Guest Patrick Bergen Posted September 18, 2003 Share Posted September 18, 2003 I see in the news today that Collenette has indicated that Air Canada will not seek a change to the 25% foreign ownership rules. Apparently this is news to Air Canada although it looks like it might be a possibility. It is amazing how he is so slow to respond to any request made of the government (IATA comments about fees, Canada 3000 bailout, etc.) and yet he decides to proactively comment that he will not be called upon to review the ruling. The net effect is he wants to do nothing yet again. It is time to replace this guy and his attempts to put the handbrake on the airline industry. Link to comment Share on other sites More sharing options...
dagger Posted September 18, 2003 Share Posted September 18, 2003 Coincidentally, I had lunch with someone very high in Martin's organization who signalled a general disdain for Colonette and indicted he'd be a prime candidate for "relocation" when the prime minister in waiting unveils his first cabinet. Link to comment Share on other sites More sharing options...
Guest Max Continuous Posted September 18, 2003 Share Posted September 18, 2003 Don't tell us ... Sheila Copps. Link to comment Share on other sites More sharing options...
Guest acj Posted September 18, 2003 Share Posted September 18, 2003 Close, Claudette Bradshaw. Link to comment Share on other sites More sharing options...
Guest Patrick Bergen Posted September 18, 2003 Share Posted September 18, 2003 I think it is one of these can't be worse scenarios..... The other interesting thing I find is that none of the airport boards have any membership from the airlines. I think most airlines would prefer a reduced AIF vs. putting a 7-11 in. The improvements seem to be changing the airports more into a shopping mall. Link to comment Share on other sites More sharing options...
Guest Tri-spool Posted September 18, 2003 Share Posted September 18, 2003 No.. I'm pretty sure you have to screw up the National Defence portfolio before you go on to Transport. My feeling is Sheila will be the next Defence Minister! LOL! Link to comment Share on other sites More sharing options...
Guest Gino Under Posted September 18, 2003 Share Posted September 18, 2003 I'm sorry Patrick. The government couldn't organize a piss-up in a brewery. They're too busy with their wedding plans. Every time a Canadian airline gets into financial trouble the idea of increasing foreign ownership jumps up at us like a breeching whale. Nothing new here I'm afraid and it's just not the answer. Now, increased venture capital might help but there's not a lot of it about these days. Especially with continued terrorist threats intimidating airlines and the travelling public. Wouldn't you say? I'd guess that would make investment from both domestic and foreign entrepreneurs a little scarce right now. Besides, Air Canada is a private Company. IMO, The Feds SHOULD keep their hands off and let "Free Enterprise" do it's thing. Have a little faith in AC management and the financial gurus who have a plan. Unless of course, you happen to believe that, should AC NOT make it out of it's shakey financial predicament then, the Canadian Government should bail them out by making it a Crown Corporation again from the public purse. Sorry, I for one wouldn't be at all interested in that proposition. (But that's just me) We're all paying far to much tax as it is and not getting a helluva lot in return. Buying an airline isn't going to give the taxpayer a great ROI, period. As for Foreign Ownership....25% is more than enough. Besides, who says a foreign company can do a better job and become a greater success in a market they don't fully understand and aren't used to competing in? I'm afraid in the Capitalist world we live in, occasionally, companies just can't always do what they do best. That's not news, that's just the way it is. It's fun to throw bards at the MPs though. That's great sport. So, as the Airline Industry gets sucked further down the drain our MPs waffle over the definition of marriage. Gawd help us if they don't have greater battles to fight. Link to comment Share on other sites More sharing options...
Guest Patrick Bergen Posted September 19, 2003 Share Posted September 19, 2003 I appreciate the sentiment of your posting. I agree that AC should not be a crown corporation and quite frankly foreign investors can certainly skirt the 25% rule. According to IATA, Canadian government fees are some of the biggest out there. The airports have no airline representation on their boards and thus are able to increase improvement fees at will. The thing that prompted my initial post was the fact that Collenette had already decided for Air Canada that they would not be asking for a change to the 25% rule. He publicly declared this prior to AC even making up its mind. I would say that AC long ago learned to stay well clear of Collenette and did not ask for financial assistance with CCAA and I doubt will want to get tangled up with this government on changing the rule. The man is bad for the airline industry. Link to comment Share on other sites More sharing options...
dagger Posted September 19, 2003 Share Posted September 19, 2003 "The man is bad for the airline industry." Amen... The man has either presided over, or failed to mitigate, some egregious crimes. 1. Airport divolution. The rents charged by the government to local airport authorities are based on the concept of accelerated recovery of the original taxpayers investment. No matter that at airports like Dorval or Pearson or Edmonton the government hadn't invested a dime in dilapidated facilities and you would be forgiven for thinking that the facilities had been paid for decades earlier. These onorous/usurous fees and rents are the single largest element of cost inflation in the airline industry in Canada. Think about it - the value of aircraft has come down, average wage rates in the industry have come down, even fuel has peaked and is on its way down but the government refuses to lower the rents it charges. Like EI, airport rents are one of the cash cows on which the Liberals have come to count on to deliver budget surpluses. 2. The 1999 takeover attempt by Onex/American Airlines. The government specifically amended competition policy to allow a Schwartz/Carty lowball bid to go forward so they could get the file out of the way before an election. The offer was crafted to assume amendments to the Air Canada Act that would include the waiving of the 15% ownership limit. The perception of Onex/AA being a privileged or government blessed bidder meant that other outside bids weren't viewed as possible and none came forward. Without a change in the 15% rule, the takeover attempt was D.O.A. Somewhere along the line, either because Milton and the AC shareholders (like me) objected to am initial $8.22/share takeover price that was half of what we ultimately received, the feds got cold feet. Or maybe it was the resistance of AC employees, or the spectre of Canadians flying to Europe via Chicago or Tokyo via Dallas. Whatever. The thing didn't go through quickly, AC filed the inevitable appeals, a Quebec judge made the only ruling that was possible under law - the law was perfectly clear. (I have always felt that somebody was double-crossed on this - either an AC director let Schwartz think beforehand that his initial offer would be accepted by the AC board, or the government double-crossed him Schwartz.) I never believed that this was all set up to fail on the obvious ruling by a Quebec judge that the law prevented the kind of ownership AC shareholders were being asked to vote on. I won't even get into the question of whether the government bullied AC to make a takeover offer for CP, as opposed to just letting it fail. I believe it suggested to AC that life would be hell for it if CP failed. 3. The Security Tax. Everyone knows the issue here. Highest fee in the world, security perhaps a little better than propr to Sept 11, 2001, but not much. Tens of millions if not hundreds of millions of dollars being appropriated by the government's general fund. Severe damage inflicted on air travel during a weak market period. 4. Rail policy. While screwing air travellers, he is an arch-advocate of building a high speed rail system. While the airline industry is bled to the tune of hundreds of millions of dollars in fees, taxes and rent - that's hundreds of millions of dollars in excess of the money required to pay for the few paltry services that the feds still render commercial travel - Via Rail is a corporate welfare bum, and a heavily subsidized competitor for short-haul carriers. 5. The Air Canada Public Participation Act. There may never have been a rationale for the obligations placed on AC - like having to have four maintenance bases in designated locations, a political sop to local communities - or a headquarters in Montreal, but now that Westjet has attained critical mass and Quebec has two more airlines (Transat and Jetsgo) and Atlantic Canada has Canjet, I can't think of a single reason why the obligations under the ACPPA continue to exist. Not one. 6. While not specifically advocating the construction of a fixed link to Toronto Island Airport, he is in the position to quash it. And doesn't. Why does Toronto need an inner city airport when $4 billion is being spent on expanding Pearson. And how does the minister rationalize building a high speed rail line to Pearson when he is allowing a competiting airport to siphon off some traffic. I predict that the DeLuce Dash 8 airline at Toronto Island will be a failure of cosmic proportions that will somehow leave Toronto taxpayers holding the ball. It is so obvious that the project is doomed that it should be stopped. I don't expect stupid municpal politicians to know this - they think they are getting a money-making airport in exchange for a $15 million bridge. But Collenette knows better, and is allowing this travesty to proceed. I can go on and on, he's "Best Before" date is way past. Surely there must be a hell hole on earth hideous enough where Martin can send David and Penny as a reward for their contributions. Link to comment Share on other sites More sharing options...
Guest Gino Under Posted September 19, 2003 Share Posted September 19, 2003 He's definitely not helping the airline industry. I think you'll find AC will not only be viable in it's re-invented LCC-self (although this LCC epidemic seems to be the present answer, I don't think it's the long term answer) they are likely to find the capital investment they need to survive. Okay. Well, let's see if I can find a rope around here. There's more than just Collenette we can hang (figuratively speaking) ( Link to comment Share on other sites More sharing options...
Guest carbheat Posted September 19, 2003 Share Posted September 19, 2003 Dagger On the topic of the Island Airport (which is going forward)... "It is so obvious that the project is doomed that it should be stopped." What is so obvious? Is a plan with an new Terminal with easy access to the Toronto core doomed to failure? I wouldn't under-estimate Bob's abilities to make a low cost, short haul, minimum hastle, business class airline work. Why would everyone continue to take the extra 45-60 minutes to go from downtown to YYZ if they could get to the Island in 15 minutes or less, and fly at a lower cost? Air time would be the same. Link to comment Share on other sites More sharing options...
Guest Nozzle Posted September 21, 2003 Share Posted September 21, 2003 That's FUNNY.... (h) Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.