Hey Mr. Soprano, You Ready To Be Happy At All Cost?

[tonysoprano]

V1.
You're referring to so far this year, my comments were to do with the whole year, last year.The 2008 statement showed a loss of 1bill $. Correct me if I'm wrong, I can't remember but I think only 39 Mil was flt operations. Amongst other things, the bulk of the loss was attributed to hedges. Despite a bad financial year, our load factor was good last year and that's why operations only lost a small portion. This year, the LF has been very low hence the bigger loss from flt operations. These are not long term effects. These are things that change. I love how some of you guys love to take snap shots and create long term analysis of a problem. I agree, any way you slice it, it needs to be fixed. What needs to be fixed and how we go about it is certainly not going to come from this forum. We are only here to speculate.

[tapaflyguy]

Having worked for AC and seen the unhappiness, I wish that AC would "fold" like BWIA of T and T did. Start up with a new OC, new staff and make money like Caribbean Airlines now does! Get rid of the "bad apples" aka 80 year old F/A's and lazy CSA/Rampies, and go lean and stick with one aircraft type. As a taxpayer why do we have to bail out GM, and AC? Let them fold, nobody bails out the mom's and pop's stores of the world, yet we always come running for the dinosaurs. Build a good product, be nice, treat people the way you want to be treated and you will succeed. Hence the European and Japanese automakers are doing well, and also Westjet!

[square]

Brick.
Thanks. Very analytical. I have a much more simplistic view of our problems. Analise this: A couple of years ago we made money. Last year we didn't. The difference? Apparently fuel and currency hedging.

If that's the case it's a pretty sad blunder. The whole point of hedging is to accept a small loss to avert a large loss. If the small loss were to put them way out in the weeds, they would not have graduated from grade seven math. It's pretty simple.. you hedge your bets planning to lose the cost of the hedge.

[bcflyer]

go lean and stick with one aircraft type.

Just out of curiosity which aircraft type should AC go with? Keep in mind it needs to be able to make money with about 65 pax but have the capacity to carry up to 300. It must also have enough range to go YVR-SYD and yet be able to land in LGA.

As a taxpayer why do we have to bail out GM, and AC? Let them fold, Hence the European and Japanese automakers are doing well, and also Westjet!

Where are you getting your information about a goverment bailout of AC? I certainly haven't heard anything about it... As for the Japanese auto makers, Toyota is expecting to post a loss of nearly 3.5 billion dollars this year and has asked the Japanese government for 2 billion in aid. Hardly what I would call "doing well"....

[Rockie]

Having worked for AC and seen the unhappiness, I wish that AC would "fold" like BWIA of T and T did. Start up with a new OC, new staff and make money like Caribbean Airlines now does! Get rid of the "bad apples" aka 80 year old F/A's and lazy CSA/Rampies, and go lean and stick with one aircraft type. As a taxpayer why do we have to bail out GM, and AC? Let them fold, nobody bails out the mom's and pop's stores of the world, yet we always come running for the dinosaurs. Build a good product, be nice, treat people the way you want to be treated and you will succeed. Hence the European and Japanese automakers are doing well, and also Westjet!

1. The government has not bailed out Air Canada. Get your facts straight.

2. The reason Japanese automakers and Westjet are doing so well is because of their corporate management first, then their employees. " Treat people the way you want to be treated and you will succeed" applies first to management. Do that and you will have a happy productive workforce that takes care of customer satisfaction for you. If Toyota and Westjet had a corporate management as disconnected and patronizing toward their workforce as Air Canada is they would be in the same situation.

3. "Go lean and stick with one aircraft type". Please try and learn a little about the industry before saying nonsense like this.

[Brick Head]

Tony,

You seem to have bought into the companies version. Pension relief and some financing and we are good to go.

Pension relief and financing alone will not fix this.

With out saying too much here. Remember the slide presentation prepared for us by outside financial experts?

Slide one. Nothing done ............Fail XXXXXX
Slide two. Pension relief only......Fail XXXXXX
Slide three. Financing.................Fail in next down turn
Slide four. service providers industry standard.....

Slide 4 buddy. Gotta get slide 4. AC gets the "service providers" in line, financing, and pension relief and AC will be viable long term. But it must all happen.

AC doesn't care about getting past slide 3. They will be long gone by the next down turn and a portion of your pension with it.

We must get slide 4. Getting slide 4 will be tough. Getting slide 4 requires that service providers come back to the table.

If we don't? If we acquiesce to AC's version? They will use your pension relief to keep floundering along until the next down turn. In the interim ACE shareholders will be long gone. At which point we will be in serious do do because if the company goes over the edge then, we loose huge on the pension relief we are giving now. Imagine the pressure on us at that point.

Although V1 would love to believe the model is completely broken, it is not. The model has been saddles with exorbitant cost to inflate the sale of former entities for the direct benefit of ACE shareholders.

Slide 4. Fix it.

[tonysoprano]

Slide 4 buddy. Gotta get slide 4. AC gets the "service providers" in line, financing, and pension relief and AC will be viable long term. But it must all happen.

Yep, I recall. Financing and pension relief I thought were achievable and the "service providers" I thought were still providing the CCAA contracts. Oh well. Much to do.

[getinthewind]

I agree that we hold the cards over ACE. Milton, ACE and the greed mongers at Cerberus screwed up and left it way too late to abandon ship. They were so intent on stripping the ship of everything of value that they failed to notice how fast it was sinking, and now they can either help keep it afloat or lose everything.

Poetic in a way isn't it?

Did you guys read in one of the latest newspaper articles that milton and a few of the other upper ups in "ACE" changed their positions to supposedly save the company money in salary payouts?? the only problem is that by changing to consultants they effectively triggered their severance packages(more millions for Milty)...I don't know how you feel we hold any cards at all as far as ACE is concerned,(supossedly the dispersement of ACE holdings was stopped by the unions, I think they feel that they can artificially elevate the stock prices and then sell off) the article mentioned that ACE would only inject about 2 billion to help Air Canada stave off its cash crunch! the whole thing makes me sick, there has to be some way that they could be held legally responsible for their actions IF, in fact, they manage to wind ACE up and disperse the money to the share holders as they had planned. The whole thing looks like a ponzi scheme... take money from someone to pay the promised profit to someone else...the employees are the only ones getting less.

[Airband]

AC wants YOW to chip in on $600M loan

[2R]

AC wants YOW to chip in on $600M loan

Or what ?

[Brick Head]

Well Tony.

Gonna have to eat my words I guess. That didn't take long at all. Mr. Rose colored glasses wins.

Unless of course ACPA caved. Don't think so though. Not in this sort of time frame. I would think the gov't is tired of the instability as well.

Of course just to throw cold water on you out guessing me. It looks like the deal is contingent on overall restructuring. All it takes is one player........

Yeah yeah I know two years from now.........it'll all be forgotten.


http://www.financialpost.com/story.html?id=1697555

Air Canada close to bailout deal

Scott Deveau, Financial Post Published: Monday, June 15, 2009

Air Canada is close to reaching a deal with the unions representing its flight attendants and pilots that could clear the way for the troubled carrier to receive more than $500-million in financing from a consortium of lenders, including a portion covered by the federal government, sources say.

The 21-month moratorium on its pension obligations and an extension for the same duration of its existing labour contracts with the Air Canada Component of CUPE, which represents 7,000 flight attendants at the airline, and the Air Canada Pilots Assocition is expected to be announced as early as today.

Two weeks ago, the federal government appointed a mediator to Air Canada's pension talks with its unions with the goal of bringing some much needed labour stability to the airline, which Ottawa said was a condition on it providing a portions of the financing it required. The size of the federal contribution is not yet known, but it is said to be "secured" by assets at the airline.

"The company has indicated that it wants all unions to approve the pension memorandum. This improves their chances of gaining government approval needed to adjust the pension payments in the proposed manner," the CAW said on its website.

"The federal government announced on the morning of June 4, 2009, they had appointed former Ontario judge James Farley to resolve the pension issues between Air Canada and its five unions. Air Canada asked the Federal Government to provide financing. The Federal government was not prepared to provide loans without labour stability."

The federal contribution to the airline's financing is expected to be only one aspect of broader restructuring at Air Canada that will be announced once the deal with CUPE and ACPA is secured, a source said.

The country's largest carrier had been seeking an immediate moratorium on its pension obligations this year after its solvency deficit ballooned to $2.9-billion last year, from $1.2-billion in the previous year. This has increased its pension funding obligations this year to $650-million, which management has said is out of reach given the $400-million loss it incurred during the first quarter and the continued weakness in demand for air travel during the economic downturn.

The airline had already reached a tentative agreement with the Canadian Auto Workers, International Association of Machinists and Aerospace Workers, and CALDA, which represent 70 dispatchers at the airline, over a moratorium.

That deal, which is currently undergoing a ratification vote by the unions memberships, also included an extension of their current labour deals which all expire by the end of the month, essentially freezing their own wages over that time in exchange for a similar salary freeze by management and equity stake in the airline, amounting to less than 10% to be divided amongst the unions.

A spokesman for the airline and Department of Finance were not immediately available for comment.

[tonysoprano]

mmm....good.

[Brick Head]

Sour actually.

The outcome is far faster than I ever expected. And assuming the highlighted text above is correct and means what I think it means...... Sweet.

I've been blabbing on way to long that AC is being used as an ATM.

[tonysoprano]

To be perfectly honest Brick, I still think what you say holds alot of truth. Time. It's gonna take much time. Keep the faith.

[rudder]

Montie tried. He took the Jazz CPA rate renewal to arbitration and lost.

The CPA triennial rate renewal did not go to arbitration.

The main problem at AC is a cost structure that in some cases is 40% above the competition in an environment where a 40% revenue premium is no longer available.

Status quo is not sustainable. But don't let that stop people from bailing out ACE who stand to benefit the most by avoiding a near-term CCAA filing.

[Brick Head]

Montie tried. He took the Jazz CPA rate renewal to arbitration and lost.

The CPA triennial rate renewal did not go to arbitration.

The main problem at AC is a cost structure that in some cases is 40% above the competition in an environment where a 40% revenue premium is no longer available.

Status quo is not sustainable. But don't let that stop people from bailing out ACE who stand to benefit the most by avoiding a near-term CCAA filing.

Rudder,

You would be astonished at the expertise ACPA has hired to figure this out.

The CPA didn't go to arbitration?????? Is that a play on words? You going to call it a tribunal?..........imposed mediation? What?

You are right, the status quo is not sustainable.

At what point will you understand that the excess money flowing in Jazz and Aeroplans direction is driving up AC's cost substantially? This isn't brain surgery. Money out = higher CASM.

The forthcoming major restructuring details, and their targets, will not be announced until ACPA and CUPE have ratified.

If you feel you need to enlighten ACPA, you can email the the address below.

Jun 15, 2009, 11:48 p.m. EST
Air Canada Pilots Reach Tentative Agreement on Restructuring Plan for Airline's Long-Term Viability
Plan includes pension funding holiday, equity restructuring and collective agreement

TORONTO, ONTARIO, Jun 15, 2009 (MARKETWIRE via COMTEX) -- The Air Canada Pilots Association (ACPA) today reached a tentative agreement with the airline on a restructuring plan aimed at providing Air Canada with long-term financial and operational stability.

The pilot group's tentative agreement with Air Canada includes:

- pension funding relief

- restructuring plan for the airline

- equity participation and Board representation

- a renewed collective agreement on wages and working conditions

"This restructuring plan will meet Air Canada's most immediate financial needs while also putting it on the road to becoming a sustainable business for the long term," said ACPA President Captain Andy Wilson. "As employees and creditors, we have a vital interest in the prosperity of the airline. Our restructuring agreement will help secure the future of Air Canada and ensure a meaningful portion of the airline's equity is held by its employees, who have a vital, ongoing interest in a profitable, sustainable airline."

ACPA pension plan members and their retirees are one of the airline's largest creditors, representing about 25 per cent of Air Canada's $2.85 billion pension debt. Under the restructuring plan, these employees and pensioners would provide the airline with a 21-month pension funding holiday in respect of past service costs from April 2009 through December 2010 and a dramatically reduced schedule of payments through December 2013.

This special funding protocol would effectively provide the airline with an interest-free loan that would help meet its short-term capital needs.

In exchange for this pension funding relief, plan members would receive a 15 per cent equity interest in Air Canada. Held in a trust, the equity would offer the opportunity for both active and retired employees to benefit from the increased pension funding that would result from financial success of a restructured Air Canada.

The pension plan member trust would also gain the right to appoint one representative to Air Canada's Board of Directors.

Under the restructuring plan, Air Canada would also be required to obtain other new financing and would not be permitted to divest certain business units until the end of March 2011 nor make any unusual distributions during the term of the Agreement.

ACPA has also tentatively agreed to renew its collective agreement over the 21-month period of the special pension funding arrangement. The tentative agreement contains minor changes to address some irritants that have arisen since the pilots last negotiated a contract, but does not increase net expenses for the airline.

The plan requires ratification by ACPA's members and federal regulatory approval for the proposed changes to the pension contributions.

More details of the tentative agreement will be presented to Air Canada pilots as part of the ratification process.

"As the people with one of the largest stakes in the airline, we felt it was essential that Air Canada be put on a path to long-term sustainability," Captain Wilson said. "This tentative agreement will not only re-engage employees with their airline, but ensure that Air Canada can focus on improving customer service and the air transportation connections that are essential to our country and its economy."

ACPA's restructuring plan was based on analysis completed by expert external financial and legal advisors, which indicated the only way the company could overcome its financial obstacles would be through a major restructuring. Over the last several months, pilots met with, and presented the analysis to the airline, the federal government, labour groups and other stakeholders.

The tentative agreement, developed on the basis of the pilots' proposal, was reached under the mediation process established by the federal government and led by former Ontario Superior Court Justice James Farley. "We thank Judge Farley for extraordinary efforts in helping us achieve this agreement," Captain Wilson said. "We are also thankful to the federal government for its ongoing interest in Air Canada and, in particular, Finance Minister Jim Flaherty for his timely offer of mediation."

"We are also grateful for the dedication, commitment and trust demonstrated by Katherine Thompson, Component President of the Canadian Union of Public Employees, and her CUPE colleagues, who so ably represented Air Canada flight attendants in these negotiations. We would not have been able to reach this tentative agreement without the support and assistance of our flight crew colleagues."

The Air Canada Pilots Association is the largest professional pilot group in Canada, representing the more than 3,000 pilots who operate Air Canada's mainline fleet.

Contacts:
Air Canada Pilots Association (ACPA)
Paul Howard
(905) 678-9008 x 222 or Cell: (647) 401-4521
Email: phoward@acpa.ca

[rudder]

Things cannot be all that rosy if this agreement precipitated the resignation of Strachan.

Was the resignation over what is in the deal or what is missing from the deal?

[Rockie]

Things cannot be all that rosy if this agreement precipitated the resignation of Strachan.

Was the resignation over what is in the deal or what is missing from the deal?

I don't think we'll ever know, but as far as I can tell everything is there that we were briefed on during the road show. Strachan seems to have put his heart and soul into this, so maybe he just had nothing left to give. Or maybe out of embarrassment because it wasn't their plan the company insisted that he resign if they agreed to it. Whatever the case, his passion was unmistakeable and we owe him.

[tonysoprano]

Balfour.

We'll will just have to see what the cowboys in ACPA have to say.

Cowboys? Pfft. I think you're a little confused, fool. And BTW, to answer your question: ABSOLUTELY!!!

[balfour]

Balfour.

We'll will just have to see what the cowboys in ACPA have to say.

Cowboys? Pfft. I think you're a little confused, fool. And BTW, to answer your question: ABSOLUTELY!!!

I think you're the confused one here bonehead. Glad to see you will be happy. Let's just see how long that lasts LOL

[tonysoprano]

It's lasted long enough already. You have a long way to go cowboy.

[WetJet]

Way to keep fighting Tony. This thread is starting to remind me of an old quote: "Never argue with an idiot. He'll drag you down to his level and beat you with experience."

[tonysoprano]

Still pretty hurt by that eh FL? You guys are either very stupid or just too immature to know any better. I bet you didn't learn much from it either.

[tonysoprano]

629 empty talk. Mommy wants you in bed now. And make sure to brush your teeth.

[Flightlevels]

g'night bud.