dagger Posted March 31, 2003 Share Posted March 31, 2003 For the reporters which zoom in here looking for news, here are the questions you should be trying to answer. 1. What would be the direct job loss - net of expansion by other domestic carriers - and probable indirect job loss if Air Canada fails? 2. What would be the probable impact of an Air Canada liquidation on major airports - Air Canada being their largest source of their airline fee revenue? 3. Did the airports in your area make an operating profit in 2002, and if so, how much (Notwithstanding that these airports are supposed to be non-profit, they keep accruing "surpluses)? 4. What would be the effect on NavCanada if its largest single source of fees goes bust (keeping in mind that it will take time to replace that capacity, and some of it may not be replaced at all.)? Will it mean signficantly higher fees charged to passengers as NavCda expenses are amortized over fewer flights? 5. What will be the impact of communities in your province which have a dependence on Air Canada. (i.e. those too small to expect Canjet or Westjet or Jetsgo to step in with daily service.)? 6. What is the maximum exposure to Canadian banks if one of Canada's major airports files for bankruptcy protection (Hint - think Toronto, think CIBC)? 7. If Air Canada liquidates, what will be the collateral job loss in other tourism sectors (hotel, outfitters, resorts, tour companies, etc.) keeping in mind that international carriers may add some capacity but not necessarily enough for Canadian tourism objectives? Link to comment Share on other sites More sharing options...
Guest ulamo Posted April 1, 2003 Share Posted April 1, 2003 1. What would be the direct job loss - net of expansion by other domestic carriers - and probable indirect job loss if Air Canada fails? About -15000, about what is right to "rationalize" Air Canada 2. What would be the probable impact of an Air Canada liquidation on major airports - Air Canada being their largest source of their airline fee revenue? It will be tough, but no tougher than the fate of many airline workers in the past and soon to be ex AC. Lou Turpin and the like will have to scale down their versions of these Taj Mahals that they're building. The likes of the GTAA have been living to high off the hog since privitisation, they are about to get a reality check. 3. Did the airports in your area make an operating profit in 2002, and if so, how much (Notwithstanding that these airports are supposed to be non-profit, they keep accruing "surpluses)? See question 2! 4. What would be the effect on NavCanada if its largest single source of fees goes bust (keeping in mind that it will take time to replace that capacity, and some of it may not be replaced at all.)? Will it mean signficantly higher fees charged to passengers as NavCda expenses are amortized over fewer flights? Everyone is goint to take a haircut, bankrolling the status quo is not an option. 5. What will be the impact of communities in your province which have a dependence on Air Canada. (i.e. those too small to expect Canjet or Westjet or Jetsgo to step in with daily service.)? Activate the Essential Air Service program, this should have been done years ago. Allow all carriers to bid on these services. 6. What is the maximum exposure to Canadian banks if one of Canada's major airports files for bankruptcy protection (Hint - think Toronto, think CIBC)? See question 4 and PS, the banks can afford it. 7. If Air Canada liquidates, what will be the collateral job loss in other tourism sectors (hotel, outfitters, resorts, tour companies, etc.) keeping in mind that international carriers may add some capacity but not necessarily enough for Canadian tourism objectives? Dagger, NO ONE is indispensible, not you, me or Air Canada. New and existing carriers will fill the gap. "The time has come the Walrus said".... Link to comment Share on other sites More sharing options...
ChicoChico Posted April 1, 2003 Share Posted April 1, 2003 Don't write us off too soon and BTW best wishes to you too.... Link to comment Share on other sites More sharing options...
dagger Posted April 1, 2003 Author Share Posted April 1, 2003 I did say indirect as well as direct job loss. The indirect loss, including the impact on tourism operators which depend on international inbound traffic, is likely to be significant. There are three markets in Canada: Domestic, transborder and international. Domestic passenger air is about one-third of Air Canada's revenues. So roughly 12,000 jobs are at stake domestically and can be replaced through the expansion of domestic carriers. However, if there is too much capacity, it stands to reason that maybe half of those jobs won't be replaced. Every other job in AC, maintenance for other carriers, international cargo, transborder and international passenger, is likely to absorbed by international operators. So I would peg the probable job loss at closer to 20,000 direct jobs. But that doesn't include the indirect loss. For every job that is created in the economy, there is a multiplier effect of five to 10 jobs for every one created in the economy. It stands to reason that there is a job loss multiplier, too. I'm not going to venture on a precise figure except that it is almost certain to be well north of 30,000. What's lost to international carriers is permanent and will not be made up by domestic expansion. Finally, when NavCan, an airport or even a bank which has bankrolled NavCan or an airport suffers a loss, they don't take a "haircut" as you suggest. They raise fees on everyone else, or the cut services to everyone else. So a good deal of the cost could be borne by you and I in the form of higher airport fees, higher NavCan fees, etc. It's precisely because these issues aren't being analyzed by the media that I put these questions out. Your answer is personal and perhaps reflects your employer's views, but an informed public needs to know more about the ramifications of an AC failure before it either puts money into AC or denies it any assistance. Link to comment Share on other sites More sharing options...
Guest ulamo Posted April 1, 2003 Share Posted April 1, 2003 I'm not writing you off at all, I believe AC can survive this. What I am saying is just like all airline failures in the past and I mean all, Air Canada's problems are of their own making. This is not because of 9/11 or the Gulf war or SARS. This is bad management..period. Dagger is suggesting that no matter what, Air Canada shouldn't be allowed to fail because of the collateral damage, Not true. Restructure your company, you will do fine, don't, and others will fill the bill, it's that simple. Link to comment Share on other sites More sharing options...
Guest ulamo Posted April 1, 2003 Share Posted April 1, 2003 Dagger, your assertion seems to be that AC, can't/shouldn't be allowed to fail because of the collateral damage it will cause. These are the same arguments that were put forth when Canadi>n was on the ropes, to many job losses, to much damage to the western economy. In the end, where are we? All I am suggesting is that for the many good reasons that AC SHOULD survive this, the answers must come from within their organization. Not because of political interference, not because of collateral damage, but because Air Canada has a rational sustainable business plan and for no other reason. Link to comment Share on other sites More sharing options...
dagger Posted April 1, 2003 Author Share Posted April 1, 2003 Canadian didn't fail, did it? The government was afraid of it failing, wasn't it? In the end, very few jobs have been lost. Air Canada is doing more flying on the Pacific than Canadian was doing in 1999. Yes, the answers should come from within, save for tax and fee cuts that would benefit all airlines. Even Clive Beddoe was on TV today campaigning for that, while opposing an Air Canada-only bailout. Link to comment Share on other sites More sharing options...
Guest ulamo Posted April 1, 2003 Share Posted April 1, 2003 I don't believe I said CDN "failed", however since the merger by AC's own admission the equivalent number of CDN's workforce is gone from the payroll. Air Canada has pursued a policy of search and destroy since the late 1980's. The feds tried to broker a deal between AC,CP and Onex but Milton would have none of it and swallowed CP whole. Massive debt, huge inefficient workforce, 47 different types of airplanes, onerous restrictions on service and layoffs, who in their right mind would have agreed to this? the outcome was entirely predictable. With 80% of the market, they can't make it work. The only sustainable fix is a market driven, rational business plan. Link to comment Share on other sites More sharing options...
dagger Posted April 1, 2003 Author Share Posted April 1, 2003 The feds did what? You mean they tried to illegally steal from Air Canada shareholders. And a judge in Quebec issued a clear, unambiguous ruling which legal experts never challenged or biased or flawed, that through out the whole illegal, immoral business. As for the 1980s, search and destroy is what PWA did to CP, what Canadian did to WD, what various regionals did to each other before they were taken over by a major The reality of the industry in those days was policy-driven, reflecting an eat-or-be-eaten ideology which was Lloyd Axworthy's goal in the first place. You can blame governments for this, but the corporate response was uniform across the board and to suggest that Air Canada was unique in this regard is garbage. Link to comment Share on other sites More sharing options...
groundeffect Posted April 1, 2003 Share Posted April 1, 2003 Amen! Link to comment Share on other sites More sharing options...
Mitch Cronin Posted April 1, 2003 Share Posted April 1, 2003 Ok so we'll count you among the "I hate AC" crowd who wants to see us all on the streets. Thanks for your vote. Next. Link to comment Share on other sites More sharing options...
Guest windshear Posted April 1, 2003 Share Posted April 1, 2003 Those AC shares dragging down your portfolio? Market based economies have a way of correcting themselves, whether we like the particular outcome or not. Even under your doomsday scenario, people will still want to get places in a fast, safe manner, businesses will emerge to fill that need with aircraft, and people will be employed to run those businesses. I would have thought you'd have better ways of getting your views known to reporters than through a forum. windshear Link to comment Share on other sites More sharing options...
inchman Posted April 1, 2003 Share Posted April 1, 2003 Massive debt, huge inefficient workforce, 47 different types of airplanes, onerous restrictions on service and layoffs, And what would have been the outcome if American Airlines and ONEX had bought the combined company..??? Everything would have been the same... same huge workforce, ONEX would have sucked out the cash the same way as the shareholders were bribed leaving the same debt, we would have been treated as "frostbacks" by American's unions and restricted on routes and shut out of many markets and we would have been a prisoner to ground and computer services supplied by Sabre at unbelievably high prices. I don't think anyone could have predicted the tech bust, Sept 11, the war and now SARS. We were actually not doing too bad until this all started. I do agree, though... we do need a good business plan... just that the other scenario wasn't any better than what we've got. Link to comment Share on other sites More sharing options...
Guest leftbase Posted April 1, 2003 Share Posted April 1, 2003 Agreed. I'm glad to see I'm not the only one who hears more than a little partisan campaigning. Link to comment Share on other sites More sharing options...
Guest Posted April 1, 2003 Share Posted April 1, 2003 Job los will be in the vicinity of 100,000 Link to comment Share on other sites More sharing options...
Guest Posted April 1, 2003 Share Posted April 1, 2003 "Air Canada has pursued a policy of search and destroy since the late 1980's. The feds tried to broker a deal between AC,CP and Onex but Milton would have none of it and swallowed CP whole. Massive debt, huge inefficient workforce, 47 different types of airplanes, onerous restrictions on service and layoffs, who in their right mind would have agreed to this? the outcome was entirely predictable" Search and destroy?????? I recall Rhys Eyton's press conference when Canadian was born, his comments were "We are going to put Air Canada out of business", so the initial salvo was fired by the then leader of Canadian. 47 different types of aircraft??? We have 747,767, 737,A340, A330,A321,A320,A319,CRJ.I beleive that is 9 different types, of which the 320 family could be considered as one type, you must be from Arthur Anderson! Link to comment Share on other sites More sharing options...
Guest Posted April 1, 2003 Share Posted April 1, 2003 If AC were to fail, the economic fall out for this country would be staggering, while yes some one would come forward and fill the shoes, it will take months to have the company up and running, meanwhile the revenue loss for the governments,communities and businesses would be staggering, unlike the days when CAIL was in trouble, there is no other major airline around in this country. Link to comment Share on other sites More sharing options...
Guest Posted April 1, 2003 Share Posted April 1, 2003 On a side note, had Onex succeeded, the staff levels at AC would be probably 50% of what they are now,if not even smaller, all major maintenance work would be done in the AA hangars, and you would have seen AA aircraft on the most important routes. Link to comment Share on other sites More sharing options...
Guest Posted April 1, 2003 Share Posted April 1, 2003 Reregulation??? Who knows, but I beleive that we will soon see a form of it in the near future, not just here but also in the USA. Link to comment Share on other sites More sharing options...
Guest ulamo Posted April 1, 2003 Share Posted April 1, 2003 Mitch, I don't hate AC, I have posted several times that it can and should survive. Make the necessary moves to ensure that before you "rationalize" your existance. Good luck, you will make it. Link to comment Share on other sites More sharing options...
dagger Posted April 1, 2003 Author Share Posted April 1, 2003 Why staffing be down? Onex agreed to the same no-layoff provisions that Milton did. In fact, Onex made the offer first. The government then came around and made the no-layoff provisions law, and only lifted the ban after Sept 11. So who's to say what the future would have looked like under another scenario? Link to comment Share on other sites More sharing options...
Guest Posted April 2, 2003 Share Posted April 2, 2003 onex stated that it intended to cut 8000 positions. Link to comment Share on other sites More sharing options...
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