Air Canada sending Embraer 175/190s to Express

[mbav8r]

Very concise post, the only thing I would disagree with is below. The nice thing about Canada is CCAA does not get you out of contracts unless you can prove they're are onesided in favor of the other company. I believe at best, CCAA might get the rates reset to what CR is trying to attain in the courts presently.

As for Jazz, it may ultimately take an AC CCAA filing to have the ability to outsource the current Jazz/Express flying to other bidders prior to 2020.

This is from 2009, but the context is much the same,

CIBC WM

Jazz Air Income Fund
Jazz (JAZ.UN-SO) provides regional services for Air Canada. In a CCAA filing, the
key document governing the two companies’ relationship, the Capacity Purchase
Agreement (CPA), is subject to opening and negotiation. However, we believe a
bankruptcy court would have to find the contract well offside in terms of market
rates for operations and we believe Jazz provides service to Air Canada at rates
comparable to any of the U.S. regionals and typically exceeds them. Part of the
2010 rate reset process for the CPA already includes a benchmarking process on
cost to U.S. regional carriers.
We believe Jazz would also be ready to provide direct financing or would agree to
changes in the CPA that are mutually beneficial in order to avoid a CCAA filing.
One option for Air Canada in a CCAA filing could be to modify the existing scope
clause with its unions. The current scope clause limits the size, number and type
of aircraft and capacity Air Canada is allowed to contract to Jazz. Jazz has lower
labor costs and more flexible work rules than Air Canada. If the CPA was
terminated, we do not believe Air Canada would find it more cost effective to
internalize the operation.
The scale of services that Jazz provides Air Canada should also not be
underestimated. Jazz provides airport operations for all Air Canada destinations
in Canada other than the largest eight airports and provides service to 86 of 115
North American destinations. We believe the scope of the operation would make
it very difficult, if not impossible, to take over completely. As well, there is no
other entity in Canada with sufficient resources to operate 133 aircraft covered
under the CPA. Installing a transplant airline from U.S. regional airlines is a
possibility but it would certainly take time leading to severe disruption to
service, which we expect the government would not tolerate for long. We expect
Air Canada would not be able to reduce expenses materially in this scenario.

In the event of a strike, assuming Air Canada can maintain its customers
systems, Jazz would continue to operate. In previous labor actions, regional
carriers have typically seen their loads increase as they carry passengers
normally carried by the mainline.

[Rollercoaster Rider]

Thank you Rudder,If you are an ac employee ACPA should elect you as thier new leader as you are the only one with a solid grip on the true reality of the situation.

[swervin]

Thank you Rudder,If you are an ac employee ACPA should elect you as thier new leader as you are the only one with a solid grip on the true reality of the situation.

Fortunately Rudder does not work for AC.

[Fanblade]

Rudder,

So your playing the doomsday card too. Well done. It's not enough that the present CEO has played fear to extremes levels. That the union has done the same in an effort to engage the membership. Why not everyone jump on board.

Last year TA1 had an LCC in it. For many reasons I didn't believe it then. It was a negotiating distraction. A method to show pay increases and advancement that would never exist. But there is no point in getting into that now. Today it is off the table.

Or should I say what an LCC is, has drastically changed. What did it change too? CPA providers. Lots if them. And a lot more flying at them.
Y
In November AC tabled 118 seats. EMJ would go to a new company that they referred to as a domestic LCC. Pilots would go with it. Would be able to return when spot opened back at AC or stay at New LCC. Massive loss of flying at mainline.

Last best final offer Feb 14, 2012. 90 seats. Regional ASM's increased 80% to 20% of mainline. E175 gone.

So what does all this likely mean? Ya know without the fear.

Transboarder joint venture and Westjet's regional. AC's clock will get cleaned if it uses Jazz in competition. I see Jazz getting refleeted right up to 90 seats in an effort to spread cost over more seats. I see multiple CPA players. More than 2. I see Jazz in a very difficult position at CPA renewal. 2016 or 2020?

I see the American regional model being put in place and yes it will impact the mainline fleet. E175 gone. E190/319 reduced. But it will have massive affect at the regional level. All jobs pulled from mainline eventual going to the lowest bidder.

[rudder]

So your playing the doomsday card too.

Anybody who can read the news or access the internet has figured it out. Why is it so difficult for those that will be the most affected to recognise their circumstances?

Don't believe that things always work out for the best? Just ask a (former) AVEOS employee. Perhaps being proactive may have changed nothing. Or perhaps it could have changed everything.

Do you know why they put old Generals out to pasture? Because they never leave the past battles in the past. Until the parties start to look forward rather than backward the outcome is virtually assured. CR wins.

[Fanblade]

So your playing the doomsday card too.

Anybody who can read the news or access the internet has figured it out. Why is it so difficult for those that will be the most affected to recognise their circumstances?

Your not listening. Or are you just disappointed? The last offer from the company, if implemented, would see mainline retain 91 seats and up. It saw an 80% increase in flying 90 seats and below. Will it have an impact on the E and 319 fleet? Yes.

Not doomsday though. Not massive lay offs.

Open your eyes. The corporation is still hiring and training up.

Correction. 80% increase in ASM's from current.

[rudder]

Your not listening. Or are you just disappointed? The last offer from the company, if implemented, would see mainline retain 91 seats and up. It saw an 80% increase in flying 90 seats and below. Will it have an impact on the E and 319 fleet? Yes.

Not doomsday though. Not massive lay offs.

Open your eyes. The corporation is still hiring and training up.

AC has solvency issues and it will need to generate significantly greater free cash flow going forward than it is generating today. Just because AC does not advertise the fact does not mean that it is not the case. Ever heard of Moody's?

Will the fleet reassignment that you have described meet those needs? I guess that we will find out at AC's next attempt to access the capital market. Hope that it will be a more successful attempt than Porter.

And as for hiring, every airline in history has hired right up until the time that they decide to furlough. Day-to-day planning, that is all. Just like a CCAA petition, you will hear about it the day it happens, not before. Wouldn't it be great to go to sleep at night and not worry about waking up to the headline that your airline is bankrupt? That's right, you would have to be a WJ employee to have that security.

[Fanblade]

Rudder,

Your not going to get an argument out of me that AC needs to restructure to survive. It wasn't done in 2003. In fact the restructuring hang over is part of the problem today.

I think Calin is attempting to restructure this Corp as we speak, and is doing so with the back stop of the PMO's office. ACPPA is even apparently on the table. Change always makes people nervous.

All I am saying is that the corporations last position to ACPA IMO was not doom and gloom. The irrational fear that has been woven is getting out of hand.

[Rockie]

No one questions the need for change and the employees have proven themselves willing to accept change for the long term benefit of the corporation and their jobs. A decade of repeated concessions prove that.

It won't do any good though if there isn't a seismic change in management attitudes, style and competency or we will find them coming after us for more and more to cover for their own failures. Give us a management team worthy of believing in and you would be shocked what employees are willing to do.

Not with this last bunch in a long line of world class clowns though.

[Takeoff OK]

Why does everyone assume Jazz would be the benefactor in an Embraer offload? If we're going to look to the US model of fleet distribution, then the lowest bidder will get the hulls. Smart money would be placed on Sky Regional for this one because they absolutely have the ability to undercut any bid Jazz could put forward -- unless,of course, there is something in the scope language that I'm missing, because NO ONE WILL POST THE DAMN THING HERE!!!

[Rollercoaster Rider]

Thats it dropping 15 75 seat hulls and giving all a raise will fix everything...Maybe if it was 10 years ago.If you think that will fix it you better start working on plan B.

[Fanblade]

Why does everyone assume Jazz would be the benefactor in an Embraer offload? If we're going to look to the US model of fleet distribution, then the lowest bidder will get the hulls. Smart money would be placed on Sky Regional for this one because they absolutely have the ability to undercut any bid Jazz could put forward -- unless,of course, there is something in the scope language that I'm missing, because NO ONE WILL POST THE DAMN THING HERE!!!

ACPA has tight scope language. Some of the tightest in North America.

Jets at feeders limited to 50 seats
exception for 16 75 seat jets
Only one feeder (Jazz) allowed
Regional ASM ratio 12:100

The present scope language prevents the transfer of E jets from mainline. The vultures are circling at the prospect of an arbitrator gutting ACPA's scope language.

Last on the table from AC.

Jets at feeders limited to 90 seats.
multiple CPA players.
regional ASM's 20:100

[Fanblade]

Thats it dropping 15 75 seat hulls and giving all a raise will fix everything...Maybe if it was 10 years ago.If you think that will fix it you better start working on plan B.

RCR,

I know I have played down the magnitude of the scope changes tabled by the corporation. They are not however miniscule. It will affect more than 15 frames without a doubt. 2 sky regional RJ900 could replace a 321. Up the frequency. You get the picture. It is why their are concerns about jobs at mainline.

However as bad as the job situation could get based on that alone? It is backstopped by the ASM ratio. With Q400's & rj900 at the regionals and the corresponding drop in Mainline ASM's that extra 8% will be filled fast.

Not really 8% increase in regional flying. As Mainline ASM drops the percentage at regional increases even if unchanged. Think maybe 6% increase in regional ASM's. Worst case 6% of 3000 pilots equals 180 mainline pilot jobs. Those jobs don't transfer over night. It will take a couple of years. No one is at risk IMO. Best case AC expands internationally with 787 arrival. No reduction in mainline jobs.

Problem is people are talking 1000's of jobs. I don't see it in the corporation's proposal. I did in the first one. Not this one.

RCR,

As you can see I'm dancing a tight wire here. I do not want to fuel more fear. However your belief that the changes proposed are far to small? It tells me you don't understand the significance.

To my fellow AC pilots,

I don't like it either. I'm not trying to sell it. Just calling BS on the level of fear mongering.

[Fanblade]

No one questions the need for change and the employees have proven themselves willing to accept change for the long term benefit of the corporation and their jobs. A decade of repeated concessions prove that.

It won't do any good though if there isn't a seismic change in management attitudes, style and competency or we will find them coming after us for more and more to cover for their own failures. Give us a management team worthy of believing in and you would be shocked what employees are willing to do.

Not with this last bunch in a long line of world class clowns though.

Rockie,

I know I am new. I know i didn't live through the last decade. I am also sorry to tell you the last restructuring was not a restructuring. The players were thieves not interested in viability.

We are not productive enough.

No reserve time balancing
to much time in training
one minute out bound rule
Bank time. Overtime taken as time off rather than cash cleared.
Drop flying after taking a draft.
Drop flying with too much block growth.

Those are just off the top of my head.

[HavaJava]

We are not productive enough.

No reserve time balancing
to much time in training
one minute out bound rule
Bank time. Overtime taken as time off rather than cash cleared.
Drop flying after taking a draft.
Drop flying with too much block growth.

Those are just off the top of my head.

Excuse my French...but ARE YOU #%$@ing SERIOUS!?!?!

The fact that you even brought up reserve as being unproductive proves that you are out to lunch. The only thing a reservist has going for them is the ability to pass/lack of time balancing. For the last 3 years on reserve that has meant almost nothing to me. Anytime I choose a juicy trip by using my seniority rights, the pairing is either changed by the time I get to the airport or it is gutted and goes from a 23 hour 4 day pairing to a 17 hours 4 day pairing. The narrow body reserve pilots are working their asses off...I'm sorry, but there are no significant productivity gains to be found on narrow body reserve.

Here are a list of items that reserve pilots have at some other airlines. I would gladly give the company Best Fit or time balancing for even one of these.

- All reserve pilots are paid a minimum of DMM
- All days off are guaranteed days off
- Ability to group days off in patterns other than designated by company
- block holder privileges once awarded a pairing
- Can't be extended another night unless at pilots option
- I'm sure there are more, but these are off the top of my head

Reserve rules at Air Canada are draconian. Reservists have no rights compared to block holders. Now, I hear the argument, don't bid to the bottom of a plane if you don't like reserve. This is fair enough, but I don't think it's a reason to make reserve even worst than it is now.

Dropping flying after a draft!?!?! NOT THE PILOT's FAULT!!! It's the companies fault for not properly staffing the airline

One minute rule??? I haven't had a DMM less than 80 hours for the last 2 years. On average I've been flying 85 hours a month. Without the 1 minute rule I'd be flying 90+ a month every month. We might as well throw the science on pilot fatigue out the window. If the company was serious about having pilots be more productive then they would make the pairings more productive instead of having the vast majority of EMJ pairings be 4-dayers under 20 hours of credit.

Maybe there are some productivity gains that can be painlessly made on the wide-body (doubt it after being a 767 RP), but the narrowbody pilot's are overall extremely productive.

HJ

p.s. I just remembered, one thing that makes AC wide-body pilots extremely productive compared to most other large airlines is that we consistently fly sectors with 2 pilots where other airlines use 3 and sectors with 3 pilots where others use 4. Also, allowing the company to use RPs instead of augment FOs or Capts is a huge productivity gain for the company.

[hithere]

[quote][/quote]
"2 sky regional RJ900"

So Sky Regional would get some RJ 900 when Jazz already operates the exact same aircraft(RJ 705 is the exact same airframe with 75 seats instead of 90)
How would that be cost effective? Answer: Because they will fly them for peanuts, just like the are on the DH4.Brilliant! Well done Sky!

[Mig29]

"2 sky regional RJ900"

So Sky Regional would get some RJ 900 when Jazz already operates the exact same aircraft(RJ 705 is the exact same airframe with 75 seats instead of 90)
How would that be cost effective? Answer: Because they will fly them for peanuts, just like the are on the DH4.Brilliant! Well done Sky!

Why is that the fault of Sky pilots?? I'm sorry, but the guys who don't have a job will do it, it's been proven times and times again in our industry. ACPA let Sky slide in being blinded by their outrage that Jazz is flying for Thomas Cook. Now, I'm not saying that was the right path for Jazz either, and that could have been all resolved "in house" before allowing a NON-UNIONIZED airline under your wing. But ultimately Calin outplayed us ALL in this game and now we are ALL going to pay the price. Guy should get a Nobel Prize!

AC will lose portion of it's flying to Jazz/Sky/XXX and Jazz will give up smaller turbo-props to Georgian/CMA/EVAS, and we will ALL work on bigger plans for less.

How exciting!! Can't wait for it!

[mbav8r]

I'm not saying that was the right path for Jazz either

Mig, what path should Jazz take, exactly? The path AVEOS took?
Calins words,
Mr. Rovinescu said it was Aveos’ failure to diversify its business
The company failed in part because of productivity issues and its inability to adequately diversify its customer base, Rovinescu said.

So, I'll ask again, what path should Jazz take?
Death by 2020 or diversify it customer base?

[biatch]

Jazz is probably poised to gain from this. So is Sky Reg and some others of course, including US regionals/ Star Alliance partners. ALPA has a very strong team in place. It is unfortunate though that the situation has deteriorated to this. Too bad pilots can't stick together.

[Fanblade]

Excuse my French...but ARE YOU #%$@ing SERIOUS!?!?!

HavaJava,

I get your point about the reserve rules. I'm new. I live them. They aren't even legal IMO.

But i was specifically referring to productivity. Starting with 10 reserves at the beginning of the month. The top 5 pass everything. The bottom 5 fly out. Month end comes and havoc breaks out. Capt as RP. Draft.

Think about it. Our collective agreement is designed to drop flying. It was great in the day when bloating employment was the name of the game for unions. But it reduces productivity. Your too expensive not to be competitively productive.

Between poductivity, pension and scope? That is why we are headed for arbitration. The government realizes we won't give to become viable. So they will take to make it happen. In their minds they are saving Air Canada employees from themselves.

[accumulous]

Excuse my French...but ARE YOU #%$@ing SERIOUS!?!?!

HavaJava,

I get your point about the reserve rules. I'm new. I live them. They aren't even legal IMO.

But i was specifically referring to productivity. Starting with 10 reserves at the beginning of the month. The top 5 pass everything. The bottom 5 fly out. Month end comes and havoc breaks out. Capt as RP. Draft.

How does WestJet's contract compare to all that?

[Fanblade]

Excuse my French...but ARE YOU #%$@ing SERIOUS!?!?!

HavaJava,

I get your point about the reserve rules. I'm new. I live them. They aren't even legal IMO.

But i was specifically referring to productivity. Starting with 10 reserves at the beginning of the month. The top 5 pass everything. The bottom 5 fly out. Month end comes and havoc breaks out. Capt as RP. Draft.

How does WestJet's contract compare to all that?

No reserve. All extra flying covered with voluntary draft. There is no drop for draft. Just pay.

[ChallengerDan]

ACPA let Sky slide in being blinded by their outrage that Jazz is flying for Thomas Cook.

Its been argued time and time again here. Members of this forum have said repeatedly that Jazz is one of the reasons AC is having difficulties. That was before the current round of negotiations that started last year.

While I am not familiar with the 757 rates, the Jazz pilot group being socialists, it seems that Jazz is actually charging market rates for the TC operations, it is just not going exclusively to the 757 pilot but spread to all of the pilots. I say this is great. Shouldn't unions be exactly about that? The greater good of everyone? I do realize that ACPA doesn't work like that and that it can demonstrated that their system is more fair. It really depends on your background, convictions, ethics, etc. I think I can say that ACPA WAWCON system is a little be more design on the capitalist system, while Jazz' is a little be more socialist by design. As long as each member base is ok with it I don't see a problem. I am not pilot, I'm an AME. I don't get a different salary wether I sign-off on a L35 or E175 even though the E175 flies 10 time more people.

When ACPA let the SkyReg go through last year, they failed to realize that protecting what is right beneath them actually protects themselves, as per design they should always have it a little better than who is right after them. After looking out for themselves, Jazz unions should probably be their biggest allies, and that is not only for pilots. As long as everyone flying the Maple Leaf are not cooperating, CR is always going to win. Always. He IS that smart.

ACPA and Alpa need to remember that we are all fighting for the same thing: WAWCON. Let the guys at the top fight for market share. Support each other. let them fight at the top, not among ourselves.

[Fanblade]

. As long as everyone flying the Maple Leaf are not cooperating, CR is always going to win. Always. He IS that smart.

This is about surviving. Not winning.

AC didn't create the low cost feeders in the US but they have to compete with them

AC didn't put all the US carriers through CH 11 which is far harsher on employees than CCAA. But they have to compete with them.

AC didn't create WJ but .............

AC isn't creating a WJ regional but...........

Compete or die. That is our choice. Harsh I know.

In that light I don't think the leaderships intention at ACPA toward Jazz was malice when they allowed Sky.

It was acceptance of reality.

[Lost in Saigon]

I was told by a manager that ALL the Embraers and ALL the Airbus A320/321's will be gone soon. Right out of the Air Canada system. They will be replaced with either B737-700's or Airbus A320 "Enhanced".

The A319's will go to the new Low Cost Carrier in a high density all economy configuration (approx 140 seats) because no other carrier wants them. Some B767's will also go to LCC in the present J/Y configuration and then will probably be converted to high density seating as well.