A few questions about the CPA with Jazz.

[mattedfred]

god i hope we get new uniforms from a new supplier as well. VF is totally gouging all of us.

[one8tee]

Ha. true enough.

[Brick Head]

True. What I am saying is Jazz won't do business if forced to work for the same prices as our american counterparts. They can have the flying if it comes down to that because it would be impossible for us to make money at it.

Exactly

And it is not good.

What happens when GGN and CMA do the same thing domestically?

Fortunately nothing happens over night which provides time.

GTFA alluded to the upcoming "CPA arbitration" as a way to nullify blame. Quite insightful. Didn't think of it that way although it does make a lot of seance.

Lets hope the arbitrator gives Jazz a CPA extension while at the same time throws the three headed dog's bone over the fence. Then slams the gate behind it. That would give both parties a step in the right direction.

Point is they wouldnt deliberatly go about trying to set us apart.

Well that is what they said. I'm not permitted to post the flight ops memo.

[Embraer190]

I'm not permitted to post the flight ops memo.

Yeah, they've really gotten anal about that since the leaks to the media.

[Dark Helmet]

Ok IMHO A CPA contract will not break or make an airline. If that were the case, AC would be bankrupt and the US majors would be posting record profits......We both know neither is the case at the moment.

This is just plain greed. I hate to say , but I can't blame the bean counters, Why pay more when you can pay less.

Some of the US regioinals are losing money because their CPA does not PAY. Delta ended up cancelling a CPA with Mesa because of poor performance. (OTP, Staffing problems).....gee I wonder why.

The same will happen to Jazz if the salary is lowered. Paying someone 25K to fly an RJ as FO, and 45K as Capt is unrealistc in Canada. Why? Because that is what Metro, King air, 1900 pilots make. Why go to Jazz and live in YYC,YYZ,YVR for those wages when you have a northern job that pays the same, and is more stable. Especially when there is a perception now that your chances for mainline are not any better.

You can implement a college program, However that will only fly for a while, eventually the college grads will smell the roses.

This will cause mass attrition at Jazz,( I mean way worse than now) trg costs will degrade and go through the roof, the whole system will backfire.

Also what would be the implications to Canada by giving a Canadian job to an American?

Brickhead. you mentioned that AC operated at around 17 cents ASM, and paid Jazz 28 cents ASM. Now does it cost that much for Jazz to operate. If so then why is Jazz way more expensive? I fail to believe it is simply because of our salaries? And what is Jazz doing with all the money they are getting? It is not going back to the employees, nor the company. BTW sorry to hear about the cold.

There is definite problem here, that needs to be fixed. Not for just the sake of pilots, but for the companies as well.

BacK to Mesa and other Us regionals. I am being sincere here because I really don't know. If AC gave them Jazz flying, can they provide the lift that AC will need from them? From what I understand, they can barely do some of their current CPA's. Not to mention be around come 2015. Hawakair, Porter, CMA GGN, Cay they replace Jazz? I would take years to replace 1500 pilots. Remenber all of thiese companies are 60, 80, 120 pilots.

True,they can replace some of the Jazz flying, or do it in stages. Don't mean to put out any threats but what happens then if we all walk at first sign of this.......

[Brick Head]

Brickhead. you mentioned that AC operated at around 17 cents ASM, and paid Jazz 28 cents ASM. Now does it cost that much for Jazz to operate. If so then why is Jazz way more expensive? I fail to believe it is simply because of our salaries? And what is Jazz doing with all the money they are getting? It is not going back to the employees, nor the company.

That is the million dollar question. Bang on, and straight to the point. I for one do not believe Jazz's CASM could possibly be that high. The number is a consolidated number for which we do not get to see the individual costs. How much, and for what? You now what they say. Looks like shit. Smells like shit. It is probably shit. I think, and I have nothing factual to base it on, that in all likelihood buried somewhere, in the labyrinth of money flowing this way and that, within the Jazz CPA, is an unusual and expensive cost. Maybe a series of costs. Maybe heading directly to your friendly neighborhood hedge fund.

I think you have less to be concerned about on the cost side than the numbers actually show. I mean I just can not swallow that number.

I also think we are either going to see some rejigging of the CPA now, befitting both sides, or nothing will happen at all. Arbitrators don't pound one side over the other.

What really matters is the long term. The sole purpose of CPA's is to create competition for the work where there once was no competition. Competition drives the price tag for the mainline carrier down. That is what CPA's are all about. Again these CPA providers in the US have become so lean there is only one place left to extract the cash. Given enough time, tendering CPA contracts will have a very large negative impact on wages and work rules here in Canada. For the companies? Given enough time a very large impact on cost savings.

The problem in the US, and it will happen here eventually, is that now they have stabilized at that new low cost structure for regional carriers. The first mainline did it. The rest had to follow suit to stay competitive. ( now AC has the same need where they compete) Eventually the savings gets passed on to the consumer as capitalism and competition works its magic. In the end cut throat fares. Cut throat wages. Lousy service and no one is making money because everyone matched the bargain basement costs and fares.

Look at the European Carriers. Well paid regional's. CASM's higher. Ticket prices higher. Lufthansa has the highest CASM in the world yet is one of the most profitable. Go figure. The difference? they don't practice capitalism to the extreme they do in the US. They also have much stronger labor laws.

The rest of your post. Bang on. Destruction of the profession. The CEO's and Bean counters are not looking past next quarter. Take it even further. How many pilot trainees will there be when they get a look at what their future holds if they pick this career?

Maybe it should be called the Walmartization of aviation.

Problem being, as we know, nobody dies when a Walmart can't attract competent employees at their pay rates.

True,they can replace some of the Jazz flying, or do it in stages. Don't mean to put out any threats but what happens then if we all walk at first sign of this.......

We will need to do something. I fear what we will do though is watch.

[GTFA]

[/quote]Do you have concern over the fact that Jazz is now a CPA provider as it pertains to professional pilot wages and working conditions in Canada?[/quote]

This is another definite crossroads for ALPA and ACPA to get their collective merd together and establish baselines for wages and working conditions in Canada.

I, for one of maybe few, believe that the current structure of Jazz is a marvelous opportunity for a company, shareholders included, and it's employees to to make major headway into income growth and security. In fact, if AC wanted to make a little more money they may wish to buy into this opportunity at a bargain price and put some resources into getting the Jazz product some more significant work outside the CPA with AC.

What worries me is the shortsightedness and lack of real influence in the aviation world of the Jazz Execs. So much can be done yet so little is getting accomplished.

[countryhick]

What worries me is the shortsightedness and lack of real influence in the aviation world of the Jazz Execs. So much can be done yet so little is getting accomplished.

Agreed!!

[Embraer190]

Look at the European Carriers. Well paid regional's. CASM's higher. Ticket prices higher. Lufthansa has the highest CASM in the world yet is one of the most profitable. Go figure. The difference? they don't practice capitalism to the extreme they do in the US. They also have much stronger labor laws.

Brick Head,
This is very true. IMHO, the European carriers have struck a very good balance between salaries and profits. Pilots are getting paid close to 60 grand after currency conversion, TO START. I like the term you used about the "Walmartization" of aviation, it's happening. I think Canada is somewhere in between the U.S. and Europe in terms of salary and benefits. It's simple supply and demand economics; the more pilots available, the lower the wages. In the United States there are TOO MANY PILOTS and they are willing to work for peanuts. In Europe, the major carriers have cadet programs and such because they can't get enough pilots fast enough... this is why they are well paid. In the U.S., the management of these feeder companies have this type of mentality: "We're going to pay our pilots $17,500 to start because schools are pumping out thousands of pilots a year and someone will be willing to work for those wages." And sadly, he's correct. There are probably thousands of pilots with 250TT in the US who would practically be willing to work for free. Everyone down there is chasing that $100k+ mainline job (Which may never come) and are willing to be paid much less than they are worth. I just don't think the wages make sense in comparison with other jobs out there... someone who works in a grocery store with a grade 1 education can make more than $17,5 in a year. It's ludacris. Jazz pilots deserve more and I hope they will stick up for themselves if the company ever tries to "adjust" their wages to the point where it's comparible to the american feeder carriers.

Rant over.

[Brick Head]

Jazz pilots deserve more and I hope they will stick up for themselves if the company ever tries to "adjust" their wages to the point where it's comparible to the american feeder carriers.

Rant over.

They can't do it alone. GTFA's comment was bang on.

This is another definite crossroads for ALPA and ACPA to get their collective merd together and establish baselines for wages and working conditions in Canada.


I truly believe it would be a big mistake for ACPA to "watch" rather than act.

One, without a unified resistance it can not be stopped. Again this happened in the US under ALPA's watch.

Two, and probably the biggest dynamic, you think we are not liked now, by many of our peers at Jazz? If ACPA just watches we will be hated beyond belief, creating a brand new generation of peers, willing to do our jobs for less just to spite us.

Three, Large wage disparity between similar jobs always correct. Those wage and working conditions will eventually come home to roost.

We need to remember that doing nothing is still a decision.

We need to think outside the box. Our self imposed lack of mobility is being used against us.

If we were to create a single national seniority list that allowed portability from company to company, with minimum wages and working conditions, no one would care if the CPA at Jazz went elsewhere. Someone would do the flying. They would still need pilots. They would still come from the same list at the same rate.

Corporate Motivation removed.

[piggy]

My 2 cents on the future, because that is really what everyone wants to know-the crystal ball viewpoint. The merger between lists at mainline and JAzz will never occur due to in-grown differences with the pilots that will never go away, a result of the long standing problems with the culture and structure of the relationship between jazz and AC.
If they do merge which is very unlikely, the list will not move much due to the erosion of AC flying due to market forces.

These market forces will be interesting going forward. The next 5 to 7 years will be economically painful due to the 16 year secular bear market we are currently in. This means that legacy carriers will have pain and lose market share to discounters, especially so, from a percentage point of view in Canada, and I dont think I have to mention which airline will be taking the market share over that time period in canada. So, if you get a merger with AC, Jazz guys are looking good for the long term rgt, or not? I think AC will be Ok over the very long term, however the next 10 years , domestically, the Canadian airline market will be a changing.

The world economy will pick up sometime 2014-2016, at which time things will be interesting again, as people will fly more , however, oil will be above 100 too, so again it will be a struggle. In other words, things are going to be challenging for some time.

I am not trying to fear monger, just a realistic viewpoint from my extensive research on the subject.

From a compensation point of view, the regional aircraft wages will always be below what they should be. ACPA and ALPA messed everything up more so than I thin k they realize, because they did not merge, and the result will hurt both of them.

If I were a betting man, which I in fact I am, I would say that Westjet will become the dominant domestic carrier in Canada, simply due to market forces at work, kinda like Walmart I guess.

I know this is a very negative viewpoint, but unfortunately we are in negative times.

[GTFA]

[quote="piggy"]My 2 cents on the future, because that is really what everyone wants to know-the crystal ball viewpoint. The merger between lists at mainline and JAzz will never occur due to in-grown differences with the pilots that will never go away, a result of the long standing problems with the culture and structure of the relationship between jazz and AC.
If they do merge which is very unlikely, the list will not move much due to the erosion of AC flying due to market forces.

Piggy, you are missing the mark a little on this one. The only way that there will ever be a platform to launch a labour merge between AC and Jazz is for AC to take conrol over Jazz. By control I mean ownership, at least a controlling ownership. All there is now is a commercial agreement between two parties and any control, so to speak, is by negotiations and mutual agreement. There is absolutely no legal grounds, imagined or implied, to compel either company or labour group to entertain a merge.

That is not to say that things won't change. There is more than one case of an organization purchasing one of it's spinoffs back after the share price has fallen. To do so can be a double bonus return. Above paper value from IPO puts cash in the coffers and then below market value to rebuild assets and operational structure at bargain prices.

Then all the pilots have to do is pull out the files from 1997, re-establish CALPA and pick up where they left off.

GTFA

[Dark Helmet]

Speaking of the Crystal ball. A lot of predictions, some very good guesses, Just to put things int perspecive.

Take 2015 (when the CPA expires) and go back 10 years.

2005

-Ac and Jazz started hiring again,
-Wj was still in the old contract and expanding steadly
-Porter, Sunwing, drawing board sort of speak.
-Zoom was around and well.
-Canjet did skeds.
-Jetsgo was still around, they shut down that year

1995

-Jazz did not exist (at least not as we know it today)
-Westjet was in the deawing boards sort of speak
-Greyhound was around
-Canadian was around, Along with AC they were the 2 mainline carriers in Canada
-Canada 3000 was around too.

1985

-I will let somone else fill in this one, I know that it was completely different than 1995

My point is, you look at the 10 year history of aviation in Canada. Things were completely different. With the obvious nd some surprises.

Anyone back in 85, guessed how 95 was going to be?, how about 95 to 05? Anyone want to guess for 2015 ?

[Embraer190]

Anyone want to guess for 2015 ?

2015: The Earth is a giant, flamming ball of gaseous shit.

But seriously, do you want to hear my opinion?

Best Case Scenario:
The economy is robust and we find alternative fuels and are no longer the bitches of the commodity prices.
- Westjet will grow to 110 planes
- Air Canada will be about the same size with new planes (787 and more EMJs)
- Porter will have new bases out west and 50 planes
- Jazz will grow and get new planes
- Air Transat will grow too
- New airlines that service the north will pop up

Worst Case Scenario:
The economy is crap (less demand), oil is back to $150/bbl and we have no alternative fuels.
- Westjet might be able to sneek through if they are able to maintain low prices
- Air Canada will layoff.
- Porter will go bankrupt.
- Jazz will being laying off.
- Air Transat will shrink.

It is scary how close this industry is tied to oil and the economy. Both of these scenarios are possible, but it all depends on what will happen with the economy and the price of oil.

Just my opinion.

[mattedfred]

"Porter will go bankrupt"

deluce would have to burn through a shit load of cash in order for your worst case scenario to occur

none of the deluce's have bankrupted an airline before

they usually sell them and let some other fool bankrupt them

[Embraer190]

they usually sell them and let some other fool bankrupt them

So true.

[yycflyguy]

I don't think it was ever in Air Canada's strategic planning to acquire more Embraer's. It was always meant to be a filler plane. City pairs that were competed directly with Westjet that couldn't fill a 737 or A319 was an ideal route for the Embraer as AC could brag of higher load factors on the same segment while utilizing a more efficient aircraft then the Airbus. It is also a good aircraft for building new routes or underperforming routes but having said all of that, I don't think there is a need for more than the 15 E175's and 45 190's.

[GTFA]

AC's plan was to get RJs. Lots of them. 200s, 700,s and 900s.

Then the pilots got involved. Then some guy from Brazil showed up.

[Four1oh]

"Porter will go bankrupt"

deluce would have to burn through a shit load of cash in order for your worst case scenario to occur

none of the deluce's have bankrupted an airline before

they usually sell them and let some other fool bankrupt them

Maybe the fools won't bite this time...

[yycflyguy]

AC's plan was to get RJs. Lots of them. 200s, 700,s and 900s.

Then the pilots got involved. Then some guy from Brazil showed up.

Given the choice between the two the Embraer wins hands down. Especially from a passenger satisfaction perspective. 3-4 hours in an Embraer is much easier than on any Bombardier product.

[yyz monkey]

Given the choice between the two the Embraer wins hands down. Especially from a passenger satisfaction perspective. 3-4 hours in an Embraer is much easier than on any Bombardier product.

As a passenger, I'd have to agree.

As a ramp rat, the CRJs are easier to work than the EMJs.

[KAG]

I'll go as far as saying the EMJ is the most comfortable plane I've ever flown on. I love the wider seats, 2+2 config, large TV screens. I would love to see the Next NG have a 2+2+2 config as rumored.

[Dark Helmet]

Well, for what it is worth.......

Jazz and Air Canada successfully conclude negotiations regarding controllable cost rates payable under the capacity purchase agreement

HALIFAX, Feb. 2, 2009 (Canada NewsWire via COMTEX) -- Jazz Air LP ("Jazz") today announced that an agreement has been successfully reached with Air Canada regarding the establishment of new rates for controllable costs that will become payable by Air Canada under the Capacity Purchase Agreement (CPA) in respect of the years 2009 to 2011 (inclusive). This rate review and adjustment was required under the terms of the CPA.
The new rates are retroactive to January 1, 2009, and the parties will reconcile the amounts previously paid to the amounts owing under the new rates such that the parties will be in the same position they would have been in had the new rates been in effect as of January 1, 2009


http://ir.flyjazz.ca/phoenix.zhtml?c=19 ... highlight=