Tango Niner Posted May 30, 2003 Share Posted May 30, 2003 Your move, ACPA. Better do it quick. T9 ----------------------------- Court Monitor Warns Disaster Looms For Air Canada Without Pilots Deal Canada (May. 30, 2003 - 06:43) TORONTO (CP) -- Air Canada (AC) lost even more altitude Thursday, with a court-appointed monitor and others warning that delays in reaching an agreement with its main pilots union could spell disaster for the insolvent airline. "It's quite serious because the company doesn't have much cash," said Jacques Kavafian of Octagon Capital. A report prepared by Ernst & Young, a court-appointed monitor assisting with the restructuring, warned the lack of a deal with the pilots threatened to undermine tentative labour agreements with the company's eight other unions. The monitor also said Air Canada doesn't have enough cash on hand to cover all the financial obligations it has amassed since obtaining court protection from creditors on April 1. The company also refuses to use the financing it arranged when it sought court protection "unless a labour-cost realignment is achieved to halt such losses," the monitor's report said. A lawyer for the Air Canada Pilots Association told the Ontario judge overseeing the company's restructuring that the union is willing to accept some concessions but has been asked to contribute too much. ACPA lawyer Richard Jones said Thursday also said a significant barrier to an agreement was a proposal that the Air Canada Pilots Association and the pilots union at Jazz compete for aircraft assignments. Leaders of the pilots union were unavailable for comment, but reports say they have been asked to cut more than 800 jobs, accept 15 per cent wage cuts and accept other concessions that would save Air Canada $250 million annually. "How can ACPA recommend to its members ... the kind of sacrifice that is now being demanded by Air Canada?" Jones asked. The pilots association is the only one of nine Air Canada unions not to reach a deal this week, missing a 9 p.m. Tuesday deadline set by Justice Warren Winkler, who was assigned to help facilitate the difficult labour talks. Air Canada lawyer Sean Dunphy told Farley, who is overseeing the overall restructuring, that needed to get directions from the company's board of directors and asked to return to pilots issue at another hearing Friday. A spokeswoman for the airline in Montreal said she couldn't speak for the board of directors nor say what Air Canada's plan would be without a pilots agreement. "The reality is that the next step will really be determined by the judge," said Renee Smith-Valade. "It's really Justice Farley's decision as to how he should choose to take the process this point forward." Another hearing before Farley in Toronto was scheduled for Friday morning. The monitor's report said other unions and non-union employees have tentatively agreed to a total of $766 million in annual savings through a combination of job cuts, wage concessions and changes to working conditions. But all of that would be undone if the ACPA and Air Canada don't reach a deal, the monitor said. Pamela Sachs, president of the Air Canada component for the Canadian Union of Public Employees -- representing about 8,500 flight attendants -- said she's sympathetic to the stress facing other union leaders. Noting Air Canada has announced plans to fly fewer of the big jets used by the main airline and more smaller planes, like those used by its Jazz regional subsidiary, Sachs said the two pilots unions had been pitted against each other. "If they don't have the aircraft in their fleet to fly, they're negotiating their livelihood away. I think they're in a very difficult position," Sachs said. But Octagon Capital analyst Kavafian said the pilots are the highest-paid labour group and it's fair for them to bear a heavier burden than other unionized workers. "It's easier if you make $175,000 a year to take a 20 per cent pay cut than if you make $40,000," Kavafian said. "In this current environment, they have to reduce their costs. Or at minimum," he said, "Air Canada has to have the flexibility shifting its flying to its lower-cost regional airline, Jazz." Formerly called Air Canada Regional until it was rebranded as Jazz last year, the subsidiary serves mainly as a feeder airline for its parent, flying mostly turboprop planes and about small 20 jets. Air Canada has said it wants to fly fewer big jets and buy about 85 new regional jets that are less costly to operate and better-sized for the reduced passenger traffic it's experiencing. The monitor's report said Air Canada's operating losses are running at about $5 million a day -- even worse than in the three months before it sought court protection from creditors. It also said Air Canada "will require access to substantial amounts of new capital in addition to the major stakeholder concessions required to restructure." The report said that between April 1, when Air Canada sought protection under the Companies' Creditors Arrangement Act, and May 26 the airline accumulated $730 million in financial obligations -- about $238 million more than the cash it had on hand as of Monday. The monitor's report also said final figures for May aren't in but it appears the airline continued to lose $5 million a day, due to the combined effects of the SARS outbreak and other factors. Link to comment Share on other sites More sharing options...
Guest Simcoe Posted May 30, 2003 Share Posted May 30, 2003 As of the 30th of May, according to the monitors report, Air Canada had almost $482 million in cash, not including the $320 million they are expecting to receive from CIBC for advance Aeroplan payments. In other words, they have almost $800 million without the additional $1 billion in DIP financing from GE they haven't yet drawn on. With easy access to $1.8 billion in cash, even with a cash burn rate of $5M per day, that would last about a year. Do you really think the current situation will last a year? Comments about "board resignation" and "liquidation" are brinkmanship scare tactics and are par for the course for management. Things are not brilliant, but they are no where near as bad as they are making it out to be. Summer's approaching, Asia traffic is returning and so are loads out of YYZ. Remember, we are dealing with the same people who said a year ago Tango's growth was "limitless". Now, Tango moves back to T2, and serves a fraction of the cities it served last summer. It's hard to believe a word they say. They are paying the price now for years of poor labor relations. It really is a story of the "boy who cried wolf". ACPA should not be bullied by management into making a dumb decision, like the other unions. Link to comment Share on other sites More sharing options...
Guest azztech Posted May 30, 2003 Share Posted May 30, 2003 It's simple math,"But Octagon Capital analyst Kavafian said the pilots are the highest-paid labour group and it's fair for them to bear a heavier burden than other unionized workers." Link to comment Share on other sites More sharing options...
Guest rance Posted May 30, 2003 Share Posted May 30, 2003 "acpa shouldn't be bullied by management and make stupid decisions like other unions" It's called reality Simcoe and other unions should be comended for making difficult consessions in difficult times to see that the company will survive. A concept you and the rest of acpa unfortunatly do not get. Link to comment Share on other sites More sharing options...
Guest Hawkeye Posted May 30, 2003 Share Posted May 30, 2003 "Comments about "board resignation" and "liquidation" are brinkmanship scare tactics and are par for the course for management." "Things are not brilliant, but they are no where near as bad as they are making it out to be." What planet do you live on? Moments ago on a CBC Newsworld Buisness Report & CTV, The Air Canada Board Of Directors will give a progress report to Judge Farley at 2:30 Eastern & ground the airline. The Report went to say that since there is no deal with the pilots Air Canada will be officially be Bankrupt and taken over by the courts. They would run the airline in the short term until a potential buyer could be found. The Judge could & has the power to self impose a deal upon the pilots. Also in the same buisness report, comparisons were drawn to the Swiss Air/ Regional fallout where a buyer could pick up the pieces of AC and then insert what's left into Regional Jazz which has lower labor cost! Time to come down from that Tree! Link to comment Share on other sites More sharing options...
Guest YVR_A320 Posted May 30, 2003 Share Posted May 30, 2003 I do commend the other unions. I'm glad they were able to get through this difficult process as easily as they did. Unfortunately, ACPA is being asked to accept concessions far beyond what any other group is being asked. We realize that we will have to give a higher percentage than any other group, but there are limits to what can be expected. ACPA is therefore trying to negotiate concessions which will be acceptable to the membership. Many of the companies demands are now public. Do you really believe these are realistic demands? Link to comment Share on other sites More sharing options...
Guest easyjazz Posted May 30, 2003 Share Posted May 30, 2003 YES!! You cannot always have your way sir. Regionalization of domestic flying is the only way to take on the WJ's of our world. What is past is past. There were many opportunities to merge up to one Pilot body but that is history and now you must take your share of the lumps that acpa is resonsible for. Link to comment Share on other sites More sharing options...
Stickle Posted May 30, 2003 Share Posted May 30, 2003 Of course there is lots of cash. We have it hidden under our desks at work. You have elected to use only one piece of the picture. While the revenues do keep coming in we are not paying any bills. It's not rocket science to figure this one out. These bills are being accrued and are going to be due sooner or later. The way you make it sound there is no crisis and we should just keep going merrily along losing several million a day. Link to comment Share on other sites More sharing options...
Guest Concerned Posted May 30, 2003 Share Posted May 30, 2003 This is the first time I have posted a response, but I can not sit quiet anymore. I am sick and tired of a group of 3300 pilots ACPA bullying the rest of the airline pilots in this country. I can not believe that 3300 people will not only put 35000 Air Canada employes out of work, but hundreds of thousands of spin-off jobs that Air Canada creates. For once someone should think of the greater good as opposed to just their greedy selves. Link to comment Share on other sites More sharing options...
Guest Simcoe Posted May 30, 2003 Share Posted May 30, 2003 The Swissair -> Swiss move has been an unmitigated disaster. They lost US$156m in the first quarter of 2003 operating 26 big jets and between 30 and 40 RJ's. Last year, they lost $1b francs, and they have about $913m fr left. It is unlikely Swiss will make it through the end of the year without a merger with Lufthansa or Alitalia. Don't hang your hat on false hopes. Link to comment Share on other sites More sharing options...
Guest Simcoe Posted May 30, 2003 Share Posted May 30, 2003 Sir- with respect, please , please read the Unisys scorecard 7 that analyzes US Airways prospects post Chapter 11. I have posted the link below. Before making bold statements, do some research. Link to comment Share on other sites More sharing options...
Guest Simcoe Posted May 30, 2003 Share Posted May 30, 2003 Sir- with respect, please , please read the Unisys scorecard 7 that analyzes US Airways prospects post Chapter 11. I have posted the link below. Before making bold statements, do some research. Link to comment Share on other sites More sharing options...
Guest Simcoe Posted May 30, 2003 Share Posted May 30, 2003 Sir- with respect, please , please read the Unisys scorecard 7 that analyzes US Airways prospects post Chapter 11. I have posted the link below. Before making bold statements, do some research. Link to comment Share on other sites More sharing options...
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