Air Canada does Cut Back (at least RM)

[Kip Powick]

Rec'd RMs new book this morning....cover is in black and white...cost cutting, I guess

18 Chapters, 257 pages. Chapters include.

* "Hi, Its Gerry"

*Merging with Canadian Airlines

*The real story of Trinity and Cerberus

*Goodbye Victor, Hello Buzz

Excuse me while I turn a few pages........

[Guest neo]

Chapter 8! You're a fast reader.

[Fido]

Kip:

The book is worth the money for that part on RM, Ray and Hollis alone.

[Kip Powick]

As many of you know, I am an ex-CP employee and was probably very biased about anything AC during my short run as an AC pilot, but having become a "dot" has allowed me to formulate a different approach to AC, its history, and the present conditions.

In all honesty I think it would behoove ALL AC employees to purchase RM's book and peruse it from cover to cover. It is a real eye opener and I know many will say that RM is only telling the story from his point of view, and certainly doesn't want to look like the CEO wearing the "black hat" but...my goodness there is a lot of stuff that never made the press in this book...a great read.

If nothing else, look at the purchase as making a personal donation to Dreams Take Flight....

[Kip Powick]

OOOOOPS

Regrettabley, I have decided to remove what was posted here. I just noticed that the publishing company has a line that reads..

All rights reserved. No part of this book may be reproduced, stored in a retrevial system, or transmitted, in any form or by any means without the prior permission of the publisher

Could get my pinkys slapped

It is a good read, interesting about the Westjet spy deal...looks like AC has a case. Suggest you get the book, if nothing else you are contributing to "Dreams Take Flight"

[dagger]

OOOOOPS

Regrettabley, I have decided to remove what was posted here. I just noticed that the publishing company has a line that reads..

All rights reserved. No part of this book may be reproduced, stored in a retrevial system, or transmitted, in any form or by any means without the prior permission of the publisher

Could get my pinkys slapped

It is a good read, interesting about the Westjet spy deal...looks like AC has a case. Suggest you get the book, if nothing else you are contributing to "Dreams Take Flight"

A reviewer can make modest quotations in reviewing a book... I don't think RM's publisher would have been after you with the "Clive switch"

I bought the book yesterday, and couldn't put it down. If you are looking for a big mea culpa, this isn't it. He admits to a few errors, but this is more about establishing his side of the story, for posterity. In that sense, it's a fabulous read.

It was clear after finishing the book that Milton may leave at any time now that the company has exited CCAA.

In 2002 and 2003, he turned down two lucrative job offers - one to start a new US LCC and another to run a big international shipping company out of London. The AC board offered him a fabulous deal to turn down the second offer, but Milton had to renounce that in turn - before seeing a penny of it - because of the gathering storm in Iraq. The CCAA writing was already on the wall, and the new AC contract was just too rich if you were going to have to ask others to sacrifice. Now, post-CCAA and post-Victor Li, there is no way he can get that rich a deal. Remember, Victor Li was going to give him that big stock bonus out of his own shareholding. I'd say that there is a good chance RM is going to take another job in the next 3-6 months. He took a 20% paycut, and can probably make 5-10 times what he will be paid this year if he goes somewhere else. The only thing that might hold him in for a while is that he has been elected chairman of the IATA board of directors for 2005-06. If he doesn't get an offer from a major airline, he might want to hang in for that. But he also made it clear he looks ahead to some time in the future when he his in a job with a lot less tension.

Anyway, the book is written as an epitaph.

So he lets a lot of missiles fly.

This is no passive read. He has the knives out for a lot of people: Clive, Carty, Lou Turpen, Collenette, Chretien, Louis Ranger (the deputy transport minister), air traffic control (he blames management and TC, not controllers) and certain unnamed ACPA executives, CUPE and the media, most of whom he paints as two-faced. He really tells it like it is about the Chretien government's attitude towards AC, basically accusing it of using AC solely for the purpose of scoring political points, even when it acknowledged in private that AC's arguments were 100% right.

Some of the zingers in the book - at least for me - include:

-The feds basically insisted AC take over CP

-After Sept 11, with traffic cratering and airlines teetering on the brink, Collenette screamed at Milton that he would be breaking the law if he laid off AC employees, but Collenette was overruled by the Solicitor General who gave AC the waiver it required.

-Turpen has built one of the most dysfunctional airports in the world

-Collenette told Milton that he knew the creation of Tango didn't put C3 under, but he would never say so publicly

-ACPA filed a grievance after Milton got Bombardier to fly him back to Canada from London on a private jet the day after Sept 11 when there was no commercial option available.

Whether you like RM or not, the book is a great read. Most people in the industry can agree with his characterizations of the federal government and the media. He doesn't dwell on competitors - except for one page on Clive and a few pages on the espionage case... He lashes out some of the factors holding back the whole industry in Canada... And he doesn't mince words.

Considering the proceeds go to Dreams Take Flight, not to RM personally or to AC's coffers, this book should be must reading in the industry and anyone who wants this country to engage in rational policy making.

[Don Hudson]

Dagger;

I picked up the book last week and I agree completely with all your comments. Its a fabulous read.

[dagger]

Dagger;

I picked up the book last week and I agree completely with all your comments. Its a fabulous read.

Don

You are one of the best people who can comment on pages 178-179. For those who have not read the book, it's Milton's take on employee relations at legacy carriers. Basically, he says, it's futile to try to garner employee support at a legacy carrier. No legacy carrier has great employee relations. It's the nature of the beast. Now, some would say Continental under Bethune has accomplished just that, but I am not close enough to the CO situation to say whether the relationship is really that good, or whether Bethune likes to encourage that idea for his own self-serving reasons. I know that when Bethune took over, morale was so low - by far the lowest in the industry - that any of his gestures at morale raising were destined to be well-received and might boomerang at airlines which had enjoyed more success - and rewarded their employees with bigger salaries and benefits - over the years.

Also, Milton makes a point that one third of pilots - the ones doing intercon flying - basically spend too little time in contact with the organization. They report for duty, fly, rest overseas, fly, go home. And after two weeks of flying and resting, a lot of them spend the balance of the month at home. Milton's not proposing to change the scheduling system - though he is enamored with seniority-based pay - but does cite the need to find new ways to communicate with the most senior one-third of the pilot group.

[Steam Driven]

"Now, some would say Continental under Bethune has accomplished just that, but I am not close enough to the CO situation to say whether the relationship is really that good, or whether Bethune likes to encourage that idea for his own self-serving reasons."

If you want another good read, try "From Worst to First. The Continental Airlines Story." It's a bit dated now, but explains what Bethune got himself into and how he raised morale. It's also from a CEO perspective, but is very interesting.

Cheers.

[MCDU]

Also, Milton makes a point that one third of pilots - the ones doing intercon flying - basically spend too little time in contact with the organization. They report for duty, fly, rest overseas, fly, go home. And after two weeks of flying and resting, a lot of them spend the balance of the month at home. Milton's not proposing to change the scheduling system - though he is enamored with seniority-based pay - but does cite the need to find new ways to communicate with the most senior one-third of the pilot group.

I suppose that I'll have to read the book, but I find this a very curious comment. The rest of us are in the exact same situation- we report for duty, fly up to 4 or 5 legs, layover, report for duty somewhere else, fly some more, etc., go home. We work completely unsupervised and have just as much "contact with the organization" as the overseas pilots. (I know, I used to be one.) If Milton's looking for ways to communicate he has the use of the web and/or email, just like everyone else.

Or is this code for some other issue....?

[dagger]

I suppose that I'll have to read the book, but I find this a very curious comment. The rest of us are in the exact same situation- we report for duty, fly up to 4 or 5 legs, layover, report for duty somewhere else, fly some more, etc., go home. We work completely unsupervised and have just as much "contact with the organization" as the overseas pilots. (I know, I used to be one.) If Milton's looking for ways to communicate he has the use of the web and/or email, just like everyone else.

Or is this code for some other issue....?

I don't think it's code. He says the company is looking to improve those electronic channels so that it can impart more of its messages without having crewmembers read them first in the media where they are often distorted.

[RFL]

It is becoming increasingly obvious that some of you believe that TRUTH and RM do coexist. Even our forum resident Michael Moore types (dagger and DH) are buying into it.

That is good for me, I have a condo for sale in YVR. Don't worry about those blue tarps, they are just there to keep the sun out!

[newgirl]

I have not read the book but I think I will after some of the above comments.

It was always my gut feeling that the Government gave RM the option of buying out Canadian " as is" or Nothing. Take it or leave it- no discussion.

My take on RM , right or wrong was that he would have suggested a buy-out but with layoffs to at least 50% of Cail staff. The Gov. said no - take it all! And he did much to the detriment of AC.

JMO and not meant to be dergrogatory to any OCP employees.

[dagger]

I have not read the book but I think I will after some of the above comments.

It was always my gut feeling that the Government gave RM the option of buying out Canadian " as is" or Nothing. Take it or leave it- no discussion.

My take on RM , right or wrong was that he would have suggested a buy-out but with layoffs to at least 50% of Cail staff. The Gov. said no - take it all! And he did much to the detriment of AC.

JMO and not meant to be dergrogatory to any OCP employees.

On pages 102, 103, Milton says the government made clear threats that AC would have to proceed with its offer and take all of CAI or lose Canadian's most coveted international routes to other Canadian carriers. He believes that CAI would have been bailed out by the feds, and if that didn't work and CAI failed, AC would have been denied the spoils. Since AC then put CAI through a bankruptcy restructuring process, the most damaging aspect of AC's takeover proved to be the no-layoff and other restrictions imposed by the government on the merged AC. Post Sept 11 and SARS, Milton says he came around to the view - long expressed by pundits - that it would have been better had AC let CAI go under in 1999.

[Cargo Agent]

It's definately one that's hard to put down. I'm on Chapter 4 already and it's confirmed some of the things I've been thinking for a long time. Middle management was stuck in a Crown Corp mentality for a long time after privatization, and in some aspects remains so today.

CA

[newgirl]

Dagger

Thanks for the quote as they confirm my theory. I definately will buy the book and show it to my nay sayers who scoffed at me.

Guess I'm a pundit now instead of just a pretty face! ha ha

Boy do I feel redeemed.

[Seeker]

Just wondering if anyone knows if the two pilots mentioned on page 61 are still with the company? A black eye for ACPA if these comments are true.

[wingjockey]

Can someone post where you can order the book (or the link) so that all the proceeds go to the Dreams Take Flight. I know that is the case but cannot remember where it is available (Kraft disease). I would like my donation to be completely to the charity. Thanks

[Cargo Agent]

Can someone post where you can order the book (or the link) so that all the proceeds go to the Dreams Take Flight.  I know that is the case but cannot remember where it is available (Kraft disease).  I would like my donation to be completely to the charity.  Thanks

Here, you go. Print order the order form and mail it with a cheque to the address shown. Dreams take flight gets an extra $5 this way. All of Milton's royalties are going to them as well.

http://www.achorizons.ca/en/issues/2004/oc..._Book/index.htm

[wingjockey]

Thanks. I did just that

[Guest Jiminy]

Air Canada defence soars, plummets

By MICHAEL JANIGAN

Saturday, October 30, 2004 - Page D10

Straight from the Top: The Truth about Air Canada

By Robert Milton

with John Lawrence Reynolds

GreyStone, 266 pages, $34.95

As a child living in Singapore in the early 1970s, Robert Milton would spend most of his spare time on the outskirts of Paya Lebar airport, watching aircraft arrive and depart. Before the age of 10, the future president and CEO of Air Canada could easily identify airplanes. Later, as a young teenager, he was poring over the monthly edition of the travel agent's ABC guide, memorizing flight schedules for whole regions of the world. His fascination wasn't aircraft; it was the business of airlines. Like a juvenile general strategizing battles with toy soldiers, he planned flights across the world and imagined ways in which the airlines could change their schedules to improve efficiency.

As Milton writes with characteristic aplomb in Straight from the Top: The Truth about Air Canada: "I knew the equipment, I knew the airlines and I knew the destinations. I learned how airlines operated, complex schedules and how the schedules meshed, making the journey comfortable for the passengers, ensuring that cargo reached its destination on time to earn a profit for shareholders"

Straight from the Top is billed as Robert Milton's "direct, no-holds-barred inside story of his experience at the helm of Air Canada," and his eagerness to tell his version of events in the maelstrom of Air Canada's recent tattered history, occasionally makes it seem that Straight from the Hip would be a more appropriate title. To be fair (as he constantly reminds us), Milton's conduct has been subject to a level of public scrutiny, and his stewardship of Air Canada excoriated, in a way few Canadian business leaders have experienced. Globe and Mail reporter Keith McArthur, in his recent book Air Monopoly, notes: "In the days following Air Canada's filing for bankruptcy protection, one question was asked with embarrassing frequency: How could a monopoly fail? For many Canadians, the court filing was proof of mismanagement at Robert Milton's Air Canada. Milton was still well respected in international aviation circles, but had lost his credibility with customers, government, employees and investors"

The book is really two narrative threads spliced together: One is the account of a smart and exuberant operations wonk living out his childhood dream; the other is a screed of vitriol and one-upmanship visited upon those who would slight or disrupt his reverie. The former tracks Milton's meteoric rise from the owner of a shoestring package-delivery airline called Midnite Express in the 1980s to the youngest CEO of a major international airline in 1999. Along the way, the author's enthusiastic description of his ascension makes the components of airline profitability and their pursuit seem compelling and real.

The latter thread, however, is brooding and Nixonian, fulminating at the callous treatment of Milton's airline by a laundry list of enemies: politicians, bureaucrats, union leaders, rivals and the media. The brilliant designer of competitions between aircraft suppliers for Air Canada's business is myopic and petulant when it comes to public criticism. Milton brushes off customer disenchantment with Air Canada's calamitous post-Canadian-Airlines-merger performance as overblown, and vigorously attacks those with the temerity to suggest that Air Canada needed market or regulatory discipline. He assails politicians whose public utterances were critical of Air Canada, but fails to explain why such criticism resonates with their constituents. Something other than his grand design and operation is seemingly always at fault for the airline's perceived failings.

The scattershot nature of Milton's efforts to return fire obscures some trenchant and relevant observations concerning the management of Pearson Airport by the Greater Toronto Airports Authority and the government mismanagement of the airline file. Former minister of transport David Collenette is singled out for particular denigration as a duplicitous bumbler in a Chrétien government that the author clearly despised. In truth, despite Milton's rancour, there was little to commend the government approach to airline restructuring in a period that seemed to involve the least effective elements of competition and regulation.

The settling of scores that is explicit in Straight From the Top is usually reserved for retrospectives from players who have left the stage. Milton remains as Air Canada's CEO for the foreseeable future. This may account for his relentlessly positive spin on the airline's descent into bankruptcy protection. Milton's posture contrasts greatly with that of former astronaut and president of Eastern Airlines, Frank Borman, who some two decades earlier wrote in his autobiography, Countdown, that a Chapter 11 filing for his airline would have been like a failed, aborted space mission, and that the words themselves had a "sobering air of sheer desperation."

Despite his rosy predictions about Air Canada emerging from bankruptcy protection, Milton seems resigned to a new cost-cutting paradigm that changes the flight path of his boyhood plan: "For me the fun really ended when I realized that profitability could no longer be achieved simply by designing the best schedules for the best networks using the right aircraft."

Finally, Straight from the Top works better as an autobiography than as an effective polemic against the adversaries of Milton's beloved airline. While this is a result that the author perhaps did not intend, it provides a unique view from a captain of a corporate ship caught in the eye of a hurricane.

Michael Janigan is executive director and general counsel for the Public Interest Advocacy Centre in Ottawa.