Daniel Cooper wrote: ↑Wed Apr 01, 2020 10:25 am
I think the rumours of Rouge's death have been greatly exaggerated.
I think that if the Transat acquisition proceeds Rouge is done. If it doesn’t proceed Rouge will continue. Economic uncertainty will only serve to highlight the importance of lower cost to management. It will be one or the other. Rouge or Transat. Not both. Not neither.
Here is a copy and paste from the previous page.
Question 1. Why no reference to the 700miliion capital expenditure for Transat?
Question 2. Why no mention of the Transat acquisition anywhere in the conference call summary?
Question 3. Where is the several hundred million savings in capital expenditures coming from?
· As at Q4/19, Air Canada planned $2.4 billion in capital expenditures for 2020,
approximately 50% of which is for aircraft (17 A220s and six 737 MAX). The
company still plans to accept delivery of these aircraft, and has debt already
secured for the A220 purchases. Assuming the 737 MAX grounding is lifted, and
Air Canada takes delivery, we believe financing will be secured. The remaining
50% of originally-planned capital expenditures have been reduced by several
hundred million dollars, implying that cash usage for capex in 2020, after
deducting financing inflows will be below $1 billion. Our forecast is for the
equivalent value to be approximately $850 million.
Outlook
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Last edited by Fanblade on Wed Apr 01, 2020 11:15 am, edited 5 times in total.
- A bid is a paper shuffle that can be altered overnight.
- The company will over down bid to remove as many activation dates as possible. - The down bid will force people left to right seat creating immediate saving to the company. Hint- DO NOT bid to change seats on type.
- The down bid will force many off base.
- The bid will show surplus.
I agree with most of what you have said. However, the activation date for pay purposes on a reduction does not occur until you are qualified in the new position.
So according to the contract, getting moved on paper does not equal a pay rate loss. Therefore no immediate savings to the company. I suppose what may save us for now, is there probably isn’t enough flying going on and restrictions on the flight ops building make it so that very few new courses can be run and completed right now.
1) There are a lot of pilots currently getting, or about to get, activation pay for their awarded position, while still on their previous type. Maybe an A320 CA not yet trained on the 787 because of the 737 grounding. A down bid that now shows them in their current qualified position wipes out that pay immediately. They might be senior to a 737 CA who did get trained to the 787 instead of leaving them grounded. Won’t matter. The senior pilot will take the $ cut. Might impact his pension. The junior pilot May or May not get trained back to the 737. If they don't, they keep 787 pay.
2) If you bid right to left seat on type. Or Right seat to RP on type it is a very short course. You make yourself an easy target for cost savings. Especially if there is a shortage in those positions like NB FO. Someone junior to you who bids to a different equipment type is less a target for cost savings.
It happens every time we have a large down bid.
Example. CA (A) ——A320 CA seniority number 3000—— CA (A) does not want to do a full course so he bids A320 FO. CA(B) ——-A320 CA seniority number 3001——- CA(B) bids A220 CA.
The company immediately does the short course on CA (A) but leaves CA(B) where he is. Why, because it is cheaper for the company, and our contract does not force training in seniority. That is what bypass pay is for. But on a down bid all protections are lost. Pay kicks in the second you do an LOE.
The following month CA(B) and the newly minted FO (A) have a pairing together. It makes for interesting conversation.
Mark my words......Every time
Your first point while true, is irrelevant as reference to the left to right seat.
Your second point is valid, but I think needs to be framed differently. The difference this time versus history, is that the flight ops building is basically closed, those on the 737 can’t be trained to from the left seat to right, since you need flying legs to accomplish that. And the company is planning on flying a 20% schedule with 80% or more of the pilot list still showing active. It think it will take a long time before they could work through that.
If this goes longer than September all bets are off. It is good advice though not to bid right seat to left on your qualified equipment. To protect against this.
My only point was that it isn’t immediate savings to the company simply by moving the name over on the list. Some of us are qualified in both seats for our jobs in training, most aren’t.
I agree with most of what you have said. However, the activation date for pay purposes on a reduction does not occur until you are qualified in the new position.
So according to the contract, getting moved on paper does not equal a pay rate loss. Therefore no immediate savings to the company. I suppose what may save us for now, is there probably isn’t enough flying going on and restrictions on the flight ops building make it so that very few new courses can be run and completed right now.
1) There are a lot of pilots currently getting, or about to get, activation pay for their awarded position, while still on their previous type. Maybe an A320 CA not yet trained on the 787 because of the 737 grounding. A down bid that now shows them in their current qualified position wipes out that pay immediately. They might be senior to a 737 CA who did get trained to the 787 instead of leaving them grounded. Won’t matter. The senior pilot will take the $ cut. Might impact his pension. The junior pilot May or May not get trained back to the 737. If they don't, they keep 787 pay.
2) If you bid right to left seat on type. Or Right seat to RP on type it is a very short course. You make yourself an easy target for cost savings. Especially if there is a shortage in those positions like NB FO. Someone junior to you who bids to a different equipment type is less a target for cost savings.
It happens every time we have a large down bid.
Example. CA (A) ——A320 CA seniority number 3000—— CA (A) does not want to do a full course so he bids A320 FO. CA(B) ——-A320 CA seniority number 3001——- CA(B) bids A220 CA.
The company immediately does the short course on CA (A) but leaves CA(B) where he is. Why, because it is cheaper for the company, and our contract does not force training in seniority. That is what bypass pay is for. But on a down bid all protections are lost. Pay kicks in the second you do an LOE.
The following month CA(B) and the newly minted FO (A) have a pairing together. It makes for interesting conversation.
Mark my words......Every time
Your first point while true, is irrelevant as reference to the left to right seat.
Your second point is valid, but I think needs to be framed differently. The difference this time versus history, is that the flight ops building is basically closed, those on the 737 can’t be trained to from the left seat to right, since you need flying legs to accomplish that. And the company is planning on flying a 20% schedule with 80% or more of the pilot list still showing active. It think it will take a long time before they could work through that.
If this goes longer than September all bets are off. It is good advice though not to bid right seat to left on your qualified equipment. To protect against this.
My only point was that it isn’t immediate savings to the company simply by moving the name over on the list. Some of us are qualified in both seats for our jobs in training, most aren’t.
The immediate savings from a down bid comes from wiping out activation dates and bypass pay. The longer term savings, 6-12 months out comes from down training. Yes it is longer term than tomorrow. But if the company is thinking this is a U shaped recovery they will be planning next summer right now.
That is one thing that changes in a surplus. You have enough bodies to run the airline and train expediently. Sim time becomes the only limiting factor. Albeit the sim restrictions bottleneck that in the short term.
Daniel Cooper wrote: ↑Wed Apr 01, 2020 10:25 am
I think the rumours of Rouge's death have been greatly exaggerated.
I think that if the Transat acquisition proceeds Rouge is done. If it doesn’t proceed Rouge will continue. Economic uncertainty will only serve to highlight the importance of lower cost to management. It will be one or the other. Rouge or Transat. Not both. Not neither.
Here is a copy and paste from the previous page.
Question 1. Why no reference to the 700miliion capital expenditure for Transat?
Question 2. Why no mention of the Transat acquisition anywhere in the conference call summary?
Question 3. Where is the several hundred million savings in capital expenditures coming from?
· As at Q4/19, Air Canada planned $2.4 billion in capital expenditures for 2020,
approximately 50% of which is for aircraft (17 A220s and six 737 MAX). The
company still plans to accept delivery of these aircraft, and has debt already
secured for the A220 purchases. Assuming the 737 MAX grounding is lifted, and
Air Canada takes delivery, we believe financing will be secured. The remaining
50% of originally-planned capital expenditures have been reduced by several
hundred million dollars, implying that cash usage for capex in 2020, after
deducting financing inflows will be below $1 billion. Our forecast is for the
equivalent value to be approximately $850 million.
Outlook
I don't actually know, but I would imagine that referencing anything with regards to Transat's acquisition falls under "forward-looking-statements" which as a public company is an illegal activity for them to part take in. For example, how could they guarantee 700 million for the capital expenditure of Transat, when many conditions are out of their hands such as Minister Garneau rejecting the deal? And so forth.
You can't influence people to start buying up TRZ stock with a statement guaranteeing expenditure when the terms leading up to the acquisition is out of your hands.
Maybe I'm wrong. I guess if you're looking at it as an AC pilot, you're trying to "read between the lines" that the deal will fall through because of their reduction of expenditure. If you're a Transat pilot, I guess you're looking at it differently, perhaps. But I doubt they would be indicating anything forward-looking regarding transat's acquisition, including a hint that somehow the reduction of several hundred million is cause they're not moving ahead with the purchase. Your guess is as good as mine though.
1) There are a lot of pilots currently getting, or about to get, activation pay for their awarded position, while still on their previous type. Maybe an A320 CA not yet trained on the 787 because of the 737 grounding. A down bid that now shows them in their current qualified position wipes out that pay immediately. They might be senior to a 737 CA who did get trained to the 787 instead of leaving them grounded. Won’t matter. The senior pilot will take the $ cut. Might impact his pension. The junior pilot May or May not get trained back to the 737. If they don't, they keep 787 pay.
2) If you bid right to left seat on type. Or Right seat to RP on type it is a very short course. You make yourself an easy target for cost savings. Especially if there is a shortage in those positions like NB FO. Someone junior to you who bids to a different equipment type is less a target for cost savings.
It happens every time we have a large down bid.
Example. CA (A) ——A320 CA seniority number 3000—— CA (A) does not want to do a full course so he bids A320 FO. CA(B) ——-A320 CA seniority number 3001——- CA(B) bids A220 CA.
The company immediately does the short course on CA (A) but leaves CA(B) where he is. Why, because it is cheaper for the company, and our contract does not force training in seniority. That is what bypass pay is for. But on a down bid all protections are lost. Pay kicks in the second you do an LOE.
The following month CA(B) and the newly minted FO (A) have a pairing together. It makes for interesting conversation.
Mark my words......Every time
Your first point while true, is irrelevant as reference to the left to right seat.
Your second point is valid, but I think needs to be framed differently. The difference this time versus history, is that the flight ops building is basically closed, those on the 737 can’t be trained to from the left seat to right, since you need flying legs to accomplish that. And the company is planning on flying a 20% schedule with 80% or more of the pilot list still showing active. It think it will take a long time before they could work through that.
If this goes longer than September all bets are off. It is good advice though not to bid right seat to left on your qualified equipment. To protect against this.
My only point was that it isn’t immediate savings to the company simply by moving the name over on the list. Some of us are qualified in both seats for our jobs in training, most aren’t.
The immediate savings from a down bid comes from wiping out activation dates and bypass pay. The longer term savings, 6-12 months out comes from down training. Yes it is longer term than tomorrow. But if the company is thinking this is a U shaped recovery they will be planning next summer right now.
That is one thing that changes in a surplus. You have enough bodies to run the airline and train expediently. Sim time becomes the only limiting factor. Albeit the sim restrictions bottleneck that in the short term.
Again I agree with most of what you are saying. In this case though, sim time is not the only limiting factor. So is aircraft time, so is the fact that the 737 remains grounded and training can’t be finished on it. IOE and OE. Sim restrictions are even tougher these days with the adjustments to sim schedules to allow cleaning and no mixing of crews between sessions. It is much less efficient.
As it stands they can only furlough by 600 pilots at least until September. It certainly can happen, but I think lack of resources and social distancing measures will create even more of a bottleneck that maybe hasn’t been contended with in the past.
Good discussion. Again though, my response was only in reference to.
The bid on the 7th will be ugly. Keep in mind.
- A bid is a paper shuffle that can be altered overnight.
- The company will over down bid to remove as many activation dates as possible.
- The down bid will force people left to right seat creating immediate saving to the company. Hint- DO NOT bid to change seats on type.
- The down bid will force many off base.
- The bid will show surplus.
Best case a few people wanna fly 6 mos from now. It will be years to get back where we were. The economy will be the dictator and the virus will slow the recovery. I’ll bet the concessions will sadly continue as we haven’t hit bottom yet.
Squid wrote: ↑Wed Apr 01, 2020 8:29 pm
Best case a few people wanna fly 6 mos from now. It will be years to get back where we were. The economy will be the dictator and the virus will slow the recovery. I’ll bet the concessions will sadly continue as we haven’t hit bottom yet.
Right now the virus is the dictator. We are on a COVID-19 timeline.
In the last few weeks - from personal experience:-
Amsterdam Schiphol Airport - 2 out of 5 piers open. All shops and restaurants groundside closed. It's a ghost town. One snackbar open airside. All lounges closed. Limited number of flights operating.
Aircraft parked everywhere including on one runway. The aircraft I was on was the only one moving.
I've never seen anything like it.
Lisbon - similar. Aircraft parked everywhere and almost deserted. looked like a limited number of flights are still operating.
Company advice is to stay in your hotel room. All meals via roomservice.
This is the unfortunate future with no end in sight.
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Always fly a stable approach - it's the only stability you'll find in this business
iflyroads wrote: ↑Wed Apr 01, 2020 8:10 pm
Buckle up. Hearing it could be a long bumpy ride for those furloughed at AC.
Upcoming bid will reflect this, and even more pain.
Sorry, I wish I had better news.
You seem to always have accurate info. Any other specifics?
Can't go into too much detail till after the bid comes out. But some of the 162 laid off were told to expect up to a year (spring 2021) if not more before a recall.
"Normal ops" expected to resume by next summer, and that's being optimistic.
