Sky Regional and CYTZ Updates?

[ng78]

It's been a little quiet in here since Sky Regional got their OC last week. There has been a lot of talk about how they would never get it, or best case scenario they would only start flying in the summer. It sounds to me that if they do get further delayed, it will be for commercial rather than operational reasons. With the players involved (Air Canada and Porter), this is not a big surprise.

I'm curious to see how everything plays out in the next little while ...

[yycflyguy]

Their hope is to start operating March 1st but the contractual "let" that ACPA allowed the company on Scope violation expired February 1st so a contract amending the Scope provisions in our contract would have to be ratified by the membership before the flying could commence. The company is losing LOTS of money having the planes sitting around with trained crews ready to go so, for once, ACPA has a little leverage in current negotiations but I have not even seen a TA, nor is one imminent so a March 1st start is extremely unlikely.

[ng78]

Very interesting, and I forgot about that point too. There is a lot going on at Air Canada these days, and the next couple of months will be crucial. I'm guessing Sky will be trying to do some charters in the mean time, but that is not enough to sustain the operation.

[SII]

Do they have CTA approval to do the triangle yet?

[Localizer]

I'm beginning to wonder if SkyRegional will ever leave the ground. Maybe Air Canada will get tired to the hurdles Deluce has set up and just transfer the leases to Jazz .. the place they should have been all along.

[yycflyguy]

I'm beginning to wonder if SkyRegional will ever leave the ground. Maybe Air Canada will get tired to the hurdles Deluce has set up and just transfer the leases to Jazz .. the place they should have been all along.

Defeats the whole purpose of creating another tier II to whipsaw 3 different groups.

[teacher]

I'm beginning to wonder if SkyRegional will ever leave the ground. Maybe Air Canada will get tired to the hurdles Deluce has set up and just transfer the leases to Jazz .. the place they should have been all along.

Defeats the whole purpose of creating another tier II to whipsaw 3 different groups.

Touche!

[Inverted2]

All that money they saved by going to the lowest bidder is long gone with the delay, and all we get is lower pilot wages in the end. Jazz pays fairly well for D8 pilots.

Those planes have been sitting for months now and haven't earned a dime....

[SSV_Roots]

You think Russ would have learnt a lesson from the last time he tried to do business with Air Canada, it's like Roots Air all over again.

[ChallengerDan]

If Sky has filled their end of the deal (OC, airplanes, crews, etc) AC might be footing the bill while all the talking is going on.

As per the CPA ammendment, the lease-return costs for the 8 CRJs that were returned to the lessors were paid by AC, and I can tell you that things didn't exactly go smoothly.... at all!

[unregistered]

All that money they saved by going to the lowest bidder is long gone with the delay, and all we get is lower pilot wages in the end. Jazz pays fairly well for D8 pilots.

Those planes have been sitting for months now and haven't earned a dime....

Drop in the bucket when you look at the big picture. This is the future of Canadian regional aviation.

[Localizer]

Drop in the bucket when you look at the big picture. This is the future of Canadian regional aviation.

Really ya think? Because if this is any indication of the big picture .. there is a lot of money yet to be wasted. AC could have saved a lot of cash using Jazz in the island. They already have the required experience, they know the operation like no other, and they've done it successfully in the past with a track record to prove it.

[rudder]

CR was asked on the AC year-end financials conference call when the YTZ service would be commencing. He doesn't have a date.

[unregistered]

Drop in the bucket when you look at the big picture. This is the future of Canadian regional aviation.

Really ya think? Because if this is any indication of the big picture .. there is a lot of money yet to be wasted. AC could have saved a lot of cash using Jazz in the island. They already have the required experience, they know the operation like no other, and they've done it successfully in the past with a track record to prove it.

Are you suggesting that a few startup cost issues are an indication of the big picture?

I'm sure Thomas Cook could have saved a lot of cash using other Canadian experience as well.

I'll let you guess how this story ends.

[teacher]

Sorry "LOC" my Jazz buddy I gotta disagree with you on this one. AC will have headaches getting the operation started BUT will save in the long run. No existing airline can match rates being charged by a start up. That's why companies come and go and new "cheaper" ones appear and take their place. Using Jazz would have ensured a smooth and less troublesome start of the YTZ service that I'm sure of.

CR said it months ago, Sky Regional was chosen on the basis of price, period.

[Localizer]

Are you suggesting that a few startup cost issues are an indication of the big picture?

I'm sure Thomas Cook could have saved a lot of cash using other Canadian experience as well.

I'll let you guess how this story ends.

A few start-up cost? I, and I'm sure may others don't consider parked airplanes to be part of "start-up cost", especially when there is no secured terminal space. Everyone seen this coming ... you don't need to be in this industry long to know the history of Robert Deluce and Air Canada. This isn't minor start-up cost as you suggest ...

Which other experienced carrier could Thomas Cook use? I don't consider a here today, gone tomorrow airline as experienced, so besides Jazz who's left? They're not going to use Air Canada or WestJet for the long term considering both airlines have their own vacation divisions. Canjet? They're currently tied up with Transat at the moment .. for how long is anyone's guess. Other than that what are your suggestions for experienced Canadian carriers?

Unless your trying to revive the notion that Jazz (specifically ALPA) killed Skyservice, are you? If so .. please quit kicking that horse.

[Localizer]

Sorry "LOC" my Jazz buddy I gotta disagree with you on this one. AC will have headaches getting the operation started BUT will save in the long run. No existing airline can match rates being charged by a start up. That's why companies come and go and new "cheaper" ones appear and take their place. Using Jazz would have ensured a smooth and less troublesome start of the YTZ service though I'm sure though.

CR said it months ago, Sky Regional was chosen on the basis of price, period.

Hey Teach,

I agree this all comes down to price. But if your theory about cheaper airlines replacing the old one's was correct .. then where's JetsGo? That might be a bit extreme to use them. I just wonder at what point AC will decide to cut its losses on the island and forget the operation all together. Does AC really need to operate out of the island to hurt Porter? There financial reports all show a loss ... so really how long will Deluce wanna hold on? Its an interesting game being played by both sides over the island.

The other side of the coin will be if ACPA allows SkyRegional to operate out of Pearson, if terminal space can't be worked out at the island. On that note .. I thought the let in the contract expired on February 1st? Won't that require another vote from the membership to allow another one?

Cheers.

[Brick Head]

Localizer,

Jazz will not be able to compete on price with Skyregional period. Full stop. By price I mean the price AC pays for the lift, not necessarily Jazz's costs. It is the reason for Sky's existence. Period. If Jazz had sharpened their pencil when asked in 2009 this wouldn't be an issue for AC. Doesn't Chorus have the second highest dividend on the TSX still? Unless Jazz sharpens their pencil and gives AC a reasonable rate? Skyregional and more of it will be the response. Skyregional is an in your face threat from CR. Don't talk yourself into feeling better about the situation by sticking your head in the sand.

Speaking to price it looks like the benchmarking issue is going to arbitration. Not surprising I suppose since the wording (the wording we see anyway) is a mess.

"On February 3, 2011 Chorus and Air Canada agreed to proceed to binding arbitration for the 2009 benchmarking exercise contemplated in the CPA to assess if certain rates charged to Air Canada under the CPA should be adjusted downwards in the period from 2010 forward. It is anticipated the arbitration will cover the methodology of approach for benchmarking as Air Canada and Chorus have yet to agree on a common methodology to compare Chorus’s Controllable Costs against the Comparator Group (and adjustments thereto to account for, among other things, fleet type and size and geographical deployment). Chorus is confident that the methodology it has proposed is both fair and appropriate and has concluded no adjustment will be required to the CPA rates billed to Air Canada in 2010 as a result of the benchmarking exercise, if it is adopted. There can be no assurance that the methodology Chorus has used to estimate the outcome of the benchmarking exercise will ultimately be the basis of conducting the benchmarking exercise as a result of the arbitration process. If Chorus’ methodology is not consistent with any arbitration decision, operating results and financial condition may be negatively impacted."

The Q400's that they will be operating should have been at Jazz? Better pay attention to your own back door. Chorus will own the Q400's and lease them to Jazz.

"On February 7, 2011, Air Canada and Chorus signed a binding memorandum of understanding whereby Chorus will purchase these Q400s and lease them to Jazz Aviation LP at market rates per a market leasing structure."

[teacher]

Can't agrue with you "Brickhead" about the dividend however, we have only one person to blame for the dividend and it ain't anybody who's ever worked for Jazz. Jazz was set up this way to make money for AC and their share holders. Same story as always however to trash the dividend now would destroy the share price and do more harm than good. I hate the fact that we pay out so much but this is what A.C.E. left us with so now we all have to deal with it. I'm sure it will come down in time slowly so as not to adversly affect the share price too much.

As for Jazz not being competitive no amount of pencil sharpening could make us as cheap as Sky Regional. Start ups with everyone on first year pay scales and no legacy costs will always be cheaper. Same thing would happen if A.C.E decided to farm out any of the flying the you guys currently do. You could never match the price. We as established carriers can only make our case in terms of service, safety and opperational experience.

[unregistered]

Other than that what are your suggestions for experienced Canadian carriers?

I'll start with Cargojet. Isn't Jonathan Carroll on their BOD? I know he was when I was a bit more involved in Canadian aviation. Lots of big-jet/international experience there I'd assume.

[Mig29]

Same thing would happen if A.C.E decided to farm out any of the flying the you guys currently do. You could never match the price. We as established carriers can only make our case in terms of service, safety and opperational experience.

I was just about to say that....and can anyone tell us that this may not happen in 5 or more years from now???

The sad truth is that we (pilots) are collectively losing from all of this....whether anyone of us is willing to admit it....we are sliding the scale downhill boys and girls....

[Brick Head]

As for Jazz not being competitive no amount of pencil sharpening could make us as cheap as Sky Regional. Start ups with everyone on first year pay scales and no legacy costs will always be cheaper. Same thing would happen if A.C.E decided to farm out any of the flying the you guys currently do. You could never match the price. We as established carriers can only make our case in terms of service, safety and opperational experience.

Teacher,

I don't think you need to be as "cheap" as Skyservice. Quality has a price tag. It goes without saying. What Jazz needs to be is reasonably priced for the quality it produces. Often an inferior and cheaper product costs more in the end. The problem here isn't that Jazz is more expensive. The problem is the enormity of the excess and Jazz's refusal to address it. Where do you think the money for the dividend is coming from? How do you think CR views this cash flowing from AC to Jazz shareholders? Perhaps at the expense of AC shareholders? The trigger for what is happening now was when Randall threw a quarter or two at AC in the summer of 09 rather than addressing the excess. Granted he has his own mandate to his own shareholders. Unfortunately sometimes conflicting motivations can create very shortsighted solutions.

Now Pandora's box is opening. Inertia will eventually take us to a place in time where quality between the separate providers will be barely distinguishable.

Then what? You see I don't think Randall cares. Or he thinks that no matter what he does he will never be able to compete so he might as well take what he can. Don't know.

[Brick Head]

Same thing would happen if A.C.E decided to farm out any of the flying the you guys currently do. You could never match the price. We as established carriers can only make our case in terms of service, safety and opperational experience.

I was just about to say that....and can anyone tell us that this may not happen in 5 or more years from now???

Nope. It is all about negotiating clout. Working on contract reduces clout substantially.

When you work on contract for the owner of the work, you are at risk. You will always be at risk at renewal. If you are directly employed by the owner of the work there is much less risk as long as you keep your eye on the ball when it comes to job security language in your CBA (scope)

Wait till you hear the EMJ wage.

[ScudRunner]

Bottom line is that AC will save a ton in the long run breaking up the Jazz monopoly on their regional flying, I wrote about this awhile ago this is just the beginning. The Regional airlines that emerge whoever they are will low ball each other to suck at the teet of big red driving AC's cost down and continuing the race to the bottom. We are going the way of the US its just a matter of time, perhaps Jazz realized it what was coming and branched out with the Thomas Cook flying.

Recently I flew down to Wichita on "United" first hop was on Skywest then on Express Jet all painted up in United Express or merger Continental colours. You have to look closely and read the tags near the nose of the planes Skywest, Expressjet, GoJet, Trans State, the list goes on http://en.wikipedia.org/wiki/United_Express

Soon the current Jazz flying could be eroded by the likes of SkyRegional, CMA, Georgian, Porter, Calm Air, Perimeter, BearSkin, Pacific Coastal, EnerJet, North Cariboo? Who knows they all have the ability to grab some/more dash 8s or pick up some RJ and have atter.

Its a matter of time.

[teacher]

Very true guys very true which is why Jazz went after Thomas Cook and why if AC ever thinks about divesting itself of smaller aircraft like the EMB you won't see Jazz folks shying away from the work. It becomes survival of the fittest and evry person for themselves. This is how the race to the bottom begins and that's exactly what CR and his cronies want.