Air Canada buying Jazz?

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Rumors
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Air Canada buying Jazz?

#1 Post by Rumors » Sun Aug 11, 2013 4:13 pm

Anyone else heard this rumor?
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altiplano
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Re: Air Canada buying Jazz?

#2 Post by altiplano » Sun Aug 11, 2013 6:02 pm

There is no way that would happen.
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Re: Air Canada buying Jazz?

#3 Post by Mône » Sun Aug 11, 2013 6:24 pm

Why not? It certainly wouldn't be good for jazz's employees. But the market cap has fallen to 260-270M which is certainly in the right range for a hostile takeover. What better way to control your costs than to own your feeder? Then you just sell out all assets, let the company die, put 5000 people out of work and farm out the work to whoever will be willing to work for walmart wages.
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Re: Air Canada buying Jazz?

#4 Post by DHC-1 Jockey » Sun Aug 11, 2013 7:20 pm

Rumors wrote:Anyone else heard this rumor?
This from the guy who signed up for Avcanada less than 4 hours ago and has already posted in the AC and WJ forums asking about hiring requirements. I'd like to know what his sources are for this "rumour." Don't feed the troll.
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Re: Air Canada buying Jazz?

#5 Post by Rumors » Sun Aug 11, 2013 9:19 pm

What troll?

What are you taking about?

I heard it from Calin's hairstylist.

Who cares where I heard it from. I'm just starting a topic on this thread so we can all exchange comments.

I really like avcanada.ca. I come on here all the time and I've finally joined and wanna talk about some stuff.

If that's being a troll then so be it.
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altiplano
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Re: Air Canada buying Jazz?

#6 Post by altiplano » Sun Aug 11, 2013 9:38 pm

Why not? When the CPA ends they can walk away from Jazz and their high costs so why buy them and their pension liabilities? Look at the regional model in the US and that is the future of regional feeders in Canada. After costs get too high they will lose the flying, close up, shift airframes and restart down the road with year one pay and new lower cost, no pensions, reduced benefits.
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Re: Air Canada buying Jazz?

#7 Post by YYCAME » Mon Aug 12, 2013 10:48 am

Jazz doesn't have a pension system like AC so no more liability there then any other company that matches contributions up to a certain percentage etc. It seems a little far fetched but big business do love their monopolies and maybe there is money to be made in parting out Jazz to other bidders and keeping the routes with a monopoly still. Costs should be higher with Jazz because of the exclusivity of the CPA though, because it prevents them from making money selling seats/charters to Westjet etc. I think the reality though is that Air Canada will just grow Sky Regional as a competitor to pit against Jazz and try to drive down CPA costs or at least reduce reliance on them in future bargaining.
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Re: Air Canada buying Jazz?

#8 Post by Rumors » Mon Aug 12, 2013 3:04 pm

altiplano wrote:Why not? When the CPA ends they can walk away from Jazz and their high costs so why buy them and their pension liabilities? Look at the regional model in the US and that is the future of regional feeders in Canada. After costs get too high they will lose the flying, close up, shift airframes and restart down the road with year one pay and new lower cost, no pensions, reduced benefits.
You really think they can shut Jazz down and walk away when the CPA ends and give the work to someone else?

Wouldn't that be a logistical nightmare?
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Re: Air Canada buying Jazz?

#9 Post by Big Pistons Forever » Mon Aug 12, 2013 3:57 pm

altiplano wrote:Why not? When the CPA ends they can walk away from Jazz and their high costs so why buy them and their pension liabilities? Look at the regional model in the US and that is the future of regional feeders in Canada. After costs get too high they will lose the flying, close up, shift airframes and restart down the road with year one pay and new lower cost, no pensions, reduced benefits.
I find it sad that so many pilots do not seem to be willing to understand the industry that employes them.

The mainline/ regional relationship that exists in the US is the model that Air Canada is clearly following. That sadly makes Jazz the Canadian " Comair " and Sky Regional the Canadian " Pinnacle "

We are just starting the WAWCON race to the bottom that has resulted in US airline jet FO's making 17 K a year.......
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Re: Air Canada buying Jazz?

#10 Post by kingtwo » Mon Aug 12, 2013 10:03 pm

If Air Canada bought Jazz back would it not open the doors for a common employer case?
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Re: Air Canada buying Jazz?

#11 Post by prop2jet » Tue Aug 13, 2013 1:16 pm

I think the Common Employer issue was already settled and not recognized. The rumour is just that, however there may be shades of truth to it.

The sole reason to acquire Jazz/Chorus would be to stem the balance of CPA cost going forward. That would be long term planning, and who in this industry plans that far ahead? Another issue would be one of where AC gets the money to acquire CHR when they sought an extension to the pension obligations.

We will probably have a better idea of where things are going once the rate arbitration is settled. No matter how you look at it, the outcome for CHR is loose loose. Sadly, leadership is lacking at CHR as they insist on bighting the hand that feeds it.
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Re: Air Canada buying Jazz?

#12 Post by kingtwo » Tue Aug 13, 2013 4:20 pm

I disagree, I think chorus will be ok. We have a solid CPA until 2020. We are 1500 pilots strong and just because Joe sends out his semi-annual email telling us how expensive we are does not mean we are just going to roll over and take garbage bottom feeder skyregional/encore wages. The solution is to have jazz fly larger equipment for the same cost and drop the smaller equipment to the tier 3 carriers. More Q400s, 705's and perhaps even the E195's in 2016 when the ACPA agreement is over and scope can be opened up.
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Re: Air Canada buying Jazz?

#13 Post by Franky Jr » Wed Aug 14, 2013 5:56 pm

From AC's point of view it could make sense.
-Sell Jazz off in '06 for 1B.
-Rebuy Jazz in '13 for 300M.
Also Jazz makes like 100M a year off the CPA, AC could pocket that money annually.
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Re: Air Canada buying Jazz?

#14 Post by teacher » Thu Aug 15, 2013 5:18 am

Depending What AC wants out of their T2 lift it could make sense. Control over costs and service would be a big bonus for AC. Elimination of the mark up, dividend, board of directors, some management and uncertainty of dealing with another company would all be a bonus for AC. Some claim that all AC wants is to farm out as much flying as possible, however, when that is done you lose ALOT of control over the product. Is control worth more than the money? Who knows. One would have to compare the costs versus output of Both Jazz and Sky Regional to find out.

Either way, time will tell. This rumour is not knew and was addressed a little while back by people higher up than me.
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Re: Air Canada buying Jazz?

#15 Post by Rumors » Thu Aug 15, 2013 5:24 pm

I'm not a finance guy but I'm sure there are some pilots on here who are.

Wouldn't it cost a lot more then the market cap to purchase Jazz?

Aside from the Pension obligations does Jazz not have a lot of debt?

Isn't that what sank Air Canada when it bought Canadi>n?

Didn't Canadi>n have a lot of debt?
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Re: Air Canada buying Jazz?

#16 Post by Joe Blow Schmo » Thu Aug 15, 2013 7:58 pm

prop2jet wrote: No matter how you look at it, the outcome for CHR is loose loose.
Well tighten it then!
Sadly, leadership is lacking at CHR as they insist on bighting the hand that feeds it.
I didn't realize Chorus had terraforming skills. Why the heck are they in the aviation business? They could make far more money terraforming.
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Re: Air Canada buying Jazz?

#17 Post by kingtwo » Sun Aug 18, 2013 8:46 pm

found this gem on an investors blog.
there is no smoke without fire...rumour now wants jazz to be integrated to Rouge thus solving pilots shortage problem and reducing training cost at AC as well as speeding things up to get Rouge up and running on afterburners.
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Re: Air Canada buying Jazz?

#18 Post by Old fella » Mon Aug 19, 2013 8:56 am

kingtwo wrote:found this gem on an investors blog.
there is no smoke without fire...rumour now wants jazz to be integrated to Rouge thus solving pilots shortage problem and reducing training cost at AC as well as speeding things up to get Rouge up and running on afterburners.

As somebody told me 30+ yrs. back, if one had a dime for every rumour/buyout/transfer/acquisition/fleet purchase and down grade/layoff and hiring/new start-up, one would have one f--- of a pension after yer time is up in this business.
Hasn’t changed at all………


:wink:
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Re: Air Canada buying Jazz?

#19 Post by kingtwo » Thu Aug 22, 2013 11:36 am

Around the 4 min mark of this interview Calin says
We are looking at different strategies with respect to our partnership with Jazz

http://bnnhdpmd.akamaihd.edgesuite.net/ ... ive_04.mp4
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Re: Air Canada buying Jazz?

#20 Post by DH772 » Thu Aug 22, 2013 12:40 pm

there is no smoke without fire...rumour now wants jazz to be integrated to Rouge thus solving pilots shortage problem and reducing training cost at AC as well as speeding things up to get Rouge up and running on afterburners.
This wouldn't solve anything. Even if there was a shortage to fill Rouge seats, merging the two lists would only leave the regional seats open. So how does this solve anything? I think a merge would be stupid. From an AC standpoint no good would come from doing so. Wouldn't benefit anyone from AC side. Lets hope that doesn't happen!
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teacher
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Re: Air Canada buying Jazz?

#21 Post by teacher » Thu Aug 22, 2013 12:44 pm

Pretty vague. That could mean anything I guess. Strategies to bankrupt Jazz? Strategies to work with Jazz? Interesting though that he took the time even in this short interview to single out Jazz, for better or for worse. Time will tell :smt102
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rudder
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Re: Air Canada buying Jazz?

#22 Post by rudder » Fri Aug 23, 2013 7:11 am

teacher wrote:Pretty vague. That could mean anything I guess. Strategies to bankrupt Jazz? Strategies to work with Jazz? Interesting though that he took the time even in this short interview to single out Jazz, for better or for worse. Time will tell :smt102
For better? I don't think so.

Think AVEOS. Not the bankrupt version but rather the version that AC wanted - cheaper and smaller.
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Re: Air Canada buying Jazz?

#23 Post by biatch » Fri Aug 23, 2013 11:01 am

That's probably right Rudder. And they will achieve both thru bigger aircraft.
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Re: Air Canada buying Jazz?

#24 Post by Fanblade » Fri Aug 23, 2013 11:10 am

teacher wrote:Pretty vague. That could mean anything I guess. Strategies to bankrupt Jazz? Strategies to work with Jazz? Interesting though that he took the time even in this short interview to single out Jazz, for better or for worse. Time will tell :smt102
Not so vague. Keep listening past where Jazz is mentioned.

"We have a lot of drivers here for innovation and to reduce the cost structure ultimately"

Cost reduction drivers mentioned. Rouge, 175's to SR. High density 777.

Tacked on the end of drivers to reduce costs "different strategies with respect to our partnership with Jazz"
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Re: Air Canada buying Jazz?

#25 Post by Fanblade » Fri Aug 23, 2013 11:18 am

biatch wrote:That's probably right Rudder. And they will achieve both thru bigger aircraft.
Certainly larger aircraft will drop CASM.

But Chorus is paid by the block hour and has a minimum block hour guarantee. It doesn't matter if you fly 172's or 747's. The block hour guarantee is the same.

The only way to make Jazz smaller is with less block hours. Correct?
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