motivated buyer with $$$. The airline was considering whether to sell Jazz years ago. But then Sept 11 intervened. Jazz is more valuable to any buyer if there is an Air Canada, at least during a transitional period.

As for your other assertions, I state again that Jazz cannot bear the brunt of labor restructuring alone because it won't come remotely close to lowering Air Canada's costs enough. Jazz entire losses were $90 million. Air Canada's loss was over $400 million. The company is looking for over $500 million in labor productivity improvements. So while Jazz has been the first to feel the impact, Air Canada employees would be deluding themselves to think they won't see similar. Maybe it will come in different forms, maybe it will take a different timetable, but it will come or a year from now all AC employees will be looking for work.

[dagger]

The seat mile costs on an RJ - even a Jazz RJ - are significantly higher than on a Westjet 737. If WJ can put a plane into a market and fill it - some 130 seats if I recall right, it makes money on its fare structure. As soon as you match that fare structure, you cannot make money. You need a higher fare structure. So what often happens is that the RJ has to offer more frequencies than WJ to offer something unique. But today's business traveller is unwilling to pay those kind of premiums in most cases for the convenience of more flights. Whatr WJ is good at is seeing that a market gets just enough frequency to make it just convenient enough for its customer base.

Now, if you tell me that an Air Canada RJ is more expensive than a Jazz RJ, I agree wholeheartedly and support the shift of all RJ flying to the regional carrier.

[dagger]

Hamilton is easily accessible to all of Western Toronto, certainly to Etobicoke, and it also bleeds of Jazz traffic heading for the niagara Peninsula. It's a one-hour drive from downtown Toronto to Mount Hope, possible a 20-35 minute drive to Pearson. And part of Jazz's loads on the route is connecting traffic to points across Canada. So the impact is definitely there.

[dagger]

With a capacity purchase model, yes, a buyer doesn't have to know about past costing practices, they just have to know what they would be stuck with, what freedom they would have to do things differently, etc. But if AC is selling the capacity and absorbing the costs, it would actually be easier to sell Jazz now than it would have two or three years ago. But that doesn't mean the due diligence can be done in 72 hours.

[dagger]

Yes you lick no boots, but in some of your collective thinking, it's clear that some of you are too busy licking wounded pride to make fundamentally sound choices.

As for the issue about resources, there is only so much drilling for oil and gas going to happen in this country. A very small part of the route system is going to benefit from such increased activity and if the activity increases sufficiently, it will attract more WJ and CJ and Zip and Jetsgo. WJ was very quick into Fort McMurray and if work in the oil sands quadruples and people flock to work there in even greater numbers, it just improves the economics for high density discount flying. And if there are a lot of people flying between Calgary and Halifax, it doesn't help Jazz one iota, either.

[Tally-ho]

Dagger, you include ZIP with WJ and Jetsgo and CJ. ZIP is Air Canada with nicely colored lipstick;pink, orange, blue, and green. It's still a high cost airline in disguise. It's flown by ACPA pilots, maintained by ACTS engineers and passenger services supplied by CUPE and Air Canada. The only lowcost thing about it is it's F/A's. How is it that ZIP was not mentioned in the media when the discussion of where the money was lost within the Air Canada family? All that was focused on was money losing JAZZ.

Don't tell me that ZIP is a seperate company!!!!! They're not and we all know what is going on here. It's called job protection for ACPA at all costs and how they have cornered almost all the flying whether it makes money or not.