A new trend: Canadian Airlines Wet-Leasing foreign aircraft.

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Gilles Hudicourt
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A new trend: Canadian Airlines Wet-Leasing foreign aircraft.

Post by Gilles Hudicourt »

If a Canadian airline wants to Wet-Lease a foreign carrier, it must make a request to the Canadian Transportation Agency (CTA). This is according to the Air Transportation Regulations. I had always been under the impression that such a request could only be made for specific reasons when the Canadian Airlines was in a bind, like when one of their aircraft broke down and that no other replacement aircraft could be sourced in Canada. In fact Article 8.2 (3) (j) of the Air Transport Regulations, states that a licensee shall in its applications for Wet-Leasing a foreign aircraft provide:
an explanation of why the use by a licensee of all or part of an aircraft with a flight crew provided by another person is necessary.
If the regulation requires an explanation, one would think that such an explanation carried some weight and determined whether the application would be approved or denied by the CTA. I recently made a request to the CTA, under the Access to Information Act, to ask to see Sunwing's application for the Wet-Lease of the two EuroAtlantic 767s last summer and this summer. I received a copy of both applications and I was puzzled to note that neither application contained a reason as to why they needed to Wet-Lease a Foreign Aircraft. I wrote to the CTA, noting that Sunwiing's application for Wet-Leasing the EuroAtlantic 767s lacked any reason as per the Regulations.

Here is their reply:
I checked with the divison responsible for this function and was advised that application are not denied because documentation is missing. It is at members discretion to request additional information if they feel it is required. There is no reason provided on file.
It seems that no reason must be provided. So any Canadian Airline can, as of now, Wet-Lease foreign aircraft to do international flights for them, no questions asked. It's a free-for-all. Sunwing has been doing it for some time, now Westjet is also doing it with American and Thomas Cook 757s flying for them. And this is not to replace an aircraft that has broken down. It is done for months at a time, year after year, for seasonal flights. But even then, there is nothing in the law that says that the flights must be seasonal to be approved. So if any foreign airline has idle aircraft and crews they can just wet lease them to Canadian airlines, no questions asked. And we all know that because Europe has a season inversed to ours, some long haul aircraft are idle in Europe in summer, and some short haul aircraft are idle in Europe in the winter. So these can be dumped in Canada at low cost, with the blessing of Canada's Transporation Agency.

Where is this leading ? Is anyone listening ? Is anyone paying attention ? I am trying to raise an alarm here. I'm crying fire and no one is budging. Are we waiting for the house to burn down before we realize that we should have done something to save it ?

Could whomever plays golf with the Minister of Transport and asked him to block Emirates and Etihad use his pull to tell the Minister once again that we are on a slipery slope with this Wet-Lease trend ?
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rudder
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by rudder »

Time to have a Pilot Rally on Parliament Hill.

Please pick a sunny warm day :D
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Takeoff OK
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by Takeoff OK »

Gilles, the only way we are ever going to see any movement on any of these issues is if the media gets involved. This could be difficult because as someone stated in another thread, the result of all these shenanigans is cheap vacations for the Canadian public; so nobody outside of the industry cares.

Perhaps it would be worth approaching the people at W5 or The Fifth Estate about these issues. You can even point them to the "Flying Cheap" episode of Frontline to show that there is precedence for stories on the state of aviation. With all of the research and footwork you have put in, I doubt there is anyone more appropriate for approaching the media. I would also mention the replies you received from the minister's office a month or so ago that clearly displays the lack of legal conformity going on by the parties involved.

Ornge was a big story because it wasted tax payer money. It will not be as easy on this issue. Your best slant is the farming out of Canadian jobs within a struggling industry/economy. Maybe that'll work.

I also think there is no point going to any Quebec media outlets, unless it is to plant a seed. This has to become a story on a national level for anything to change.

Thanks for all of your hard work. It is appreciated.
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mbav8r
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by mbav8r »

http://www.bizjournals.com/pacific/news ... awaii.html
"WestJet said Wednesday that it is expanding its seasonal service between Calgary and Edmonton in the western Canada province of Alberta and Honolulu and Maui in Hawaii with the addition of two Boeing 757-200 aircraft".

Didn't see this coming, at all! sarcasm on, wonder when they'll announce a couple more 57s out east!
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Gilles Hudicourt
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by Gilles Hudicourt »

For those that have not understood. Thomas Cook used to contract Jazz to fly their 757s during the winter. The contract was terminated early and signed with WestJet instead. I thought Westjet aircraft and crews were going to do these flights but no. Westjet returned the favour to Thomas Cook by Wet-Leasing Thomas Cook 757s and British pilots to do the flights that were previously done by Canadian pilots.

Do you see a pattern here ?

Is the CANADIAN Transportation Agency that approves all this not at all concerned ?
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KAG
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by KAG »

Not entirely correct.
We did sign for 2 aircraft BUT one is a backup with a small allotment of flying for it (we had mechanical IROPS last year and would like to avoid that again). Meanwhile we (WJ pilots) have a lot more flying dropped onto our plates. Still being a greedy pilot I would like to do all the flying and get a 57 type rating but the economics just dont support this.
Not the ideal situation but it could be a whole lot worse. Personally, IMHO I think this will be ongoing untill we get 787's or something bigger, Time will tell.
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whiteguy
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by whiteguy »

KAG wrote:Not entirely correct.
We did sign for 2 aircraft BUT one is a backup with a small allotment of flying for it (we had mechanical IROPS last year and would like to avoid that again). Meanwhile we (WJ pilots) have a lot more flying dropped onto our plates. Still being a greedy pilot I would like to do all the flying and get a 57 type rating but the economics just dont support this.
Not the ideal situation but it could be a whole lot worse. Personally, IMHO I think this will be ongoing untill we get 787's or something bigger, Time will tell.
This is why the second aircraft was leased this year......

"The decision to lease a second aircraft is a direct response to demand for service, and the additional flying will allow us to offer three additional daytime flights this winter at low fares. With this additional aircraft, we're pleased to offer each route one additional round-trip flight per week over last year."
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Donald
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by Donald »

KAG wrote: but the economics just dont support this.
Then why do it at all? (sarcasm)
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tsgas
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by tsgas »

Donald wrote:
KAG wrote: but the economics just dont support this.
Then why do it at all? (sarcasm)
To be competitive with AC and grow the services provided to their guests.
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ea306
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by ea306 »

This is nothing new.

Canadian Companies have been wet leasing aircraft to Europe and other parts of the world for years. Sky Service, Canada 3000, ROYAL; to name just three from the 1990s and 2000s.

If Canada closes out Wet Leases from foreign countries, you could expect Europe to reciprocate in kind. The result? Loss of Canadian jobs. It may sound counter intuitive...but it is true. Not just pilot jobs either.

Companies will use wet leases when they see that a commercial advantage exists. This is the world of business. Westjet, Air Canada and Sunwing use or have used foreign carriers for wet leases. like it not; Wet Leases from Foriegn Carriers will be operating in the Canadian Market place for years to come.

As pilots we may see foreign registered aircraft being flown by a foreigner. But what does a company see? A cost effective way to serve a market without placing undue financial risk to their operation.

The B757 operation at Westjet offers a commercial advantage that the B737 NG cannot offer in the Hawaii market. It is prudent on WestJet's part to keep their costs down while they compete in the market.

All operators in Canada have the right to conduct business & utilize Foriegn Wet Leases as they see fit. It is up to each operator to decide what is in their financial best interests to their shareholders and to act prudently on their shareholders behalf.

Sunwing the tour operator is doing much the same thing only on a larger scale during the winter months. As much as we would rather see more Canadian Registered aircraft operated by Canadian Pilots, the reality is that if Canada was to close the door to foreign wet lease, it would be very bad for the Canadian Pilots operating in Europe on wet leases if Europe was to take the same position. Not only that: what of the 1500 or so employees at Sunwing? Do they not contribute to the Canadian economy? Indeed they do. What about the consumer? Government supports competition that is good for the consumer.

The government has to consider all aspects of the general public when they make policies.

Wet Leases are a tool that commercial aviation uses to be competitive in providing the services to the public. No matter what we think as pilots, it will not be just our voices heard when appealing to the government on a issue as this.

Like it not: This could be why the outcome to these complaints are not meeting the expectations of a protesting pilot population.
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Jean-Luc Monette
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by Jean-Luc Monette »

ea306 wrote:This is nothing new.

Canadian Companies have been wet leasing aircraft to Europe and other parts of the world for years. Sky Service, Canada 3000, ROYAL; to name just three from the 1990s and 2000s.

If Canada closes out Wet Leases from foreign countries, you could expect Europe to reciprocate in kind. The result? Loss of Canadian jobs. It may sound counter intuitive...but it is true. Not just pilot jobs either.

Companies will use wet leases when they see that a commercial advantage exists. This is the world of business. Westjet, Air Canada and Sunwing use or have used foreign carriers for wet leases. like it not; Wet Leases from Foriegn Carriers will be operating in the Canadian Market place for years to come.

As pilots we may see foreign registered aircraft being flown by a foreigner. But what does a company see? A cost effective way to serve a market without placing undue financial risk to their operation.

The B757 operation at Westjet offers a commercial advantage that the B737 NG cannot offer in the Hawaii market. It is prudent on WestJet's part to keep their costs down while they compete in the market.

All operators in Canada have the right to conduct business & utilize Foriegn Wet Leases as they see fit. It is up to each operator to decide what is in their financial best interests to their shareholders and to act prudently on their shareholders behalf.

Sunwing the tour operator is doing much the same thing only on a larger scale during the winter months. As much as we would rather see more Canadian Registered aircraft operated by Canadian Pilots, the reality is that if Canada was to close the door to foreign wet lease, it would be very bad for the Canadian Pilots operating in Europe on wet leases if Europe was to take the same position. Not only that: what of the 1500 or so employees at Sunwing? Do they not contribute to the Canadian economy? Indeed they do. What about the consumer? Government supports competition that is good for the consumer.

The government has to consider all aspects of the general public when they make policies.

Wet Leases are a tool that commercial aviation uses to be competitive in providing the services to the public. No matter what we think as pilots, it will not be just our voices heard when appealing to the government on a issue as this.

Like it not: This could be why the outcome to these complaints are not meeting the expectations of a protesting pilot population.
ea306, I see that you have given up... now please get out of the way of those who haven't!

FWIW, Transat and Air Transat have always played fair WRT wet leases and type ratings...
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gonnabeapilot
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by gonnabeapilot »

Did Transat not use Thomas Cook to operate a large amount of their UK flying for a number of years? It may not have been a true wet-lease arrangement but it's the same thing. The tour operator using a foreign airline to provide a large amount of lift on certain routes because it offered them a cost advantage... If I remember correctly, Transat pilots had to battle pretty hard and even threaten strike action in order to get language in their contract that prevented Transat from taking greater advantage of foreign providers of lift. I wouldn't exactly call that playing fair.
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Gilles Hudicourt
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by Gilles Hudicourt »

gonnabeapilot wrote:Did Transat not use Thomas Cook to operate a large amount of their UK flying for a number of years? It may not have been a true wet-lease arrangement but it's the same thing. The tour operator using a foreign airline to provide a large amount of lift on certain routes because it offered them a cost advantage... If I remember correctly, Transat pilots had to battle pretty hard and even threaten strike action in order to get language in their contract that prevented Transat from taking greater advantage of foreign providers of lift. I wouldn't exactly call that playing fair.
Not quite the same. Transat used Thomas Cook strictly on UK-Canada flights, something that Thomas Cook, a British Carrier, could legally do without Transat's blessing and cover at the CTA. It was like a "code sharing" for charter airlines.

Here is the relevant CTA decision

https://www.otc-cta.gc.ca/eng/ruling/113-a-2008

So this is more in line with the present relationship between Corsair and Sunwing, except that Sunwing and Corsair both belong to TUI, whereas the Transat-Thomas Cook relation was purely contractual.

It does not mean I agreed with it, I did not, and you are correct that this was one of the major issues of our last contract negotiations where we negotiated a limit that Transat could outsource to non Air Transat carriers, including Canadian ones such as Canjet, Westjet etc.

In the case of Westjet, the Thomas Cook aircraft and crew did flights between Canada and a third country, namely the US. This, Thomas Cook could never do unless under Wet-Lease from a Canadian Carrier. This is also the case with the EuroAtlantic 767s that Sunwing Wet-Leased. They are doing flights between Canada and third countries, meaning other than Portugal.
ea306 wrote: Companies will use wet leases when they see that a commercial advantage exists. This is the world of business. Westjet, Air Canada and Sunwing use or have used foreign carriers for wet leases. like it not; Wet Leases from Foriegn Carriers will be operating in the Canadian Market place for years to come.

As pilots we may see foreign registered aircraft being flown by a foreigner. But what does a company see? A cost effective way to serve a market without placing undue financial risk to their operation.

The B757 operation at Westjet offers a commercial advantage that the B737 NG cannot offer in the Hawaii market. It is prudent on WestJet's part to keep their costs down while they compete in the market.

All operators in Canada have the right to conduct business & utilize Foriegn Wet Leases as they see fit. It is up to each operator to decide what is in their financial best interests to their shareholders and to act prudently on their shareholders behalf.

Sunwing the tour operator is doing much the same thing only on a larger scale during the winter months. As much as we would rather see more Canadian Registered aircraft operated by Canadian Pilots, the reality is that if Canada was to close the door to foreign wet lease, it would be very bad for the Canadian Pilots operating in Europe on wet leases if Europe was to take the same position. Not only that: what of the 1500 or so employees at Sunwing? Do they not contribute to the Canadian economy? Indeed they do. What about the consumer? Government supports competition that is good for the consumer.

The government has to consider all aspects of the general public when they make policies.

Wet Leases are a tool that commercial aviation uses to be competitive in providing the services to the public. No matter what we think as pilots, it will not be just our voices heard when appealing to the government on a issue as this.

Like it not: This could be why the outcome to these complaints are not meeting the expectations of a protesting pilot population.
EA306, let's suppose a large company with 80 B-737NGs from an emerging economy is in financial difficulty. It owns a large fleet which has been financed by its local government and they are stuck with them for the local government cannot declare bankruptcy nor can they return aircraft purchased at public expense. In that country, B-737NG Captains earn $50K, first officers earn about $25K and the average Cabin crew earns around $11K. This company suddenly finds a contract with a Canadian Carrier to send 15 aircraft on Wet-Lease year round, and an additional 20 on Wet-Lease for six months, during our winter season, which suits it fine because their high season is opposite to Canada's. The aircraft are provided at a bargain price. Even engineers are sent to maintain them. All these people are lodged in an inexpensive airport area motels, two to a room for the Cabin crew, and get a small per-diem which they mostly send home, for they cook their meals in their rooms. The cabin crew all speak perfect English and are all University graduates.

The CTA approves the Wet-Lease because it make economic sense, is in the public interests in that it allows for Canadians to travel ever cheaper at a very low cost to the Canadian carrier.

This being a Wet-Lease, the Foreign crews do not need Canadian Work Permits and are not subject to Canadian Federal Labour Laws. The Foreign crews and mechanics are not subject to Transport Canada oversight, as long as they meet ICAO Annex 1 requirements and the rules in their home country. The aircraft need to be maintained under their home country's rules, which must, at a minimum, meet ICAO Annex 8 standards, not Transport Canada's. The Regs the aircraft will be operated under will be their home country's' which must meet at the minimum ICAO Annex 6, not Transport Canada's. This, and nothing else, is what Transport Canada will check, before it issues a Foreign Carrier's certificate to that Airline. The foreign airline will provide to TC all the paperwork from its home country attesting to full ICAO and local compliance. And on that basis, a Canadian Airline will be selling tickets to Canadians in Canada, for flights originating in Canada while the passengers will be flying on foreign aircraft operated and maintained by foreign crews, under the rules of another country. There is a Canadian requirement that they notify the passengers about this, which will appear in the fine print somewhere........

What in any Canadian legislation prevents such a thing to happen ? Nothing! It all balances on the Transport Ministers' discretion as to what "Public Interest" stands for.
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by ea306 »

Jean-Luc:
I am not standing in anyone's way. Just simply stating that this is the way things are.
You have to look in all directions to get a sense of things.

Gillies:
80NGs WetLeased is quite an extrapolation to illustrate your point. Do you think the government would see that as being in the best interests of Canadians? I would hope not...but who knows?

Don't get me wrong. I would think it is fair to say that we all want to protect our jobs and see our companies operate profitably. This is the common goal for all I would hope.

Abusive use of WetLeases is not in any pilots' best interest. Thus the concerns that have been brought forward to the CTA by the CAW. Question is where will it all go? Certainly a situation as you described is something that no one wants to see. Having it go unchecked without limits as Gillies describes is bad news for everyone.

Stopping WetLeases altogether will not serve in our best interests. It will affect Canadian Pilot employment if this idea became policy of the CTA and was equally adopted by the EU, effectively shutting out Canadian companies from operating WetLeases in Europe.

That is my point.
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excv580mech
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by excv580mech »

To name two companies (Nationair in the past, and Air Transat in the present), Canadian companies also reap huge rewards from flying passengers for the Hajj. This is big money coming from other countries wet leases directly into the Canadian economy, providing us with jobs during a slow season, when perhaps there could be layoffs, paycuts (or both), as these type of wet leases help our companies bottom line, and keep our jobs going strong.

I suspect that an Indonesian (or other country flying people to the Hajj) aviation forum might have the same type of posts as ours here does, when we see other companies doing "our" flying.

Personally, as long as it doesn't cause anyone to be laid off or take paycuts, what is good for my employer is also good for me.
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Gilles Hudicourt
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by Gilles Hudicourt »

ea306 wrote:Gillies:
80NGs WetLeased is quite an extrapolation to illustrate your point. Do you think the government would see that as being in the best interests of Canadians? I would hope not...but who knows?

Don't get me wrong. I would think it is fair to say that we all want to protect our jobs and see our companies operate profitably. This is the common goal for all I would hope.

Abusive use of WetLeases is not in any pilots' best interest. Thus the concerns that have been brought forward to the CTA by the CAW. Question is where will it all go? Certainly a situation as you described is something that no one wants to see. Having it go unchecked without limits as Gillies describes is bad news for everyone.

Stopping WetLeases altogether will not serve in our best interests. It will affect Canadian Pilot employment if this idea became policy of the CTA and was equally adopted by the EU, effectively shutting out Canadian companies from operating WetLeases in Europe.

That is my point.
I do not call for Wet Leases to be stopped. I just think there should be proper guidelines as to what is acceptable and under which circumstances, and what is clearly unacceptable and abusive. Right now there are no laws or guidelines preventing Canadian Airlines using Wet Leases as they do now to go to the next step and implement the nightmarish scenario I described in the previous post. It all relies on the opinion of the CTA members.
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ea306
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Re: A new trend: Canadian Airlines Wet-Leasing foreign aircr

Post by ea306 »

Agreed.
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