AC low cost carrier closer to becoming a reality

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Mig29
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Re: AC low cost carrier closer to becoming a reality

Post by Mig29 »

150 Qantas Pilots to take Unpaid Leave
PCC Daily News for Pilots
January 4, 2012

SYDNEY, Australia - Qantas Airways Ltd. said around 150 of its 2,000 pilots have elected to take unpaid leave, some to fly with rivals, after it cut services to stem losses at its struggling international flights unit.

The continued letting of pilots by Australia's flag carrier comes as the airline industry faces persistent global economic uncertainty and higher fuel costs, but will entrench divisions with labor unions concerned that Qantas is tarnishing its premium brand by focusing on lower-cost offshoots.

Some of the pilots have been told they can fly with rival airlines, including Middle Eastern carriers such as Emirates.

"This is not an uncommon practice for Qantas and we have done so before when capacity has been reduced, such as during the global financial crisis," a Qantas spokeswoman said in an emailed statement.

The most recent offers of unpaid leave or employment with rivals were announced last year by the pilot's union, which said Emirates had offered in July to take pilots from Qantas for a period of three years.

The airline may still have a surplus of around 400 pilots over the next few years, but this number could vary depending on whether it allocates incoming new Boeing 787-8 aircraft to Qantas International or low-cost offshoot Jetstar, Australian International Pilots Association President Barry Jackson said.

"With respect, they're playing games with young pilots' careers," Mr. Jackson said. "A lot of young guys' prospects of a command post with Qantas are fast disappearing into the horizon with the grace of these partly owned subsidiaries."

Sydney-based Qantas in August inflamed tensions with unions representing pilots, engineers and baggage handlers by announcing 1,000 job cuts and plans to establish a new premium subsidiary in either Singapore or Malaysia and a low-cost joint venture in Japan. Protracted strike action by engineers and baggage handlers prompted it to ground its entire fleet for a few days in October, forcing the government to stop all industrial action and lead the parties into binding arbitration.

The airline is attempting to lower its cost base, which it says is up to 20% higher than rivals, to try and turn around an international unit it says lost more than A$200 million (US$206.9 million) in the year to June 30.
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Fanblade
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Re: AC low cost carrier closer to becoming a reality

Post by Fanblade »

If arbitration happens?

Other than the government possibly padding TA1 in favor of the company in the legislation, as they did with CUPW and Canada Post , it is extremely unlike either party will be able to extract themselves from the terms agreed to in the memorandum of agreement of last spring.

If someone is telling you different they either believe arbitration can be avoided, or they are full of it.
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ratherbee
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Re: AC low cost carrier closer to becoming a reality

Post by ratherbee »

Not necessarily FanBlade,

If ACPA drops the old "we want everything and we want it now" offer on the table, that would allow AC to offer up a new version of what they want the pilots to work under. In other words, if ACPA walks away from TA1 then AC can too, if they want.

If TA1 materializes in any way at all, it will likely be much less than was agreed to last spring.

It looks like the horizon is fading on getting a good contract.
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Fanblade
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Re: AC low cost carrier closer to becoming a reality

Post by Fanblade »

You don't understand the Canada labor code.

If this ends in arbitration it is almost guaranteed to end with TA1 imposed. It is a fact. There is very little room for the arbitrator to do anything else.

Doing what you infer AC might do is bargaining in bad faith. It is called receding horizons and is against the law. In fact ACPA is flirting with this as we speak. Deliberately widening the gap, adding costs, on something that has been agreed on is bargaining in bad faith.

I suspect we will see a bargaining in bad faith complaint against ACPA shortly. This will be followed by the CIRB ordering arbitration. Followed by imposition of TA1.

The only way to see ACPA loose the LCC flying is through negotiation. Not likely.
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Ah_yeah
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Re: AC low cost carrier closer to becoming a reality

Post by Ah_yeah »

Auditioning for a job in the office Fanblade ? :lol:
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DrBoeing
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Re: AC low cost carrier closer to becoming a reality

Post by DrBoeing »

[/quote]
Certainly don't have a crystal ball, but the pension deficit will likely be addressed as that is a common concern. Both groups would love to see the airline grow and prosper, but don't expect the pilots to take wage concessions under the delusion that it is their salaries prohibiting the airline from doing so.[/quote]

I disagree, management does not give a rats behind how the airline does, they are all here short term and are here to line their pockets and then move on.
When you have inclusions in your contract that guarantee a bonus regardless of how well or poor the company is doing, there is ZERO incentive to make things better or profitable. These execs are just riding the wave and when this house of cards comes crumbling down later this year, they will walk away with their golden parachute and tell the media that once again it is the UNIONS fault, just like Milton back in 2003.
This whole LCC is just a ploy for AC to be able to say that due to the inflexibility of the unions that they can no longer operate under the current structure and that due to the now growing pension deficit will require to restructure under CCAA. Does this sound familiar??? Calin Reallygonnascrewyou is already spewing the Milton diatribe of "the model is broken" Well if the model is broken, the Calin is incompetent as this current model is his design.
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vic777
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Re: AC low cost carrier closer to becoming a reality

Post by vic777 »

The Board of Directors and Air Canada Management has always had as their number one objective, the lining of their own pockets with the wealth created by Employees working their lifetimes to create. ACPA should down tools and say no one moves until the thievery stops. ACPA should demonstrate that Management corruption and ruinous Government fees are the disease.
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ratherbee
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Re: AC low cost carrier closer to becoming a reality

Post by ratherbee »

It's great to see the conspiracy theorists get going when faced with the cold stare of reality. Blame it on the Board and the Exec's. If their pay structure is so good, do we want to be paid for performance and ability too? I doubt it. This is a simple diversion from the union to detract from their inability to get a good contract. Let's avoid the rhetoric and be more analytical for the greater good of the employees.

FB, I do understand the Code pretty well and I think you are mostly right. However, if ACPA and AC both agree to start over then who will file the complaint of bad faith bargaining? You and me?

ACPA's only advantage in starting from scratch is that it avoids admitting mistake. AC's advantage is that it can introduce the reality of the economy, increased pension deficit, and harsher competition.
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Fanblade
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Re: AC low cost carrier closer to becoming a reality

Post by Fanblade »

ratherbee wrote:.

FB, I do understand the Code pretty well and I think you are mostly right. However, if ACPA and AC both agree to start over then who will file the complaint of bad faith bargaining? You and me?
RB,

TA1 is a massive departure from the present contract. Massive. Everything from pension to working rules, groupings, bidding restrictions. The cost savings is huge even if you ignore the pension give. AC managed to convince the negotiations committee to make large leaps in departing their legacy contract.

For AC to play the starting over game with ACPA? You have to believe they are willing to walk away from the massive gains in TA1 and allow ACPA to legally reset its position back to the current Legacy contract, plus gains.

When all AC really needs to do is refuse to start over and from a legal perspective any negotiations start from where they left off. Sans the legacy contract.

Allowing ACPA to reset its bargaining position could prove to be a massive loss from TA1 in arbitration for AC.

I think we will see AC refuse to negotiate from anywhere other than where negotiations left off. Which of course they are legally entitled to do.
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rudder
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Re: AC low cost carrier closer to becoming a reality

Post by rudder »

There is nothing in law that makes the contents of a rejected TA the relative starting point for any subsequent negotiation. That is why it is called a 'tentative' agreement. However, AC has the prerogative to dig it's heels in at the bargaining table. But in making that decision it must consider the possible consequences. I suspect that the parties likely disagree on possible consequences given the complete upheaval in the normal course of collective bargaining due to the interventionist Minister of Labour. What happened with the CAW strike was a travesty. What happened with CUPE was deserved due to ineptitude and dysfunction. It remains to be seen how ACPA plays its hand. The ACPA President has already made it clear that there will be no strike.
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Fanblade
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Re: AC low cost carrier closer to becoming a reality

Post by Fanblade »

t
rudder wrote:There is nothing in law that makes the contents of a rejected TA the relative starting point for any subsequent negotiation.
Rudder,

There is plenty of precedent that deliberatly widening the gap between agreed upon positions during negotiations, increasing cost, changing demands, is considered bargaining in bad faith. Remember in this case there is a canyon between where ACPA left off and now wants to retart.

But of course this is strategic on their part. However unless AC chooses to reset the starting position theshelves, they ave every right to demand TA1, or its approximate cost, is the starting place. If ACPA refuses, as they are now? AC will have every right to file a bargaining in bad faith complaint.

The last NC and MEC placed ACPA in a very weak position.
If this ends in arbitration TA1 (minus possibly some padding)will be the result.

I doubt very much AC will negotiate beyond conciliation as ACPA refuses to negotiate from TA1. It will be portrayed as ACPA's fault.

A bargaining in bad faith complaint is likely if ACPA stays the course.

The complaint will push the issue before the CIRB which could trigger the arbitration AC is likely seeking.

If that doesn't happen the company can trigger a crisis at will through lock out. In comes legislation putting the parties in arbitration.

Make no mistake about it. It will be a uphill battle for ACPA to extract itself from TA1.

I too will be interested in the strategy used over the coming weeks. ACPA's strategy must amount to more than just hoping AC negotiates.
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rudder
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Re: AC low cost carrier closer to becoming a reality

Post by rudder »

I don't disagree that history shows that unions that let their internal dysfunction manifest itself in the bargaining process typically end up wearing the result of that dysfunction. AC had to believe that the bargaining committee placed in front of them by ACPA was bargaining in good faith and with the support of at least the accountable decision makers, if not the membership. We all know how that went.

There were actually some very good concepts captured in TA1. But there were also some very poor concepts (especially on the commercial side).

If a proper analysis has been completed by the new bargaining committee and their professional advisors, as well as a proper due diligence on AC as well as appropriate cost and efficiency comparisons, then bargaining direction should not be too much of an issue unless there are actually those that believe that status quo 'plus' is going to keep the doors open and the pension plan solvent.

Best of luck.
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Fanblade
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Re: AC low cost carrier closer to becoming a reality

Post by Fanblade »

rudder wrote:......unless there are actually those that believe that status quo 'plus' is going to keep the doors open and the pension plan solvent.


Yes. Or at least that is the present position of the NC as stated to the membership.

How much is posturing? We will find out.

Even if ACPA negotiated from TA1 I doubt the company would move much if at all. Why would they in this political environment when TA1 is there for the taking through imposed arbitration. Might even get it padded.

Just stating it as I see it. The deck looks stacked IMO.

It will be interesting to see ACPA's strategy as this plays out.
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Last edited by Fanblade on Mon Jan 09, 2012 11:21 am, edited 3 times in total.
vic777
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Re: AC low cost carrier closer to becoming a reality

Post by vic777 »

The obvious solution is different representation through a different Union. Walk away from the ACPA debts.
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LeadingEdge
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Re: AC low cost carrier closer to becoming a reality

Post by LeadingEdge »

Fanblade is wrong on several counts. The original renegotiation of the contract was done outside of the normal, legally binding, process. TA1 was not recommended by ACPA. Because it was conceived outside of normal bargaining, it has no legal value. For the CIRB to impose a contract that was not recommended by the association, and that was turned down aggressively by the membership is inviting legal action.

LE
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Ah_yeah
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Re: AC low cost carrier closer to becoming a reality

Post by Ah_yeah »

Strategy is something both parties have to consider carefully. The company is used to getting their way with labour since CCAA and has the potential to cloud their thinking. TA1 was a very unpopular document amongst the majority and could easily put pilots into a "little to lose" scenario if it is some how "rammed" into effect. An all out strike requires a pretty strong mandate to be taken seriously. A demoralised 50% can do a fair bit of harm to the bottom line. That could stiffle the exit strategy for the institutional shareholders. 1 dollar per share could seem rich if this all unravels.
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Fanblade
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Re: AC low cost carrier closer to becoming a reality

Post by Fanblade »

LeadingEdge wrote:Fanblade is wrong on several counts. The original renegotiation of the contract was done outside of the normal, legally binding, process. TA1 was not recommended by ACPA. Because it was conceived outside of normal bargaining, it has no legal value. For the CIRB to impose a contract that was not recommended by the association, and that was turned down aggressively by the membership is inviting legal action.

LE
Yes formal negotiations were late. They were still entered toward the end of TA1.

Two, the precedence is that the arbitrator pays attention to the recommendation of the NC (MOA) as they are the closest to the action. Not the executive or the membership.

Read the CUPE arbitration IF you want reality.
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bearinmind
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Re: AC low cost carrier closer to becoming a reality

Post by bearinmind »

Just to play devils advocate, are we SURE we are going to be supplying the pilots for LCC or future ventures for AC? Im just not so sure. If this were to happen is it worth hedging our bets a little?

Im talking as pilots not as the company...
Our competition for regional flying is Jazz and Sky Regional. Is it worth approaching the Sky Regional group with ACPA membership? It seems to be a no brainer, lets us negotiate the rates for SR regional flying. Jazz, I dont know how to prevent that group from competing, Global solutions? The crossover LOU? Fill the ranks of Jazz with people that want to work here, maybe they want to protect this job?

Just looking for a good hedge, I just dont feel like we are in control of this thing.
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Fanblade
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Re: AC low cost carrier closer to becoming a reality

Post by Fanblade »

They want you concerned beyond what is really at stake. They want you demoralized. Don't allow it.

Worst case we will see TA1 rammed our throat minus some of the pay increases through government legislated arbitration.

If we give in now? We get TA1.

If you want better? Just remember this wont be easy.

That's it. No sugar coating.
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ratherbee
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Re: AC low cost carrier closer to becoming a reality

Post by ratherbee »

No...and I am repeating myself LE, we will get LESS than what was offered.
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