Cargo TA

[altiplano]

You talk a lot about, and base much of your argument on the Cargojet hourly wage, when in fact Cargojet guys actually make a monthly guarantee... and the Cargojet monthly guarantee is going to be more than Air Canada Cargo guys working a 75 hour block every month. They make that guarantee whether a block holder or reserve pilot.

Cargojet guys will make more money working fewer days than Air Canada Cargo guys.

And do you actually believe that? That corporate goals are to create pilot jobs? You must be kidding.

And that the company was going to park there entire part of the fleet that went to the LCC? And stop serving all the southern destinations, much of the US, and parts of Western Europe?

You need to think it out better. What are the real corporate goals! Growth, growth, growth and suppressing variable costs like employees. That's it, they don't give a shit if I do it or a CPA does it they only care that it gets done for less.

[Jimmy_Hoffa]

And just so it’s clear, you can have all the cargo available and all the planes available and pay zero dollars for fuel or services, but those airplanes and that cargo doesn’t move unless pilots make it move. We need to remember that.

-Jimmy

You can have all of the cargo available but there is not a single dollar that will be spent on pilot wages unless the corporation determines that the financial risk of doing this flying, modifying the aircraft at $14M + per aircraft is worth it.

And, for that matter, that applies to passenger flying too. You think you have the hammer with the company? You are deluding yourself if you think so. The corporation can take its toys away at the snap of its finger (79 aircraft getting parked this year) if it feels that doing that flying is not worthwhile. Another cliche.

All 79 fins that were parked already had an expiration date, covid just accelerated that. The EMJ was being replace by the A220, the 67 was being phased out at ML and rouge WB were going to be replaced or addressed going forward with the Transat deal. Not exactly as sinister as you make it sound.

So again, please explain how that ~$67/hour makes this great cargo venture such a great proposition for those possible 100 jobs. Pilots don’t have t hammer wirh the company nor did I even mention that as an argument, but clearly the licence provides some leverage.

$67/hr..... so far that’s the make or break point.

100 pilots @ 75 hrs per month with ~$67 savings for every 3 hours.(or less on a 2 pilot crew)...= 1,876,000 per year profit margin.. Compare that with $14M x 6 fins... $84M thankfully the pilot savings would pay that off in 40 years.... Solid business plan.

-Jimmy

[Fanblade]

Sceptical,

Clearly you believe employees should give to support a corporate goal. Where does that end?

Yes, I do - more often than not, personal goals align with corporate goals. If the corporate goal in this case is to create work from about 100 pilots that is a goal that should be shared with said pilots. If a corporate goal is to be profitable, that should be a goal shared by employees. Is anyone complaining about the profit share cheques that were handed out for many years?

This isn’t about not being willing to work with the company. We all should be pulling in the same direction.

The question was where does the idea of giving end. You didn’t address it. You clearly stated your willingness to work for less in pursuit of a corporate goal. How often do you believe we should offer to work at a discount? What do you think is going to happen if the company begins to realize your willingness to work for a discount?

Look at some of the consequences. We took cuts to create Rouge to compete with Transat and Westjet. It forced Transat into acquisition territory and Westjet to create Swoop. Currently Onex is trying to move as much to Swoop as they can. How long until we need to give again to compete with Swoop?

The cuts taken to create Rouge kept about 65 aircraft on the property that would have otherwise been gone.

That statement simply can not be substantiated. It assumes every route transferred to Rouge would have otherwise been abandoned. Do you honestly believe that? On the other hand if you do believe that statement, it explains why you would apply the same all or nothing logic again with the cargo LOU. I don’t buy any of it. I don’t think most do either.

It did not force Transat into acquisition territory whatsoever; and even if it did, so what? Corporate mergers happen all of the time in all sorts of industries for a whole bunch of reasons.

Actually the competitive pressure drove the stock price down. The lower stock price put Transat in acquisition territory.

So what you ask? We agreed to a Rouge discount with the knowledge Rouge would be used to put the screws to Transat and Westjet. It was successful. So successful it put them on the auction block and now we are merging with them. So successful Westjet’s competitive response was to create their own version of Rouge at an even greater discount. Swoop.

See the pattern? It’s tit for tat. Is that a cliche? One company gets a leg up on the competition from their employees? The competition wants the same from their employees. It puts pressure in the direction of reduced WAWCON. A union is an abysmal failure if they help an industry reduce WAWCON.

We should all strive to make exactly the same wage...wow, how socialist.

You seem to think unionism isn’t socialist. I see now why you are so confused. You don’t understand your roll.

ACPA’s job is the pinnacle of socialism within a capitalist system.

This is how ACPA defines its roll in the area of WAWCON.

https://acpa.ca/members/about-us.aspx

ACPA members constantly seek to improve our profession, working conditions, compensation and benefits — not just on behalf of our own member pilots, but also in support of our chosen profession.

That statement is unionization 101.

[Torontomaplelaughs]

There is no way a strategic decision like running a cargo op is in question because of 10% off the captain (thank you to flatpay...the gift that keeps on giving...)

It is amazing that due to Air Canada being successful for the last 6 years or so that the union has become a fanboy page of the corporation.

WestJet should take notes on how to break a union. Instead of intimidating pilots, just get management lackies & koolaid drinkers in the union, promise them a selfie with the CEO and voila...you get yourself a union that is scared of its own shadow and anemic to doing anything for its the membership & profession

[Lt. Daniel Kaffee]

It is an LOU not an MOA. Big difference.

Please explain...

[Tdicommuter]

LOU gets enshrined into the collective agreement forever. Think amendments to the US Constitution. Aka not originally in the document, but equally iron clad.

MOA is an agreement between the parties. Why did we use a covid MOA instead of an LOU. They are temporary measure for a certain time.

By using an LOU for the cargo we will allow NJA only get 12 days off a month. Bad!!?

[altiplano]

You have to wonder why they didn't just negotiate these concessions with the reopener?

Why are we making concessions for nothing...

[Sceptical]

Jimmy Hoffa:

Have a look at the Q1 (end of March) MD&A - the fleet plan showed 2 x A330's being added, 3 x A220's and one Rouge A320; next quarter the MD&A fleet plan shows the planned 5 x mainline B767's and 14 EMB's leaving AND 25 Rouge 767's and 6 x A319's leaving. There is simply no denying that COVID has lead to a reduction in the fleet, reduction in flying and hence reduction in jobs. With only 10% of the former flying being done, that means that 90% of the pilots are surplus. Either through deft negotiation or the realization that the organization cannot down train and up train fast enough that not more of the AC pilot group is not furloughed.

And while some of those fleet reductions (EMB particularly) were due to be replaced by A220's, the deferment and cancellations of the A220 and B737 orders does not bode well.

This statement really caught me eye: 100 pilots @ 75 hrs per month with ~$67 savings for every 3 hours.(or less on a 2 pilot crew)...= 1,876,000 per year profit margin.. Compare that with $14M x 6 fins... $84M thankfully the pilot savings would pay that off in 40 years.... Solid business plan.

Obviously you have never written a business plan before. For if you had, you would realize that the capital cost of modifying these aircraft would be amortized over the remaining life of the aircraft, probably about 20 years so the annual cost of the cargo conversion would be about $4 million or so per year. Operating costs such as reduced pilot costs would be realized year-in and year-out.

I have never claimed that the pilot wage savings is a make or break proposition of a cargo operation; its is one of many costs that, if not managed properly and competitively, would quickly make this business a money loser.

Fanblade

I think your frame of reference of "giving" or "discount" is all wrong. Your frame of reference for B767 pilot wages is mainline B767 and against that the 10% reduction is indeed a discount. How about using the Rouge B767 rates instead as a frame of reference; that would mean a premium. Better yet, an entirely new frame of reference, B767 cargo pilot, is appropriate and that frame of reference is the 10% below mainline, greater than Rouge rate.

WRT to losing 65 aircraft should Rouge not have been created, I stand by that statement; AC mainline, with our without high density seating, is uncompetitive with WJ, Transat, Sunwings, etc. in that price sensitive market. A believe me, it is price sensitive; customers have no allegiance to anything but the cheapest price - indeed, I have flown with many of our colleagues who opted for these carriers vice flying on our metal because the price was cheaper. If you cannot get employees to pay more how can you possibly get the traveling public to.

One of the things I like about CR et al, is that they are not into flying shiny airplanes at a loss; this industry for too many years subsidized travel either by employees taking pay and working conditions cuts or shareholds seeing their investment evaporate so some asshole can fly for $10 cheaper, while purchasing a $5 coffee in the boarding lounge.

The ACPA mantra, ACPA members constantly seek to improve our profession, working conditions, compensation and benefits — not just on behalf of our own member pilots, but also in support of our chosen profession., is nice but one has to deal in reality and the reality is that AC competes in a competitive environment.

Altiplano

You seem to know a lot about the CargoJet contract.

Could you provide us all with a detailed comparison of its with the AC cargo pilot compensation pack to include wages, per diem, benefits, pension, stock purchase, profit sharing, etc as well as the cost of bidding rights when changing aircraft, etc. I would be curious to see a detailed comparison.

[Fanblade]

Fanblade

I think your frame of reference of "giving" or "discount" is all wrong. Your frame of reference for B767 pilot wages is mainline B767 and against that the 10% reduction is indeed a discount. How about using the Rouge B767 rates instead as a frame of reference; that would mean a premium. Better yet, an entirely new frame of reference, B767 cargo pilot, is appropriate and that frame of reference is the 10% below mainline, greater than Rouge rate.

Sceptical,

Your going to argue that the cargo wage should be compared to a discounted wage? Really?

Check your inbox from ACPA. You may not be aware that ACPA made an error on the Cargo wage comparison in the webinar. The Rouge 319 column was accidentally used. The cargo wage is not actually greater than Rouge. It’s almost identical except that it doesn’t guarantee 77.5 hours. IOW it’s probably less monthly. A pretty serious gaffe considering most people have already voted and may have been swayed by the error.


But back to our debate. The correct frame of reference is the formula used for decades to establish pay. That system was established so you don’t need to negotiate. Just throw in the weight and speed. That formula can be found in the collective agreement. Anything less is a discount.


A wage greater than another discount but less than formula pay is still a discount.

What your advocating is to throw out what was a hard fought win decades ago. At this rate a decade from now we will have wages that don’t even resemble formula pay. None of them.

We are getting lured away from the very formula that is the cornerstone of our wages.

The ACPA mantra, ACPA members constantly seek to improve our profession, working conditions, compensation and benefits — not just on behalf of our own member pilots, but also in support of our chosen profession., is nice but one has to deal in reality and the reality is that AC competes in a competitive environment.

That statement expresses ACPA’s stated goals and values. An organization becomes aimless and irrelevant without a concrete direction. It is why they are stated in print. It’s a reminder of what is important. What direction we are supposed to be moving.

[DHC-1 Jockey]

Here’s some Cargojet info.

B3574878-5E78-4E91-AC53-9E7C07BE435B.png (492.51 KiB) Viewed 3965 times

321ED050-FEA8-4EC1-9033-9DEA6D5404D7.png (257.43 KiB) Viewed 3965 times

17C845D7-26B0-4D60-B7E5-BAEC5BA62B96.png (311.91 KiB) Viewed 3965 times

[Jimmy_Hoffa]

Jimmy Hoffa:

Have a look at the Q1 (end of March) MD&A - the fleet plan showed 2 x A330's being added, 3 x A220's and one Rouge A320; next quarter the MD&A fleet plan shows the planned 5 x mainline B767's and 14 EMB's leaving AND 25 Rouge 767's and 6 x A319's leaving. There is simply no denying that COVID has lead to a reduction in the fleet, reduction in flying and hence reduction in jobs. With only 10% of the former flying being done, that means that 90% of the pilots are surplus. Either through deft negotiation or the realization that the organization cannot down train and up train fast enough that not more of the AC pilot group is not furloughed.

And while some of those fleet reductions (EMB particularly) were due to be replaced by A220's, the deferment and cancellations of the A220 and B737 orders does not bode well.

This statement really caught me eye: 100 pilots @ 75 hrs per month with ~$67 savings for every 3 hours.(or less on a 2 pilot crew)...= 1,876,000 per year profit margin.. Compare that with $14M x 6 fins... $84M thankfully the pilot savings would pay that off in 40 years.... Solid business plan.

I get it, I am just being a dick to make a point. Business plans are complicated, multi faceted proposals way beyond pilot wages. However in this case ACPA and, by proxy, AC have said the “line in the sand” absolute make or break point is hinged on a 10% concession in pilot wages. So to hyper simplify, with a solid dose of sarcasm, the entire cargo op depends on that 10% or $67/hr savings.

To address the fleet concerns and changes, I stand by my previous analysis. Most of these planes had one foot out the door and would be minimal felt due to the pending shortage of pilots. Those demographics have not changed. Also some cancelations were apparently misreported and should have been reported as deferrals. If AC didn’t expect this to be anything but temporary they wouldn’t have so relatively easily agreed to both MOA’s. Talk to anyone trying to get a personal LOA longer than one year and it’s all but impossible, unlike 9/11 when we ended up with Pilots on leave for 15 years. Talk to anyone in the training department and get their opinion on how realistic the last bid was, and if it’s even doable in a 2 year period as stated.

I agree Covid pax numbers are abysmal. However the recovery will be nearly as swift as the drop off. Yes, it will be 3-5 years to see 2019 levels, but 2019 was near record setting. How long to see 2016 levels ? 2013 levels? The minimum threshold for rebound to profitability will be much sooner than the rebound to record profit setting levels.

So why take permanent concessions on a temporary issue over a trivial 100 proposed jobs, for which none are even recalls, but could have a president setting concession for a larger number of jobs down the road with no recourse.

~$67/hr... that’s what the Pilots have been asked to vote on. Not to mention leaving out key guarantees on both productivity (16 day cap) and lacking any improved minimum guarantees (77.5hrs/mo.)

-Jimmy

[Sceptical]

Fanblade:

I think your issue is summarized by your statement "But back to our debate. The correct frame of reference is the formula used for decades to establish pay. That system was established so you don’t need to negotiate. Just throw in the weight and speed. That formula can be found in the collective agreement. Anything less is a discount."

You have to understand that the infamous weight-speed formula and the weight speed factors are based upon flying for a full-service airline that charges full fare, business class prices that produce the corresponding yield. The weight speed formula is a proxy for how much revenue an aircraft generates (weight being a proxy for payload, speed being a proxy of how far that payload travels in a given unit of time). The weight speed factors applied to that weight speed formula are reflective of the amount of money the particular airline generates per passenger, per hour.

A weight speed formula still works for a leisure product or a cargo product but the same weight and speed factors cannot be used; the yield in the leisure market is less (i.e. no business class) and same for cargo. So taking the full fare passenger airline revenue generating capability factors and applying them to cargo is disingenuous.

Jimmy Hoffa

"To address the fleet concerns and changes, I stand by my previous analysis. Most of these planes had one foot out the door and would be minimal felt due to the pending shortage of pilots."

Pilot shortage? Did Air Canada, prior to COVID have a pilot shortage? And that is why the EMB's were being replaced by A220's, B767 (mainline) by A330's? I don't recall anyone every saying that Air Canada was start shrinking due to a pilot shortage.

Let's be clear...Air Canada never did have a pilot shortage and never will have a pilot shortage. AC has never had a lack of excellent pilot candidates - the Jazz move-up agreement is a guarantee of a pipeline of experienced, trained and disciplined pilots. The RCAF and other military's are another source; Emirates, Cathay, etc yet another; corporate, 704 operators, WestJet, Encore, etc. If you read the hiring profiles or Murray's summary in his newsletters you'd see that AC was sourcing pilots from everywhere and there was no lack of superb candidates.

I have stated many times before and I will again; $67 per hour is not make or break for an operation that probably costs are $10,000 per hour or more. The issue is a competitive labour rate given what the competition is paying and so far no one has provided an all-in pilot cost of AC versus CJ. I suspect that when everything is accounted for the AC pilot cost is still higher even with the 10% below mainline rates.

[altiplano]

AC Cargo Pilot cost higher?

All I know is the pay cheque will be lower.

Terms like OT/Draft bonuses lower, vacation prorating worse, reserve guarantees lower, block guarantees lower, and AC guys will work more days to get it.

We have perhaps average, to by some standards below average, group benefits, and a pension we mostly fund from our own paycheques... ESOP was mentioned, well it was scaled back and then gone, and profit share won't be around again for a long time, accounting and write downs will take off that, that's why it's always better to take pay over variable compensation schemes.

We've operated 767s for 38 years, the operation is established, the training, the maintenance, the spare parts, the whole package... The pay is established. They even had 2 choices. Mainline or LOU74, but they're pushing it even lower and extracting an increase in productivity as high as 27% vs. LOU74/NB max days worked.

If all you aspire to compare a Pilot group, with an 84 year history and once industry leading contract behind them, is what the lowest bottom feeder rate out there is, well maybe that's a statement on what your think about yourself, don't drag me down with it.

[Fanblade]

Fanblade:

I think your issue is summarized by your statement "But back to our debate. The correct frame of reference is the formula used for decades to establish pay. That system was established so you don’t need to negotiate. Just throw in the weight and speed. That formula can be found in the collective agreement. Anything less is a discount."

You have to understand that the infamous weight-speed formula and the weight speed factors are based upon flying for a full-service airline that charges full fare, business class prices that produce the corresponding yield. The weight speed formula is a proxy for how much revenue an aircraft generates (weight being a proxy for payload, speed being a proxy of how far that payload travels in a given unit of time). The weight speed factors applied to that weight speed formula are reflective of the amount of money the particular airline generates per passenger, per hour.

A weight speed formula still works for a leisure product or a cargo product but the same weight and speed factors cannot be used; the yield in the leisure market is less (i.e. no business class) and same for cargo. So taking the full fare passenger airline revenue generating capability factors and applying them to cargo is disingenuous.

Sceptical,

You are coming up with all the rationalizations, justifications and excuses management uses. In fact you sound extremely close in your thinking. Almost parroting.

I talked to an MEC member that did the same rationalizations. Very similar. You know there is something wrong when you talk to a union head and they sound like you are talking to the CEO.

I can only come to one conclusion. You must be an elected ACPA member.

Kidding.........at least I hope so. It is an anonymous forum so you never no.

[altiplano]

"never no"

LOL... He's ACPA leadership alright...

[Boooooo]

.

[montado]

Will every other group that gets involved take a pay cut? Will cargo dispatch make 10 percent less? Will cargo load masters make 10 percent less? Will cargo managers make 10 percent less, or the station attendants loading the cargo flights make 10 percent less?

I guess I could be on board if we are all in this together. 10 percent pay cut for everyone and we all win right? I wonder why one group is targeted for the cuts.

[Fanblade]

I wonder why one group is targeted for the cuts.

Because we have demonstrated our willingness. The other groups would laugh at the idea.

No different than when AC wanted to start a different specialty company that eventually was named Rouge. No one else was asked to take cuts. There was no point in asking. Who agrees to work for less?

[mbav8r]

I wonder why one group is targeted for the cuts.

Because we have demonstrated our willingness. The other groups would laugh at the idea.

No different than when AC wanted to start a different specialty company that eventually was named Rouge. No one else was asked to take cuts. There was no point in asking. Who agrees to work for less?

It’s been awhile, are the flight attendants a separate employee group making less than mainline? If so, there was obviously a transfer a jobs to a lower paid group, but other than that, no other group took a pay cut.

[Sceptical]

You are coming up with all the rationalizations, justifications and excuses management uses. In fact you sound extremely close in your thinking. Almost parroting.

I talked to an MEC member that did the same rationalizations. Very similar. You know there is something wrong when you talk to a union head and they sound like you are talking to the CEO.

I can only come to one conclusion. You must be an elected ACPA member.

Kidding.........at least I hope so. It is an anonymous forum so you never no.

The truth hurts sometimes but that is the rational behind the weight-speed formula. It has been that way for decades dating back to the first pilot union contracts. In fact, when jet aircraft and wide-bodies came into existence and the pay skyrocketed, owing to the use of the same weight and speed factors with faster and bigger airplanes, airline managements went berserk as it resulted in B747 Captains making ridiculously large amounts of money (in the minds of the executives, anyways).

[Sceptical]

I have stated many times before and I will again; $67 per hour is not make or break for an operation that probably costs are $10,000 per hour or more. The issue is a competitive labour rate given what the competition is paying and so far no one has provided an all-in pilot cost of AC versus CJ. I suspect that when everything is accounted for the AC pilot cost is still higher even with the 10% below mainline rates.

Sceptical:

I think that we are all in agreement that a 10% savings in pilot wages will not be the deciding factor in whether the Cargo Company turns a profit.

I am sure that the Corporation has done extensive analysis and determined that there is decent profit to be made in dedicated cargo, or else they would not want to go to all the trouble to start the operation.

Does the request for a 10% pay cut not boil down to the Corporation merely trying to maximize the amount of profit that they can extract from the operation?

Let's do a very rough analysis. Hypothetically, assume that management anticipates that the Cargo company would realize $20 million in profit in 2022 with 100 cargo pilots working at the 10% paycut.

Now suppose instead that the pilots were paid normal mainline rates. By Jimmy_Hoffa's math, that would equate to an extra $1.88 million in wages being paid out in one year. This would result in the Cargo operation realizing a slightly smaller profit of $18.1 million. I would argue that in tumultuous times like this, any profit, whether it is maximized or slightly less than maximum, is better than no profit.

This decrease in profit of $1.88 million equates to fully diluted earnings per share shrinking by $0.007/share, or less than 1 CENT PER SHARE.

The Executive team has an obligation to the shareholders to maximize profit, and their ask for a 10% reduction in pilot wages is nothing more than that.

The pilot group needs to recognize that at the end of the day, if the pilots vote NO to the 10% paycut, the Board will still choose to operate a cargo company paying normal wages and earning $18 million (as opposed to reduced wages and $20 million) rather than no cargo company at all!

I don't know where to begin in addressing this one but I will try at the beginning.

First of all, this is not a 10% pay cut; you can't cut something you've never had and AC pilots have never had, in over 25 years, a dedicated cargo operation, let alone one flying B767's. So let's call the proposed pay what it is - a competitive pay rate.

I think it is kind of obvious that if the pilot payroll for the 6 aircraft is $1.88M less than if the mainline 767 rates were paid, then the corp would make that much more or, alternatively, lose that much less. That's not rocket science.

The $0.007/share or 0.7 cents/share you calculate is interesting but spreading that saving over the entire, mainline, Rouge, CPA, Aeroplan, etc operation is a little unfair. Try spreading that $1.88M saving over the cargo operation alone and it will be a significantly larger number as the cargo operation would represent a significantly smaller business unit. Just using aircraft as a proxy for revenue, the 6 cargo aircraft in the context of a 240 aircraft fleet (pre-COVID and making the numbers easy) would a 40X impact.

I don't imagine that the proposed wages for B767F pilots is the difference between profit and loss; management would be crazy to engage in this business if that is the margin. But what the $1.88 M is part of what is required to achieve the corporate profitability requirements for new routes, new aircraft acquisitions, new business units, etc.. It could be a ROI( Return on Investment), ROE (Return on Equity), IRR (Internal Rate of Return), or any other measure they choose. And as I have stated to others, I like the way CR and Mike Rousseau have instilled financial discipline into the capital purchasing, route expansions, etc. - that is part of why AC was doing so well financially prior to COVID. They only invested if it provided an acceptable rate-of-return, much like investing in stocks, bonds, etc. No more chasing rainbows and losing a ton of money, no more CCAA, no more concessions during contract no negotiations (and, no, the proposed cargo pay is not a concession, it is ....a competitive pay rate for a new freighter operation).

I am willing to bet that if this deal is voted down there will be no cargo division; those of us who were on the property knows the reaction from HQ when a deal gets voted down - TA1 being the case-in-point. Booooo, where you hear for TA 1 circa 2012, 2013? If not, go into the ACPA archives and read about it, particularly the ACPA external audit that was done.

The other reason I think you are incorrect about the result of a no vote is that the corporation really doesn't need this cargo division that badly, particularly if a no vote would mean a re-negotiation and an acquiescence. It would set a terrible example to all of the labour groups that the final deal really isn't the final deal.

We all will be watching with great interest how this turns out...

[Torontomaplelaughs]

First of all, this is not a 10% pay cut; you can't cut something you've never had and AC pilots have never had, in over 25 years, a dedicated cargo operation, let alone one flying B767's. So let's call the proposed pay what it is - a competitive pay rate.

[/quote]

It is amazing how management or in this case, a union lackie who is a big company fanboy, can spin something into something it isn't.

The company is doing cargo right now. At full rates. They even converted aircraft.

If the company has a strategic vision to do cargo, it is going to do cargo. It doesn't give two hoots what the pilots want but if they can pay them less, all the better and all the better those middle manager negotiators will look to their higher ups.

Sceptical - I recognize this exact line from the union MEC. It is disgusting. Get out of your house and get on the line and be a pilot instead of a keyboard warrior. You are an embarrassment to this occupation.

I'm waiting for Air Canada's ULCC to roll out and it will pay 50% but it will be to "capture" flying and it is actually a "50% pay increase" because we have never had it and it is really a "50% increase" for junior furloughed pilots who will be forced into it.

But don't worry...we just need to first "capture" the flying and then we can negotiate a better rate when we will shoot thunderbolts from our ass at the next negotiation.

[Fanblade]

You are coming up with all the rationalizations, justifications and excuses management uses. In fact you sound extremely close in your thinking. Almost parroting.

I talked to an MEC member that did the same rationalizations. Very similar. You know there is something wrong when you talk to a union head and they sound like you are talking to the CEO.

I can only come to one conclusion. You must be an elected ACPA member.

Kidding.........at least I hope so. It is an anonymous forum so you never no.

The truth hurts sometimes but that is the rational behind the weight-speed formula. It has been that way for decades dating back to the first pilot union contracts. In fact, when jet aircraft and wide-bodies came into existence and the pay skyrocketed, owing to the use of the same weight and speed factors with faster and bigger airplanes, airline managements went berserk as it resulted in B747 Captains making ridiculously large amounts of money (in the minds of the executives, anyways).

Lol,

Just because I gave up doesn’t mean I agreed with you. Actually quite the opposite. I just realized what I was dealing with.

This statement did it for me. I realized it was pointless. You are essentially gas lighting this thread.

A weight speed formula still works for a leisure product or a cargo product but the same weight and speed factors cannot be used; the yield in the leisure market is less (i.e. no business class) and same for cargo. So taking the full fare passenger airline revenue generating capability factors and applying them to cargo is disingenuous.

You are making crap up........or it has been spoon fed.

Take a peek at the pilot wages across the boarder. Not to compare with Canadian wages. Rather to compare the wages of US full service airlines vs Fedex and UPS.

Now over to you for more rationalizations, justifications and excuses. However this time when I don’t bother to respond, don’t take it as agreement.

This will done tomorrow. You will probably get what you want. With that said your words here do speak of some desperation. So you never know maybe it won’t pass. After all, the last time we voted no was also the last time ACPA proposed a start up at reduced wages.

[Tdicommuter]

I have stated many times before and I will again; $67 per hour is not make or break for an operation that probably costs are $10,000 per hour or more. The issue is a competitive labour rate given what the competition is paying and so far no one has provided an all-in pilot cost of AC versus CJ. I suspect that when everything is accounted for the AC pilot cost is still higher even with the 10% below mainline rates.

Sceptical:

I think that we are all in agreement that a 10% savings in pilot wages will not be the deciding factor in whether the Cargo Company turns a profit.

I am sure that the Corporation has done extensive analysis and determined that there is decent profit to be made in dedicated cargo, or else they would not want to go to all the trouble to start the operation.

Does the request for a 10% pay cut not boil down to the Corporation merely trying to maximize the amount of profit that they can extract from the operation?

Let's do a very rough analysis. Hypothetically, assume that management anticipates that the Cargo company would realize $20 million in profit in 2022 with 100 cargo pilots working at the 10% paycut.

Now suppose instead that the pilots were paid normal mainline rates. By Jimmy_Hoffa's math, that would equate to an extra $1.88 million in wages being paid out in one year. This would result in the Cargo operation realizing a slightly smaller profit of $18.1 million. I would argue that in tumultuous times like this, any profit, whether it is maximized or slightly less than maximum, is better than no profit.

This decrease in profit of $1.88 million equates to fully diluted earnings per share shrinking by $0.007/share, or less than 1 CENT PER SHARE.

The Executive team has an obligation to the shareholders to maximize profit, and their ask for a 10% reduction in pilot wages is nothing more than that.

The pilot group needs to recognize that at the end of the day, if the pilots vote NO to the 10% paycut, the Board will still choose to operate a cargo company paying normal wages and earning $18 million (as opposed to reduced wages and $20 million) rather than no cargo company at all!

I don't know where to begin in addressing this one but I will try at the beginning.

First of all, this is not a 10% pay cut; you can't cut something you've never had and AC pilots have never had, in over 25 years, a dedicated cargo operation, let alone one flying B767's. So let's call the proposed pay what it is - a competitive pay rate.

I think it is kind of obvious that if the pilot payroll for the 6 aircraft is $1.88M less than if the mainline 767 rates were paid, then the corp would make that much more or, alternatively, lose that much less. That's not rocket science.

The $0.007/share or 0.7 cents/share you calculate is interesting but spreading that saving over the entire, mainline, Rouge, CPA, Aeroplan, etc operation is a little unfair. Try spreading that $1.88M saving over the cargo operation alone and it will be a significantly larger number as the cargo operation would represent a significantly smaller business unit. Just using aircraft as a proxy for revenue, the 6 cargo aircraft in the context of a 240 aircraft fleet (pre-COVID and making the numbers easy) would a 40X impact.

I don't imagine that the proposed wages for B767F pilots is the difference between profit and loss; management would be crazy to engage in this business if that is the margin. But what the $1.88 M is part of what is required to achieve the corporate profitability requirements for new routes, new aircraft acquisitions, new business units, etc.. It could be a ROI( Return on Investment), ROE (Return on Equity), IRR (Internal Rate of Return), or any other measure they choose. And as I have stated to others, I like the way CR and Mike Rousseau have instilled financial discipline into the capital purchasing, route expansions, etc. - that is part of why AC was doing so well financially prior to COVID. They only invested if it provided an acceptable rate-of-return, much like investing in stocks, bonds, etc. No more chasing rainbows and losing a ton of money, no more CCAA, no more concessions during contract no negotiations (and, no, the proposed cargo pay is not a concession, it is ....a competitive pay rate for a new freighter operation).

I am willing to bet that if this deal is voted down there will be no cargo division; those of us who were on the property knows the reaction from HQ when a deal gets voted down - TA1 being the case-in-point. Booooo, where you hear for TA 1 circa 2012, 2013? If not, go into the ACPA archives and read about it, particularly the ACPA external audit that was done.

The other reason I think you are incorrect about the result of a no vote is that the corporation really doesn't need this cargo division that badly, particularly if a no vote would mean a re-negotiation and an acquiescence. It would set a terrible example to all of the labour groups that the final deal really isn't the final deal.

We all will be watching with great interest how this turns out...

Stay in your lane.

Pilots. Jobs... Fly planes.
We do not get, nor should have to think about business plans etc. If we did we should get paid like execs not pilots. But we are pilots, so do not use speculation, assumptions, and threats for either argument. I asked for this a long time ago. Use the facts we have.

This LOU ( LT KAFEE) is going to put all narrow jet aircraft at risk of having to work 18-19 days a month. That should be a show stopper. Dead. This is not an MOA, or have snap backs, or anything else handsome worthwhile selling out eternity of NJA flying to try to potentially ( they don't have to start the company) for nothing.

If you are trying to quote business numbers or fleet plans please remember... You are only speculating because only a small handful of people know what the 5 year, 10 year etc plans look like and they don't call ACPA to share the news.

Please vote no

[Sceptical]

The truth hurts sometimes but that is the rational behind the weight-speed formula. It has been that way for decades dating back to the first pilot union contracts. In fact, when jet aircraft and wide-bodies came into existence and the pay skyrocketed, owing to the use of the same weight and speed factors with faster and bigger airplanes, airline managements went berserk as it resulted in B747 Captains making ridiculously large amounts of money (in the minds of the executives, anyways).

Lol,

Just because I gave up doesn’t mean I agreed with you. Actually quite the opposite. I just realized what I was dealing with.

This statement did it for me. I realized it was pointless. You are essentially gas lighting this thread.

A weight speed formula still works for a leisure product or a cargo product but the same weight and speed factors cannot be used; the yield in the leisure market is less (i.e. no business class) and same for cargo. So taking the full fare passenger airline revenue generating capability factors and applying them to cargo is disingenuous.

You are making crap up........or it has been spoon fed.

You know, if you invested a fraction of the time you spend on this forum chirping away and used it to study the history of pilot unions and our pay structure, you wouldn't look quite as foolish. I invite you to read "Flying the Line - The First Half Century of the Airline Pilots Association"
(https://www.google.com/url?sa=t&rct=j&q ... 5q34cEujdo)
where you will learn that history of formula pay. Just in case you can't be bothered to do so, there is a quote from this book (page 71) that puts the lie to your claim that I am making this stuff up:

Because of ALPA’s steadfast support of FDR during the airmail crisis,the President subsequently showed his gratitude by insisting that the temporary mail contractors pay their pilots by the formula specified in Decision 83of the National Labor Board (NLB). Decision 83 required airlines to compensate their pilots on the basis of both the mileage and the time they flew.This formula guaranteed pilots a share in the increased productivity of the
equipment they flew In short, a pilot flying Long & Harmon’s Ford Trimotor might not work any more hours than one flying a Stinson Reliant, but the
law required that he be paid more because the Ford flew faster.

Take a peek at the pilot wages across the boarder. Not to compare with Canadian wages. Rather to compare the wages of US full service airlines vs Fedex and UPS.

Let's do that. Using Airline Pilot Central, here are the hourly rates for 12 year B767 Captains ($ USD):
Delta - $296
FedEx - $326
Atlas Air Cargo - $196

As you can see, FedEx is the highest paid. But before you get all excited, remember that FedEx is more than a cargo airline - it offers a full, end-to-end product from pick-up to delivery, which not only attracts a premium but also differentiates itself from a pure cargo airline. Next, is the Delta Airlines passenger guy at $296 and finally, the pure cargo pilot at Atlas at $196.

Delta - Atlas is the best comparison for the reasons mentioned above and you will see that the Atlas pilots are working at a 1/3 discount to what a mainline airline B767 Captain is making. AC's proposed 10% reduction from a mainline B767 rate for an all cargo operation compared to the mainline passenger operation is a good deal in comparison. So this US only comparison of relative wages (mainline versus cargo), as you suggested, further undermines your point.

So, in addition to do some reading about the history of our pay structure, perhaps take a little time and so some research about what is going on across the border too.