A focus for AC - Best practices

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Since everyone needs an entry point for discussions in a matter like AC's crisis, it dawns on my that this might be a good focus: Let each AC union agree to be as productive as the most productive unionized full-service carrier in the US in your area. If it is CO, fine. If it's NW, fine. You get the idea.

I'm not talking salaries. I am talking hours of work and rules.

I think Milton is ready for a solution that would allow Air Canada to do more flying, not less, although with a significiantly lower unit cost structure. In other words, the additional flying should essentially be free from a labor cost perspective because the same salaries and benefits buy more hoursof flying for the fleet.

Right now, aircraft are dirt cheap to lease, and if you want an international widebody, you can have it for five years with a cheap lease rate plus a frontloaded rent holiday. You can also get a lot of power by the hour aircraft which could sit all winter if necessary.

Milton told the analysts and media on Thursday that AC will have more internationmal routes soon. What if AC could do a LOT MORE intercon flying and save for fuel and landing fees, it was free flying. Deduct those costs, and lots of money would flow to the bottom line. These would also be top-level flying assignments, giving more junior crewmembers a greater chance of advancing to a captaincy on a big aircraft.

For the ground unions, greater productivity would secure jobs. If AC makes it to next April without cooperation from CAW, literally thousands of CAW people are OUT THE DOOR FOR GOOD. So I think negotiating to extend job security is not a concession, but smart trade unionism. If the CAW said, keep everyone on the job for, say, a three year extension of our collective agreement, we will give you much more productivity, you won't pay any overtime in our group, you won't pay excess training costs in our group, you can take surplus people and use them in Aeroplan or in setting up new businesses, you won't have to hire any summer staff to handle all of that extra flying, and for good measure we will give you a B-scale so that when you do hire again, it will be at much lower rates.

Pretty much the same could be said for the ramp with the added boost that if that group were more productive, and surplus staff was identified over and above the extra flying I propose, this new ground handling company could solicit handling work for other airlines without any additional labor cost.

As I see it, the solution isn't in trying to match up with Westjet wages and rules, or Jetsgo wages and rules. Air Canada has revenue streams that those carriers don't. The margin earned on a J-class passenger from Tokyo is a lot bigger than the margin earned on a WJ passenger between Sudbury and Toronto.

So the key to me seems to be going after more of those revenue streams with little or no additional labor cost.

That would be making AC significantly more productive at what it does best so it can do more of that more profitably.

Now everyone tell me why this can't be done.