Seeker Posted March 31, 2003 Share Posted March 31, 2003 http://www.cbc.ca/stories/2003/03/31/air_canada030331 Link to comment Share on other sites More sharing options...
Guest toeblake Posted March 31, 2003 Share Posted March 31, 2003 What a great way for the federal government to spend our tax dollar!! Will there be some left for Westjet, Jetsgo, and Canjet? Link to comment Share on other sites More sharing options...
Guest dirtyredhat Posted March 31, 2003 Share Posted March 31, 2003 This is getting a bit old here...when the above mentioned fellas start flying internationally and have things like SARS, war etc to contend with, as opposed to worrying about whether or not to pull out of a money losing route (because THEY can) or 'we just don't want to fly into Brandon anymore' then we can compare apples to appples. Cheers Link to comment Share on other sites More sharing options...
Seeker Posted March 31, 2003 Author Share Posted March 31, 2003 Agreed. The question isn't " Does AC deserve special status? " but rather " How much special status does AC deserve? " Link to comment Share on other sites More sharing options...
Guest Posted March 31, 2003 Share Posted March 31, 2003 You forgot to mention forced mergers Link to comment Share on other sites More sharing options...
Guest qb Posted March 31, 2003 Share Posted March 31, 2003 Seeker, The question isn't " Does AC deserve special status? " but rather " How much special status does AC deserve? " That's what you wrote. Would you mind explaining that a little further? Thanks, qb Link to comment Share on other sites More sharing options...
Guest Lupin Posted March 31, 2003 Share Posted March 31, 2003 what good will it be to give AC money if it comes with strings attached saying you have to maintain service to mosenee or someother non profitable routes?? Lupin Link to comment Share on other sites More sharing options...
Guest JW Posted March 31, 2003 Share Posted March 31, 2003 You said >>The question isn't " Does AC deserve special status? " but rather " How much special status does AC deserve? " << I think that is actually quite profound - seriously. History has indicated that in various ways, the Government has treated AC specially. AC has been around since the mid-1930s. One has to view, and understand the relationship of a Crown corporation with Government and the special situations of the airline in that history, to begin to comprehend that the Government has never really been able to truly cut those ties completely. Another aspect is that the 1984 "deregulation" of the industry under Lloyd Axworthy as the then Transport Minister was never really deregulation at all, in the sense of the US industry. The pressure existed because the the US deregulation to carry out some form of reduction of Government control. However, in Canada there was never an proper process in Parliament to carry that out. The "deregulation" was cobbled together. Wardair was supposed to be the golden-haired boy of the industry. Privatization was not created to see AC succeed, but for Wardair to succeed, imo. PWA, at that time was owned by the Alberta Government. The resultant AC is a product of the above to a large degree. Then, along comes a major shift in the marketplace, as has happened over a period that is less than a decade. One has to admit that David Neeleman and June Morris have had a profound influence on that, imo. Via the Morris Air, the Southwest, Westjet, and now JetBlue, Neeleman has really understood what the future of the marketplace is all about. Bus travel of this century! Cheap point to point service with as little hassle as possible. Unfortunately from the AC point of view, AC is bogged down by many other encumbrances that the ones of Government's creation. The problems of AC are also the problems of the major carriers of the US, and around the world, too. Major carriers under their current structure are redundant. Mr. Milton has said that - even though kind of late in recognizing it, imo. AC is highly unionized. Should AC wish to contract out, that is very difficult to impossible under current workrules for example. The relationship between management and the unions is not good. AC management took years to shrug off the "Crown-corp" mentality. Taking on CDN was a huge mistake (and one that management should never have been sucked into for whatever reasons that may have occurred). Overall, ACs structure is a "grandfathered" one. Making changes in that structure is like trying to move a railcar by pushing on a rope. The first couple of feet move, then nothing... The desire from management is to see major changes, toward a LCC model, on the labour side. That's fine - likely that will be forced to happen. However, if there is no substantial change in the overall structure, and particularly in the modus of the company management - what's the point! The holes are still leaking, the old structure still exists. Management wants labour to change. I agree that that is necessary. Management wants to work on an LCC model. Probably that is what needs to happen. But the success of the LCC model will not happen under an "old cost carrier" business, or management structure. HOW do you get there from here? Well, a start might be looking at Continental's methods used by Bethune and Brenneman...all at once and right away!! With regard to special rules under which AC operates, to feeling that suspended the understood laws under which AC operates were totally "rational" in a political sense, the Government has considered AC "special". There has always been a sense that the Government has treated AC as some ancilliary political appendage, of sorts, that never ceased even post privatization - and that happened a decade and a half ago. The fact that AC WAS to be part of the solution to the woes of the industry was made clear in 1999. The Government made the decision to interfere in 1999, and basically the relationship between Government and AC was sealed at that point. The interference, meddling and manipulation has not stopped. AC has become the obstreporous child to the Government's domineering parent. The relationship is obviously very strained. Aside to that, the management decisions of that time will have to be the subject of Mr. Milton's memoirs and the rationale for succumbing to that decision one for the business schools to ponder as they dissect the decline of AC. But it's been pretty obvious, imo, that AC has not been "free" - in the same sense as Westjet for example, and ONLY as an example - to carry on without encumbrances of the ACPPA, various special applications of the Competition Act, directions from the Government, etc. This goes back to the coercion to drop the Gemini lawsuit, with promises of the Japan approval, and even many situations prior that, where the Government failed to perform (or actually totally reneged), too. For example, would the general public even CONSIDER it reasonable that the Government force Westjet to be part of a solution to saving AC?? Ask yourselves that when you are thinking about whether AC has been a special case or not? How about forcing Westjet to keep bases or facilities in various cities despite cost or ecomonics? Various hiring or language policies? Personally, I don't see any way out other than CCAA. It's risky. The Government will likely be needed to direct that. In the end it will not work if the current management structure comes out on the other end, too, if the model is meant to be an LCC one. What is the role of AC wrt the service in this country and abroad vis-a-vis all the other carriers in Canada? In the end, what is served if AC does liquidate? So, Westjet then becomes the dominant carrier? 40,000 people are looking for work in Canada. Hundreds of suppliers are on the ropes financially. The major carriers in the US and Canada are in trouble. There is NO doubt, imo. However, this is NOT the USA. The model of CCAA and Chapter 11 are NOT the same. The model of deregulation and the relationship between Government and the airlines has NOT been the same. The amount of political "hands-on" has NOT been the same. The solutions for AC v the US carriers are NOT the same. AC has been treated as "special", and, as the previous posted stated... The question isn't " Does AC deserve special status? " but rather " How much special status does AC deserve? " ...imo! JW Link to comment Share on other sites More sharing options...
Guest dirtyredhat Posted March 31, 2003 Share Posted March 31, 2003 Those strings are already in place...that is the point, Westjet et al can do whatever makes money and stop doing what doesn't (kind of a neat idea eh?) but AC must provide 'x' number of seats into/out of everywhere. I don't think that other guys want the government's 'help' as much as they think they do. Link to comment Share on other sites More sharing options...
Gumbi Posted March 31, 2003 Share Posted March 31, 2003 did you say "deserve"? Link to comment Share on other sites More sharing options...
Mitch Cronin Posted March 31, 2003 Share Posted March 31, 2003 Good post and excellent points. It can't be disputed that the feds have never let AC go completely, and it follows that they can't do so now. Link to comment Share on other sites More sharing options...
Seeker Posted March 31, 2003 Author Share Posted March 31, 2003 Please see reply from Jim above, more eloquent and detailed than I could ever be. Link to comment Share on other sites More sharing options...
dagger Posted March 31, 2003 Share Posted March 31, 2003 If you apply a low cost model - let's say the standard discount pricing model, a great deal should change automatically. Just look at Tango and Zip. Those are not only discount priced, but they have a much slimmer structure behind them. Pricing is formula based, not adjusted hour by hour by yield managers and route control. The management model changes in this case. You don't need a big advertising and promotions department. You don't need to sponsor golf tournaments or car races. So philosophically, the airline would undergo a significant change in management. This part of the change isn't something that unionized employees should fear. It would contribute to a leaner and most effective carrier. However, the model is one of low cost and higher productivity, and that is an employee issue. Link to comment Share on other sites More sharing options...
Guest b52er Posted March 31, 2003 Share Posted March 31, 2003 AC is not forced to fly to beijing, Hong Kong, Asia or anywhere else overseas. This is THEIR choice and therefore they alone shoulder the economic risk. WJ has not asked the Feds for overseas slots, nor do I think they want any at this time, therefore........no risk. End of story. AC is on their own! Link to comment Share on other sites More sharing options...
Seeker Posted March 31, 2003 Author Share Posted March 31, 2003 ....AC is on their own!... Not according to David Collenette. If I was at Westjet I'd be worried because one of two things is about to happen. Either AC will restructure and be able to compete with WJ on more equal terms or AC will disappear and WJ will need to compete with Canjet and Jetsgo. Which of these looks good to you. WJ has enjoyed enormous success because they can price their product below AC, this seems likely to change now. Link to comment Share on other sites More sharing options...
dagger Posted March 31, 2003 Share Posted March 31, 2003 Well, that's a nice thought. Nobody is forced to fly to Beijing. But it's kind of good economically for Canada that there are airlines that fly to and from Canada internationally. So while that might not justify a bailout of Air Canada, it is in Canada's best interests that international routes are served. Link to comment Share on other sites More sharing options...
Guest flax Posted March 31, 2003 Share Posted March 31, 2003 If AC doesn't want to contend with wars, SARS, then don't fly internationally. It may seem to be getting a bit old to you because it is reality. If AC can't survive on its own merits, then too bad. Where was the money when C3 went under, or Greyhound for that matter? The feds got involved with Canadian and see how that has worked out?. Now i believe they are involved in some kind of cover up wrt to Transat's glider incident. (yes i have no firm evidence of this but clearly something is going on) And now they are meddling in AC's affairs. If AC goes into bankruptcy then so be it. The feds have gouged Canadians and airlines when it comes to things like the security fee (tax), ridiculous airport and nav canada fees and now they are pretending to come to the rescue. This won't work!! A few hundred million donated to AC solves nothing. Then end result will be the same inefficient, poorly run company. One more point, isn't Collenette's timing a bit off here? Doesn't this just give ammunition to those within AC who don't want to make constructive changes, an opportunity to maintain the status quo? The man never ceases to amaze me, he does precisely the opposite of what common sense dictates. Then again Kavafian refers to him as one of the smartest men he's ever met. And after all, Kavafian is an aviation expert in Canada.(sarcasm here) If only the experts and the government would let the business sort itself out, we would be much better off in the long run. Link to comment Share on other sites More sharing options...
Guest dirtyredhat Posted March 31, 2003 Share Posted March 31, 2003 Ah you know, you are probably right...Canadians really doesn't need to travel to asia, not much happens over there that concerns us and besides, there is no money over there anyway...it would be better if someone else made what little money is available to be made in asia, japan and the far east. You probably don't use anything that is from those parts anyway...buy Canadian! Link to comment Share on other sites More sharing options...
Guest kevenv Posted March 31, 2003 Share Posted March 31, 2003 The "Feds" don' charge the airport improvement or landing fees (I assume that is what you are refering to by "ridiculous airport fees"). Individual airport authorities charge what they require to maintain and / or improve the airport. It's been that way since the "Feds" got out of the airport buisiness. As for NavCanada fees, the "Feds" don't charge them either. The fact that you call them NavCanada fees should tell you something. As for them being ridiculous, they are a fair bit lower than the fees the government did charge for the same service. These fees are a steal when compared to the US and others. For example: Overflight costs per 100km ($US) B737 Canada $16.99 Australia $ 22.69 US Oceanic $ 31.66 US Domestic $ 67.44 France $ 67.28 UK $ 97.83 Germany $ 108.09 B767 Canada $30.08 Australia $ 40.18 US Oceanic $ 31.88 US Domestic $ 67.44 France $ 119.14 UK $ 172.87 Germany $ 191.40 Source IATA In light of these figures could you please explain where the word ridiculous should fit in. Please don't misunderstand me here, I am no fan of the "Feds" but your info is somewhat erroneous. Link to comment Share on other sites More sharing options...
Guest Sidekick Posted March 31, 2003 Share Posted March 31, 2003 I agree with Seeker, with AC coming down to WJ's model and Jetsgo, HMY, and others coming from the bottom perhaps WJ's shareholders shoud have some concern. If I worked at WJ I wouldn't want a wholesale change in Canada's aviation policy..however inevitable? Link to comment Share on other sites More sharing options...
Gumbi Posted March 31, 2003 Share Posted March 31, 2003 Flax, re: "Now i believe they are involved in some kind of cover up wrt to Transat's glider incident." I hope, for your sake, that you are right... pretty serious accusation. Link to comment Share on other sites More sharing options...
Guest flax Posted April 1, 2003 Share Posted April 1, 2003 Thanks for the info. I guess what i was trying to illustrate is that airlines in Canada seem to be paying through the teeth for services. Perhaps i am wrong, but i'm always amazed that airlines can ever make money with the present state of affairs. Link to comment Share on other sites More sharing options...
Guest flax Posted April 1, 2003 Share Posted April 1, 2003 I hope for my sake i am wrong. I don't wish that Transat was at fault regarding that incident at all. Can anyone explain to me why the official accident report has not been released for public consumption? Granted, i've been out of country for a bit... has it been released then? The investigation is over, is it not? Then where are the results? Wasn't it made clear that there was a massive maintenance liability? Weren't there issues with the handling of the emergency itself? I'm not laying blame here because obviously i don't know all the facts. But since these facts are not yet available to those most interested, it makes me wonder just why. The investigation and determination of causes of accidents are to be done in a timely fashion. I have been led to believe that this investigation has been completed so why is it being buried? I truly hope that my conspirist theory is out to lunch. If anyone can enlighten me i would appreciate it. Link to comment Share on other sites More sharing options...
Guest b52er Posted April 1, 2003 Share Posted April 1, 2003 AC can currently price below WJ. The trick is to get costs below WJ. That.....AC will never be able to do. Their unions will not permit it. Its that simple! Link to comment Share on other sites More sharing options...
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