Encouraged by Cal??

[Jaques Strappe]

Pension funds are not equity, at least not in the traditional sense. The funds are single-purpose, sheltered, and cannot be borrowed against. In the AC world the pension is a liability. Currently, it is the liability which will send AC back to CCAA and ensure that current AC shareholders (ACE/Cerberus et al) will be wiped out.

I know that pensions, in Canada, are not considered equity but right now, the net worth of Air Canada is being dragged down by a pension deficit. In part because the airline has not been contributing to it. However, you eliminate that liability and guess what happens to the company's net worth and subsequently, ACE's shares in the company?

Calin has openly stated in the media that he is planning on pension reform. So, lets say he succeeds and gets $3.2 billion off the books. Now add that to the $2 billion we gave in the last round and you will see that the employees have now given almost $6 billion over 6 years. Combine that with all the asset sell offs. Who needs to run an airline when you can make that kind of money? I mean really?

These guys are all graduates from the Gerry Schwartz School of Business and in my mind, have absolutely no intention of running a successful airline. A company's culture starts at the top and I think it is high time for a change in culture.

Many knock the Kool Aid at Westjet but the company I came from prior to Air Canada was also very successful due in large part to it's culture. Unfortunately, that company has since been destroyed by the very same vultures who are presently destroying Air Canada.

[Al707]

Skywest casm = 15.2c
Avg. trip length = 511 miles

Hard to compare Westjets numbers as they do some (but not all) or the same type of flying.

Westjet at 13.2c is more indicative of a regional airline.
Delta at 18.72c is a more reasonable comparator.

[rudder]

Skywest casm = 15.2c
Avg. trip length = 511 miles

Hard to compare Westjets numbers as they do some (but not all) or the same type of flying.

Westjet at 13.2c is more indicative of a regional airline.
Delta at 18.72c is a more reasonable comparator.

Add 60 dash 8's to skywest and subtract 100 crj's and get back to me with the new casm number

Given WJ average stage length and guage, they are a very relevant comparison for AC.

AC is competing with WJ, not Jazz. But you couldn't tell from this forum, could you?

[Al707]

Rudder. I didn't say a comparison to WJ was an irrelevant comparison.

I just said it was difficult considering we have a lot of widebody overseas flying (and the costs associated) to there... almost none.

Skywest has a bunch of Brasilias as well as the RJ's but they only make up a quarter of the fleet vs close to 1/2. I'll give you that! I was just trying to come up with a (quick) CASM comparison for a similar type of operation.

Either way we are paying way too much for the capacity if they are able to distribute $1.00 to 122m unit holders annually!!!

The original reply was to moreccsplease regarding his statement.

"So let me get this straight? Everyone is blaming the CPA with Jazz for the problems here... haha. The 35 million dollars that Jazz extracted in the 4th quarter from AC (and AC is the 12 billion dollar operation)... when Jazz flies over 300,000 flights a year, yep... JAZZ is this problem!

So even if Jazz made no profit at all... what would have AC lost in 2009 other than the 1 Billion they did? Just slightly under 1 Billion?!"

Actually the extraction of 35 million (ballpark to unit holders) per quarter could have been used to pay for our cargo fines or bring us very close to an operating income (profit i.s.o loss) excluding all the fuzzy accounting (foreign currency losses etc.) we weren't far off a decent year considering what fuel did to everyone!

[Four1oh]

Al707, aren't widebodies that do long haul trips bringing down the CASM average? That's how it works over at westjet. The longer the flight, the lower the CASM.

[Al707]

This is true but my point was a direct comparison (I.M.H.O) is not fair nor entirely accurate!

We should be looking at CASM's with similar companies to find out if we are in the ballpark not a relatively new company like Westjet founded what.... 12 years ago

[CanadaEH]

What is your point? For CASM figures to be accurate you need a similar average stage length.

When WJ was launched is irrelevent; last I checked it was an airline and a competitor. If you was to discredit an airline because its "relatively new", have at 'er.

[mbav8r]

I think the point might have been, the cost involved at a relatively new airline wouldn't even be close to a legacy airlines cost even if the average stage length were the same. Do you think the ramp guys at WJ will still be working for 15 dollars an hour or whatever they make, in say 10 years. What do you think WJ casm will be when they have a union and contracts that go with that implication. Don't say they won't ever have a union, because eventually the number of employees that want more will out number the ones who don't.(IMHO)

[Dockjock]

Let's say Rovinescu and Dee succeed in changing the metric by which pensions are valued and thereby erase the apparent 3.2 billion (or whatever) deficit. Did they actually make any money? Or do anything real? Or did they just change a few plusses and minus signs so that it all "worked out" better?

How much of a bonus will be in order? (answers in tens of millions only, please)

I will concede that constantly valuing pensions on wind up value (fully funded even if the company stops operating) as opposed to the going concern basis (which assumes the company is still operating) does seem onerous.

Getting a let on that until interest rates go up again seems like a good plan, actually. On a permanent basis that seems like courting disaster because then the threat of CCAA/liquidation (next next time around) also means your pension is gone, too. Now THAT's leverage!

[teacher]

Jazz's costs wouldn't be so high if it didn't have to purchase all it's services from AC (in turn creating cash for mainline) at such inflated prices. I'd be all for saving mainline money and charging less however Jazz should not have to use ACGHS among others and have the ability to shop around for other services to lower it's costs.

BTW, doesn't Jazz lease some of it's planes from AC?

[Jaques Strappe]

Let's say Rovinescu and Dee succeed in changing the metric by which pensions are valued and thereby erase the apparent 3.2 billion (or whatever) deficit. Did they actually make any money? Or do anything real? Or did they just change a few plusses and minus signs so that it all "worked out" better?

How much of a bonus will be in order? (answers in tens of millions only, please)

I will concede that constantly valuing pensions on wind up value (fully funded even if the company stops operating) as opposed to the going concern basis (which assumes the company is still operating) does seem onerous.

Getting a let on that until interest rates go up again seems like a good plan, actually. On a permanent basis that seems like courting disaster because then the threat of CCAA/liquidation (next next time around) also means your pension is gone, too. Now THAT's leverage!

Dockjock

If Calin reforms the pension then ACE stands to realize a significant value in it's stock, which translates to value being taken away from the employees and once again, being given to ACE.

I don't think Calin actually wants to see CCAA. If he does, with a 3.2 billion dollar pension deficit owing to the employees, that makes us the single largest creditor that he will have to answer to. Staying out of CCAA avoids that. I am sure he is working for the "pay later" plan in hopes they will never pay at all.

That being said, at the current market value of the company, I have to wonder if an employee buyout is an option that is being thrown around the table at the joint meetings of the unions? One thing is for sure, the remainder of Air Canada's creditors would rather work with a company that is committed to being around in the long term, something also valued by the employees, rather than another hedge fund investor. Calin has already blown his cover in this regard.

[Al707]

Teacher, unfortunately, I believe AC is paying the same (expensive) rates for those services. Poor services at that as well.

My main point I was trying to make through all this was that AC is paying too much! Period!!

Jazz has 122,865,144 outstanding units and each unit collected MORE than the $1.0056 per unit distributed to unit holders. The MORE part covered costs and taxes and the $1.0056 was over and above and therefore... distributed.


Earlier I touched on Jazz CASM of 26.30 cents (annual now).... being too high.

$123,553,189 was paid to unit holders which represented.....

Cost $123,553,189 divided by Available Seat Miles (ASMs) 5,657,022,000 = 0.0218 cents per ASM paid to unit holders that made the outgoing crooks very wealthy!

IMHO... we should be paying more in line with.... existing CASM .2630 - UNIT HOLDER PROFIT PER ASM .0218 = .2412 cents per ASM. At least a 10% reduction just on the unit holder dividend plus how much are they charging to run the scheme?

Clear as mud??

PS. turns out that the $1.00 per unit is after tax distribution meaning more like $1.50 or so was needed to be paid in the first place....

[dream chaser]

Al707,

The reason why some of the Jazz employees have their backs arched when you make comments about AC paying too much for Jazz's services is this.

Jazz unit holders might have collected $1 per unit off the payments made by AC, but how much did the employees collect out of that 122 million? Oh wait, Jazz employees are all owners with our 10 unit gift last year.

If the CPA was renegotiated due to an AC bankruptcy, and huge cuts had to be made, where do you think that this money will come from. Employees pockets. This is why Jazz employees are defensive and this is why we are watching the "Air Canada" forums closely. We don't want AC to go bankrupt.

Maybe Ac is paying too much for Jazz's services and vice versa. It is a big game of transferring money from one pocket to another. I know, we're all seperate companies now.

Unless the corporate culture within AC and Jazz for that matter changes such that employees are considered number one, customers are number 2 and shareholders are number 3...we will continue down this road towards the next bankruptcy. Happy employees generate happy customers which keep them coming back subsequently taking care of the shareholders and managers big bonuses.

My 2 cents for what its worth.

[Jaques Strappe]

Teacher, unfortunately, I believe AC is paying the same (expensive) rates for those services. Poor services at that as well.

I would not say that Jazz is a poor service, if that is what you were implying. ACGHS has to be the biggest rip off as far as services that AC is mandated to pay for. In Canada, at stations that employ the services of ACGHS, it seems that every single scheduled arrival of an Air Canada flight comes as a complete surprise, holding up passengers and blowing connections. Then once we get a crew, it is painfully obvious that these guys have never been taught to marshal properly. Sometimes we are lucky enough to get a ramp crew only to wait for an agent. The company is aware of this because it is written up daily. ACGHS won't hire the proper staff, in favor of making their one and only customer, wait. Who does business that way?

Any other station, sales is standing by, the crew is in place, with wing walkers in position, waiting for our arrival with a lead who knows how to identify a lead in line and can marshal properly, ( has illuminated wands at night too, how novel ) If any other service provider delivered their product at the level of ACGHS, they would have been fired long ago. If we truly are separate entities, I have no idea why we contract them. It is so painfully obvious that it is nothing more than a money syphon.

If Calin or Monty or any of the so called leaders were truly serious, these issues would be getting addressed immediately. You can study cost structures and CASM using pie charts and power points all you want but if you cannot do something fairly simple, like deliver the product you sell, then at the end of the day, it really does not matter what your cost structure is.

The employees are not over paid or under worked, nor should they be required to finance management screw ups. The efficiencies that Air Canada requires to be successful are within management itself. as it stands right now, it seems these guys could not organize an orgy in a 10 cent whore house with a pocket full of dimes.

[yyz monkey]

http://www.youtube.com/watch?v=XY8u-0Lje8I

[aroundthewing]

In Canada, at stations that employ the services of ACGHS, it seems that every single scheduled arrival of an Air Canada flight comes as a complete surprise, holding up passengers and blowing connections. Then once we get a crew, it is painfully obvious that these guys have never been taught to marshal properly. Sometimes we are lucky enough to get a ramp crew only to wait for an agent. The company is aware of this because it is written up daily. ACGHS won't hire the proper staff, in favor of making their one and only customer, wait. Who does business that way?

Jack, can't comment on the poor training, but another issue is the management of the ground crews and apparent shortage of ground crews in some stations.
Believe it or not, some ground staff do "give a sh*t", and your problems with them are not always their fault. ACGHS is still lumped in with the mother ship if I recall correctly.
As for the Jazz handling contracts.....F/T Jazz Agents, Stoc/Support staff make near twice as much as the newly hired AC staff or the 40% P/T staff.
Food for thought?

[Jaques Strappe]

Jack, can't comment on the poor training, but another issue is the management of the ground crews and apparent shortage of ground crews in some stations.
Believe it or not, some ground staff do "give a sh*t", and your problems with them are not always their fault.

Not necessarily saying I have a problem with any individuals. I do believe however it is a very poor excuse for a ground handling agency, that's all. Air Canada seems to get better service from ground agencies that do not share it's name. Coincidence? or is there a common theme here? I would like to believe that most of us want to do our best.

[aroundthewing]

Jack, can't comment on the poor training, but another issue is the management of the ground crews and apparent shortage of ground crews in some stations.
Believe it or not, some ground staff do "give a sh*t", and your problems with them are not always their fault.

Not necessarily saying I have a problem with any individuals. I do believe however it is a very poor excuse for a ground handling agency, that's all. Air Canada seems to get better service from ground agencies that do not share it's name. Coincidence? or is there a common theme here? I would like to believe that most of us want to do our best.

It does have it's issues, however some of these issues are beyond the control of the ground crew themselves.

it is a very poor excuse for a ground handling agency"

......I think the "hubs" are where the issues lie.

[Al707]

Jaques,

I was replying to the assertion that Jazz was paying more for it's services (from AC) than AC was.

The poor services comment was not directed at Jazz but the AC services it purchases.

[aroundthewing]

Jaques,

I was replying to the assertion that Jazz was paying more for it's services (from AC) than AC was.

The poor services comment was not directed at Jazz but the AC services it purchases.

Services as a whole are sometimes poor at this time. What are you referring to specifically?

[whiteguy]

Teacher, unfortunately, I believe AC is paying the same (expensive) rates for those services. Poor services at that as well.

I would not say that Jazz is a poor service, if that is what you were implying. ACGHS has to be the biggest rip off as far as services that AC is mandated to pay for. In Canada, at stations that employ the services of ACGHS, it seems that every single scheduled arrival of an Air Canada flight comes as a complete surprise, holding up passengers and blowing connections. Then once we get a crew, it is painfully obvious that these guys have never been taught to marshal properly. Sometimes we are lucky enough to get a ramp crew only to wait for an agent. The company is aware of this because it is written up daily. ACGHS won't hire the proper staff, in favor of making their one and only customer, wait. Who does business that way?

Any other station, sales is standing by, the crew is in place, with wing walkers in position, waiting for our arrival with a lead who knows how to identify a lead in line and can marshal properly, ( has illuminated wands at night too, how novel ) If any other service provider delivered their product at the level of ACGHS, they would have been fired long ago. If we truly are separate entities, I have no idea why we contract them. It is so painfully obvious that it is nothing more than a money syphon.

If Calin or Monty or any of the so called leaders were truly serious, these issues would be getting addressed immediately. You can study cost structures and CASM using pie charts and power points all you want but if you cannot do something fairly simple, like deliver the product you sell, then at the end of the day, it really does not matter what your cost structure is.

The employees are not over paid or under worked, nor should they be required to finance management screw ups. The efficiencies that Air Canada requires to be successful are within management itself. as it stands right now, it seems these guys could not organize an orgy in a 10 cent whore house with a pocket full of dimes.

So how much time have you spent working on a ramp? What would do to change things at ACGHS? Or are you just one of those pilots that thinks your the only flight arriving at that time?

[Jaques Strappe]

Whiteguy

Am I "one of those pilots who thinks he is the only flight" ? Get real and Yes I have worked on a ramp before, most pilots have. As far as ACGHS goes what should be different? Well being at the gate for the actual arrival would be a good start. You seem to be taking this personally and I don't know how many times I need to repeat myself when I say it is not necessarily the individuals problem, although there a few bad apples in the bunch.

It does not seem to matter that flight XXX arrives on or around 10:30 everyday of every week. Even if flight XXX updates it's ETA via ACARS, then calls in range on the VHF, then calls again when it has actually landed and is enroute to the gate, flight XXX still waits for a crew. There is no doubt that this is a manpower issue, however when the crew does arrive, the lead rarely identifies the lead in line, he usually just stands there with his arms over his head. The lead in lines are not that easy to see at night, particularly if it has just rained and not all gates are at 90 degrees. If I need to worm my way between two other airplanes, I don't get wing walkers, they are too busy holding the chocks. If we are lucky, the lead has more than one illuminated wand. ( does the lead even know how to identify the lead in line? )

There is an air worthiness directive on the Embraer that requires the cargo doors to be visually inspected and confirmed locked prior to pushback because we had one open in the de-ice bay without any annunciations coming up in the flight deck two winters ago. To comply with that airworthiness directive, the lead is required to convey to the crew that the inspection has been done. 90% of the time, we need to ask him about it because he doesn't volunteer the info as required in his SOP and it does not inspire much confidence that he takes the issue very seriously.

Whenever we have a ground communications snag and require to push using hand signals, I have a brief with the lead before hand and when I ask to review the hand signal for an engine fire, I often get met with a blank stare. That tells me a lot right there. These issues are not limited to YYZ. They are common throughout the entire system where ACGHS is used. Indicating to me that it is not managed properly.

Another nice little gem the other day, no GPU was supplied in YYZ and I needed to leave the aircraft to do another flight, so shutdown the APU as the last passenger got off. A young family was waiting on the bridge for their stroller when the aircraft was shutdown and a loud voice came up from below, " turn the airplane back on you Fu..**&g Ash*$%le!

Real nice. It is no secret within the company that ACGHS has some serious issues.

So what would I do differently? Well for a start I would staff it properly. Provide some apparently much needed training and every lead would get an opportunity to ride in the flight deck when a tow crew re positions an airplane to a gate so he can see what we see, or more importantly, don't see. Each crew would watch a video during training that demonstrates what happens to an airplane when a cargo door opens in flight. I would change the SOP to have the two guys standing next to the lead holding the chocks to be out on the wing tips providing clearance and protecting the sterile area. The agents would be trained to operate the bridges like at all the US airports freeing up a body there so the GPU could be plugged in in a timely manner. If a crew were to arrive late at the gate, the priority would be to get the area clear and the aircraft parked, not searching for and putting chocks in place first. For stations such as YOW, STOC would not be allowed to close until the last flight has arrived. Everytime we arrive in YOW from Montego Bay, we are the only ones there and nobody is home to answer the radio, receive an eta, or provide any support. On the last arrival, the F/O and I had to escort the passengers to the customs hall because there was no agent and no way of locating one. This is not how it should be done.

[teacher]

You forgot to mention another big one the kills me. "Not my inbound flight, not my problem", we've had to sit engines running waiting for "our" crew while another crew watched us at the gate next door a few times. Seriously it doesn't take that long to park a dash and hook up the GPU.

[Jaques Strappe]

You forgot to mention another big one the kills me. "Not my inbound flight, not my problem", we've had to sit engines running waiting for "our" crew while another crew watched us at the gate next door a few times. Seriously it doesn't take that long to park a dash and hook up the GPU.

Yeah thanks, I forgot about that one. Too many times I have done a PA to the customers explaining that we are waiting for a crew only to have passengers looking out the window staring at a crew on the adjacent gate sitting on a tug. Not sure what the issue is there, be it union or otherwise. This doesn't seem to be an issue with other ground service providers we use.

[whiteguy]

You forgot to mention another big one the kills me. "Not my inbound flight, not my problem", we've had to sit engines running waiting for "our" crew while another crew watched us at the gate next door a few times. Seriously it doesn't take that long to park a dash and hook up the GPU.

Yeah thanks, I forgot about that one. Too many times I have done a PA to the customers explaining that we are waiting for a crew only to have passengers looking out the window staring at a crew on the adjacent gate sitting on a tug. Not sure what the issue is there, be it union or otherwise. This doesn't seem to be an issue with other ground service providers we use.

Yes a crew sitting at the next gate could come over and park you. But then what happens? The flight they have been waiting for shows up and then they're pissed because they are not being parked. Your flight is parked but nothing is set up, you have no ground power, again you have to shut down the airplane to go to your next flight. The crew then has to go back park they're original flight and again the family is waiting for their stroller. Round and round it goes! If crews were just walking around parking random airplnes things would be so disorganized.

The biggest problem is the original schedule planning at the beginning of the sched. Everything is planned for every flight being on time. Not late and early, on time! Just because the crew is not there doesn't mean they'
re sitting in the lunch room they're usually on another flight or just coming off their 30 min unpaid lunch.

I do agree with you about the lead situation. There is a definetly a lack of training which needs to be addressed. Its partly a union problem and a company problem. There is no formal training, its just a couple of days of famming with another lead. You have guys with 6 months service becoming leads to get the pay and guys with 10 years who don't want to do it because they don't want the hassle from management. I have friends in the training dept in YYC, we have talked about it before but I will bring it up to them again.

Just for the record all my experience was on the ramp in YYC but I am no longer there. I feel I was one of those leads that knew my job and did it well but I also spoke up and managment in YYC does not like that. They want people that say yes and don't question decisions. Sad to say but safety is not always number 1 when it comes to OTP. So I moved on to bigger and better, never looked back. Cheers.

Sorry about the "only flight" shot, frustration talking!