Air Canada serves lockout notice to pilots

[bizaro86]

Originally Posted by NBC

you'd be a half step away from a captive market which could see fares from YYC-YYZ effectively double.

Your assertion is that if fares were to double, nobody would buy the air canada planes out of the bankruptcy court or take over the leases, or get some other planes and start a new airline?

Also, as to your point about going to Sao Paulo via Denver and Mexico City, that's ridiculous. Right now Air Canada will fly anyone not in YYC/YVR to Sao Paulo via Toronto. (ie, 1 stop)

Last summer I flew United to Sao Paulo with one stop via Chicago. There are also one stop options via Houston (formerly continental, now United) and Dallas (AA). So if Air Canada wasn't around we'd fly to Sao Paulo in one stop, exactly the same as now.

If Air Canada cancelled the flights from Calgary to Frankfurt, it would take Lufthansa about 15 minutes to restart their flight. If Air Canada cancelled the flights from Calgary to London, British Airways would increase and/or Virgin Airways would start up service. We'd get enough foreign lift to hold us over until a domestic airline got started up again.

[valo403]

Originally Posted by bizaro86

Your assertion is that if fares were to double, nobody would buy the air canada planes out of the bankruptcy court or take over the leases, or get some other planes and start a new airline?

Also, as to your point about going to Sao Paulo via Denver and Mexico City, that's ridiculous. Right now Air Canada will fly anyone not in YYC/YVR to Sao Paulo via Toronto. (ie, 1 stop)

Last summer I flew United to Sao Paulo with one stop via Chicago. There are also one stop options via Houston (formerly continental, now United) and Dallas (AA). So if Air Canada wasn't around we'd fly to Sao Paulo in one stop, exactly the same as now.

If Air Canada cancelled the flights from Calgary to Frankfurt, it would take Lufthansa about 15 minutes to restart their flight. If Air Canada cancelled the flights from Calgary to London, British Airways would increase and/or Virgin Airways would start up service. We'd get enough foreign lift to hold us over until a domestic airline got started up again.

Nm, I was out of it on that one apparently

[Bigtime]

Originally Posted by valo403

You missed the point. You would have to take single flights on multiple carriers to achieve the same result. West Jet has no relationship with Star Alliance or OneWorld, so you're looking at a one way ticket to a US WestJet destination, pick up your bags, check in etc. a round trip from that location to Sao Paulo (assuming it's offered), pick up your bags check-in etc. and another one way to your origin. And god forbid there are any issues with delays.

Why couldn't they just take United, Delta, or American? That would save the hassle that you are referring to.

[valo403]

Originally Posted by Bigtime

Why couldn't they just take United, Delta, or American? That would save the hassle that you are referring to.

Ha, yeah I totally blanked on that. I was thinking that those carriers wouldn't be able to do the flight as it's non-US international, but with a connection in the US of course they could. Retracted.

[NBC]

I don't think that it would be as easy as Willie Walsh or Richard Branson stepping in and saying that they were going to pick up the slack left by Air Canada's departure from particular routes. This is a much more nuanced issue. While it could be feasible for someone to enter into the YYC-LHR route as AC has one flight daily, AC operates four daily flights from Pearson to Heathrow, BA two and Virgin Atlantic don't operate. A number of major routes originating in Canada would be under-serviced and to think that someone else would just step into the void created by Air Canada's demise is overly simplifying things.

The easiest and most cost-effective way of starting up an airline, as Southwest, Ryanair, and West Jet have shown, is as a regional carrier. Smaller aircraft, less fuel, fewer flights, maintenance and service crews and a whole host of other factors make this the reality. I quoted Warren Buffett a few posts ago where he mentioned 129 airlines since 1992 that have filed for chapter 11 - and a good deal of the ones that did were full-service carriers.

I do agree that other national carriers could step into markets/routes if we had an open skies policy, but we don't. And to expect someone to buy a dozen 777's and fly to Tokyo, Hong Kong, London, Rome and Buenos Aires and all stops in between, well, I just don't see that happening. However Air Canada re-emerging with a new board of directors, new (fair, equitable and profitable) union contracts, and a refocused set of routes/markets served, is probably the best bet for continuing to serve the Canadian aviation market.

[sa226]

Regardless if they should, I don't the Air Canada brand is going anywhere.

Even though terrible management is part of it their losses also have to do with being unable to directly compete on any routes and make any money.

One could make the argument that the southwest airline model is partly responsible for the state of the airline industry.

You can fly from Calgary to Toronto for 300 bucks. 300 dollars!!? You can sit in a chair in the sky and drink coffee for 4 hours for 300 dollars. That in many ways is absurd. But Westjet has found a way to do that and be profitable. That is commendable. Air Canada on the same route has to charge the same, but can't make any money doing it, because they aren't on the low cost model.

Over the past 20 years the traveling publics perception of what it costs to fly has changed dramatically and that isn't Air Canadas fault.

What is disturbing on Air Canadas side of things that even after their first bankruptcy, they still haven't figured out that they need to restructure their model from the ground up to be successful. Instead they want to slash salaries, eliminate pensions, eliminate benefits, all the while paying 20 different managers 2 million plus, and not take responsibility for a 2 million dollar fuel hedging mistake.

There are first officers at Westjet that make more than junior captains at Air Canada. Due to completely different ways in which the pilots at either airline is compensated, it is kind of unfair to compare them, but that is the reality.

I fly standby quite often on both Air Canada and Westjet so I have a bit of an idea on what loads are like on competing routes. 80 percent of the time there are more seats available on Westjet than Air Canada.

[bizaro86]

Originally Posted by NBC

And to expect someone to buy a dozen 777's and fly to Tokyo, Hong Kong, London, Rome and Buenos Aires and all stops in between, well, I just don't see that happening. However Air Canada re-emerging with a new board of directors, new (fair, equitable and profitable) union contracts, and a refocused set of routes/markets served, is probably the best bet for continuing to serve the Canadian aviation market.

In 2002 Swissair liquidated. It's regional affiliate bought the airplanes/gates and started an airline of similar size, known as Swiss. Is there a reason you can think of why one or more of Jazz/Transat/Westjet wouldn't buy AC's planes and start service to many longhaul destinations?

[bizaro86]

Originally Posted by NBC

The easiest and most cost-effective way of starting up an airline, as Southwest, Ryanair, and West Jet have shown, is as a regional carrier. Smaller aircraft, less fuel, fewer flights, maintenance and service crews and a whole host of other factors make this the reality. I quoted Warren Buffett a few posts ago where he mentioned 129 airlines since 1992 that have filed for chapter 11 - and a good deal of the ones that did were full-service carriers.

I do agree that other national carriers could step into markets/routes if we had an open skies policy, but we don't.

The biggest thing is that the market wouldn't stay the same without Air Canada. Westjet could easily buy larger planes (they have a higher market value than Air Canada and a better credit rating) and start service to international markets, and they would if they thought it'd be profitable. There is also international precedent for that, with LCCs like Virgin Blue, Air Asia and Air Berlin flying long range jets.

International airlines won't fly domestic routes, I'm not talking about cabotage here. However, they would step into the gap initially. Maybe not replacing all flights to LHR (eg), but some, enough to keep things moving.

[bomber317]

Not having any inside knowledge of how AC is run and being color by the media, I get the impression that labour costs are holding the company back. By both unions and management.

And with the workers giving up concessions during the recession, it appears that there is resentment toward management not doing their part. So instead of working together, everybody is looking out for themselves.

Is that essentially what is going on?

[valo403]

Originally Posted by bizaro86

The biggest thing is that the market wouldn't stay the same without Air Canada. Westjet could easily buy larger planes (they have a higher market value than Air Canada and a better credit rating) and start service to international markets, and they would if they thought it'd be profitable. There is also international precedent for that, with LCCs like Virgin Blue, Air Asia and Air Berlin flying long range jets.

International airlines won't fly domestic routes, I'm not talking about cabotage here. However, they would step into the gap initially. Maybe not replacing all flights to LHR (eg), but some, enough to keep things moving.

Sure they could, but it wouldn't be as easy as just buying larger planes, they'd have to completely revamp their company. WestJet has been built on a very specific model, when you build a company that way a large scale change of this sort becomes incredibly difficult to implement.

[NBC]

Originally Posted by bizaro86

In 2002 Swissair liquidated. It's regional affiliate bought the airplanes/gates and started an airline of similar size, known as Swiss. Is there a reason you can think of why one or more of Jazz/Transat/Westjet wouldn't buy AC's planes and start service to many longhaul destinations?

They currently have roughly 80 aircraft whereas Air Canada operate 205. This is a completely different ballgame. Plus Swiss International Air Lines was bought by Lufthansa Group in 2005, 3 years after emerging from the Swiss Air mess. I'd think that the biggest reason why it would be difficult to see this scenario through is the size of Air Canada as an air carrier. It is a much larger entity than Swiss air ever was. I just can't foresee a much smaller regional carrier like the ones mentioned, able to come up with the money and business plan to take over and run Air Canada to a decent profit. The difficulties run too deep there. And ultimately there isn't enough money to be gained by a regional like West Jet moving into full-service. I think that their shareholders wouldn't approve.

[ken0042]

Originally Posted by NBC

They currently have roughly 80 aircraft

Just to clarify- is that the Swiss airline or WestJet?

If not WestJet- do you happen to know how many aircraft WJ has? Just curious.

Edit- I just found it. WestJet has 97 planes; and hopes to have 135 by 2018. http://www.westjet.com/pdf/investorM...rFactSheet.pdf

[Flames in 07]

Originally Posted by sa226

http://www.cbc.ca/news/business/stor...da-strike.html

I don't know if anybody has been following the labour strife at Air Canada, it has been ongoing for quite some time. If anybody has a fleeting interest in it I encourage you to do some reading rather than believe the posturing and politics in the media.

But shiat just got real.

May want to have backup travel plans.

The Harper government's crushing of labour, combined with a bloated and hostile Air Canada management that blames its workforce rather than encourages it has all lead to this.

I love my job, but the way this industry is going down the toilet makes me want to be a truck driver.

"Whats the name of that truck driving school? Truck master I think it is, I might need that"

Maybe they can peg the equivalents at WJ to compare how well those poor AC employees are doing. Pilots aside it is all unskilled labor, and they are the most entitled workforce I have ever seen.

[Ryan Coke]

I would say bizaro86 has the most accurate take on this. If AC were to liquidate, there would be a short and difficult transition but very quickly the void would be filled in several ways. Having said that, WestJet does not want AC to disappear. Competition is a good thing, and AC makes a good competitor (high costs, dysfunctional labor relations).

Westjet already has several codeshares and interlines with several airlines including Delta, American, Cathay, Air France/KLM, and a bunch of others that I can't recall right now. Getting larger aircraft (787s likely) is part of the long term plan, but getting any new type is a complicated process, and you can lose money fast with 150 million dollar aircraft if you do it wrong (vs. 50 million for a 737).

Also, as much as I have little love for AC, they have not gotten government money since they were privatized. Loan guarantees, yes, but no direct money. In this case they are getting the government to take away the employees ability to strike which is just as valuable. There will be no work stoppage at AC in the foreseeable future, the government has made that clear.

[Ryan Coke]

Originally Posted by GP_Matt

The last time I flew Westjet it was for a ski trip. I had booked and prepaid for three days of skiing but Westjet canceled all flights the day I was leaving due to weather so I had to leave the next day. My flight went through Edmonton and that portion was still on time which means I had time to drive to Edmonton to pickup the rest of my flight but rather than cancel they just posted a delayed notice on the board and left it up well after they started telling passengers that the flight was canceled and making arrangements. I didn't think it was a big deal, I would just stay an extra day on the back end of my trip to get all my skiing in so I called WS to delay my return flight by 24 hours. They insisted on a full change fee as the delay only affected the outbound portion of my trip which means they wanted the penalty as well as the difference in price between what I paid and what they were selling the fare for three days in advance. I got a seat sale when I booked so the new price was double plus the penalty. I spent two hours on the phone with them trying to convince them that they had in fact inconvenienced my entire trip, not just the outbound portion.
As a side, when I mentioned that Air Canada had all their flights leaving on time that day and it was only WS heavier 737's that were canceled he told me that AC was flying because they didn't care about passenger safety.

tl;dr I think both airlines have some crappy employees and some great employees.

Did you end up having to pay full change fees and fare diff? Sorry to hear about that, it shouldn't have happened. How long ago was it? As you said, there are good and bad employees everywhere, sometimes it is better to try to talk to someone else, or just escalate the issue to someone higher up.

Sorry this was not handled as well as it should have been.

[killer_carlson]

There is some federal legislation benefitting Montreal that pertains to air Canada.

I think that should be looked at as well

[NBC]

Originally Posted by bizaro86

There is also international precedent for that, with LCCs like Virgin Blue, Air Asia and Air Berlin flying long range jets.

The problem with this is that Virgin Australia (Blue) are a subsidiary of Virgin Atlantic a larger and more profitable carrier and the long-haul routes they fly are limited to Los Angeles, Johannesburg and Abu Dhabi. It is still largely a regional carrier.

Air Asia has been a top low-cost carrier in the Asia-Pacific region, but they, like West Jet, operate one type of aircraft, Airbus A320-200. They have clearly based their business model on Southwest's, which so many profitable airlines have done. It terms of destinations, London and Paris, their two longest-haul flights will be terminated at the end of March this year, due to lack of profitability. the A320-200 is too small of a plane to operate on long-haul (8+hr) flights.

Air Berlin presents another interesting example. Since they expanded their business in 2007, they have yet to turn a profit, with a net loss of 100 million euros in 2010. They operate eight different types of aircraft with orders for 18 dream liners. They offer flights to a number of long-haul destinations in North America, Asia and Africa where they fly their A330's. Since taking over LTU in 2007, they expanded their fleet size, non-European routes and doubled their workforce. I'd say that their business model is much more like a full-service carrier than a low-cost regional. Their bottom line says as much.

---------
My sense is that if Air Canada ceased to exist, it is a little more complicated than just having someone buy a bunch of new planes and pick up the slack left by AC's departure. Air Canada is by all means a large airline, and the effects of its departure could be profound, especially in places like Vancouver and Toronto where there are an awful lot of international destinations served that simply could not be 'picked up' by other carriers due to the number of flights/routes served. Calgary would remain less affected as the other two, but their hub cities would remain under-serviced for sometime.

[GP_Matt]

Originally Posted by Ryan Coke

Did you end up having to pay full change fees and fare diff? Sorry to hear about that, it shouldn't have happened. How long ago was it? As you said, there are good and bad employees everywhere, sometimes it is better to try to talk to someone else, or just escalate the issue to someone higher up.

Sorry this was not handled as well as it should have been.

They ended up dropping the price to roughly the value of the credit they gave me for canceling the flight. The guy on the phone was quite the ###### though, in the end he really made it seem that he was just agreeing with me because I was being a pain in the ass. Saying something like, whatever, you are wrong but I will do it for you this time. It was easily two hours spent on the phone with them though which only happened because I had a canceled flight and nothing else to do. This was a little over a year ago.
As an aside, I haven't been avoiding WS since them, I have flown with them a few times this year but do consider the importance of the flight knowing that their heavier planes can't always land in Grande Prairie due to weather. (That should all be fixed when they finally expand our runway) On the same token, AC often doesn't have room for everyone's bag on their Dash-8's so it is pretty common for them to hold back some of the luggage and I have heard send it down in a van later.

[Ryan Coke]

Glad that it worked out, not right that it didn't happen much easier.

[pylon]

Silly little story about why I believe Westjet is so successful.

In 2000, I had to attend a funeral on short notice in Vancouver. I was flat broke at the time, and was calling around to get a deal on a flight. I was too stubborn or proud to ask for help from anyone. Called AC, asked about bereavement rates, and they had no interest in helping me at all. I called Westjet, and when the $320 rate was still more than what I could afford (which was $150 return), I said "That's too bad, I can't afford it." Before I could hang up the agent said "Just give me a couple minutes." put me on hold, talked to her supervisor, and came back with a booking number for me also making sure all taxes were covered as well for the $150.

That is the type of service that wins you a customer for life, and 12 years later I am still grateful for the gesture. Now that money isn't an issue it is why I will fly with Westjet every single time there is a flight with them where I am going, even if it costs a few more bucks.

Once you let unions into your company, customer service is the first thing that flies out the window, and just like the auto industry, the antiquated belief, that unions are necessary in todays work force, is going to run AC into the ground, yet again. That and bloated management salaries for a bunch of under performing, useless cronies.