Air Canada to shift 15 E-175 planes to Sky Regional Airlines

[Chris]

Vanessa Lu
Business Reporter
Toronto Star

As Air Canada focuses on launching a new discount carrier, it is also moving more of its short-haul flying to a regional carrier, Sky Regional Airlines.

The airline announced Monday that it would transfer 15 of its Embraer 175 planes from its fleet next year, and Sky Regional would then operate flights, under the Air Canada Express banner, mainly from Toronto and Montreal to cities in the U.S. Northeast.

Mainline carriers often reach agreements with smaller carriers to handle their short-haul flying because labour and other costs are lower. They usually operate under a capacity purchase agreement.

Sky Regional has been operating Air Canada’s route from Toronto’s island airport to Montreal on Q400 Bombardier turboprops since 2011. The transfer of the 15 regional jets is expected to be made between February and June 2013.

The move comes after an arbitrated settlement with Air Canada’s pilots permitting the airline to shift more flying to regional carriers.

At the time in July, the Air Canada Pilots Association issued a statement that warned: “Customers will be surprised and disappointed to learn that in future, buying a ticket from Air Canada will not guarantee them a seat on an Air Canada flight operated by an Air Canada pilot.”

Canaccord Genuity analyst David Tyerman said even though Air Canada doesn’t disclose the costs of shifting flights to a regional carrier, he assumes it would be cheaper.

“It is a good idea because it reduces the cost structure of the company and that will make them more profitable,” Tyerman said.

Air Canada has had a longstanding relationship with Chorus Aviation, which operates the Jazz franchise. Air Canada purchases substantially all of Jazz’s seat capacity based on predetermined rates. It then operates flights on behalf of Air Canada as a contract carrier under the brand name Air Canada Express.

However, the two companies have been locked in a dispute over whether an adjustment needs to be made over past payments. The two sides agreed to binding arbitration, and a decision is expected at any time.

Also Monday, Air Canada announced plans to add two new Boeing 777-300ER aircraft to its fleet next year as part a move to grow its international business.

Tyerman said the new planes will add some extra capacity for international flying, but “it isn’t a huge amount.”

Air Canada’s chief executive Calin Rovinescu said the carrier will continue to grow internationally with new routes, while the low-cost carrier will focus on markets where the airline is not cost-competitive.

“The arrival of these new Boeing 777s, along with the 787 Dreamliners in 2014, will allow us to introduce new routes at the mainline carrier and release aircraft from our existing fleet to our new low-cost leisure carrier,” Rovinescu said in a news release.

The airline has hired a new chief operating officer Klaus Goersch, a former executive with AirTran Airways, which has merged with discount carrier Southwest Airlines.

Air Canada’s class B shares closed up 4 cents at $1.31 in Toronto on Monday.

[Liquid Charlie]

It's wonderful to see Canada's flag carrier - shortly followed by WS working to keeping wage parity with the fee for departure carriers south of the border --

[CanadianEh]

It's wonderful to see Canada's flag carrier - shortly followed by WS working to keeping wage parity with the fee for departure carriers south of the border --

LOL.

All jokes aside, this is a classic example of the cycle that has been happening in the U.S... Shift the operation so that everyone is now starting at year 1 wages. By the time these guys end up at year 10 wages, there will already be a plan in place to start some other subsidiary and move all the planes again with a new labour force. Management is using the seniority system to their advantage.

[North Shore]

...Capitalism, gotta love it.
But, hey, all of those occupiers were a bunch of smelly hippie nutbars...viewtopic.php?f=49&t=77108&hilit=Occupy+protests

[co-joe]

...
The move comes after an arbitrated settlement with Air Canada’s pilots permitting the airline to shift more flying to regional carriers.

...

Was the minister of forced labour Lisa Raitt involved in this "arbitrated settlement"?

[flyincanuck]

Who turned a blind eye and allowed -- endorsed -- Sky Regional to operate in the first place?

Who allows foreign pilots to operate a disproportionate number of Canadian tails despite a plethora of fully qualified home-bread drivers, on-deck?

Who accepts to sit in the seats which are sub-par in the renumeration department?

Cash bonds?

Maybe instead of blaming the 1%, we should be taking a look in the mirror.

Herding pilots, is like herding cats.

If we really want to make a change, one item comes to mind.

The parking brake.

[Flying Nutcracker]

In case some pilot don't get the comparison...

http://en.wikipedia.org/wiki/Herding_cats

[Panama Jack]

All jokes aside, this is a classic example of the cycle that has been happening in the U.S... Shift the operation so that everyone is now starting at year 1 wages. By the time these guys end up at year 10 wages, there will already be a plan in place to start some other subsidiary and move all the planes again with a new labour force. Management is using the seniority system to their advantage.

You are absolutely right on this-- I have a pilot friend who just flew his last flight at Comair Airlines. Upon setting the parking brake and shutting down the engines, he knew he was unemployed. Comair Airlines was strategically shut-down by Delta Airlines, not because it was a failure, but because its costs started getting too high (it started showing legacy characteristics). I wouldn't be surprised if we see a cycle of this in the industry, including at LCC's, as costs get too high for them to be able to compete effectively against much leaner competition. A strong business case could probably be made for the Air Canada mainline itself.

And who do we have to blame for this, other than ourselves, our own Pilot Seniority systems and sense of (or lack of unity)? You cannot blame shrewd business executives to exploit the weaknesses in the way we are structured-- that is part of their job-- they try to maximize strengths, identify opportunities, and minimize weaknesses whenever they can to keep the company puffing along. As stakeholders, we want them to behave this way so that the company will survive.

The problem, as I see it, is that with our current seniority systems we are trapped in individual silos and have pay structures that are based on the seniority in those silos. While that has pretty much ruled out any kind of pilot unity between other companies as far as pay scales, it also has been damaging within the companies and, creates the economics that make older companies with many "senior" personnel uncompetitive and attractive for shut down. In other industries, seniority essentially means "first hired, last fired" although in some unions such as the FNL it has virtually no meaning; if you are not good enough to make the team then it doesn't matter when you were hired. Seniority is also a political concept which protects against management favouritism.

But in the airline pilot's world, seniority is often associated with a form of economic supremacy not known anywhere else. It brings with it overwhelming advantages in pay, vacation, work conditions and everything else. While we think this is good for us, it also has married us to our employers because the states are so high for changing employers (the idea of an Air Canada Captain switching to WestJet is unthinkable under the current seniority system). Note that I am discussing the phenomenon of seniority linked to pay and benefits, which is an airline concept rather than longevity, which is an economic concept where pay is tied to experience (an experienced lawyer with a good track record will often command higher remuneration than a new attorney).

So what would be the solutions to this problem? Well, it would required a breakdown of the silo mentality that I have mentioned and, I'm afraid, for a revolutionary change to occur with the way the profession approaches the concept of remuneration and seniority. I say "I'm afraid" because I realize that is is highly unlikely-- having watched CALPA fracture after Air Canada's pilots decided to go their own way. If anything we now have more silo thinking in the industry than ever and for us, as pilots, it isn't going to help.

So expect savvy airline executives to exploit this weakness (they are only doing their job) and let’s watch how more airlines get recycled.

[Confliction]

I agree, well said.

[crooked timber]

if there is any doubt as to what is going to happen in canada...

[ogopogo]

Why at the 6:30 mark is Borman standing in front of a Canadian flag (??)

[Rogerdodger2]

The only way we can get everyone's attention, companies and the public, is to set the parking break. As mentioned above. If every pilot in this country refused to work at the same time for just one day it would be front page news all over the world. "Canada's Skies Closed by Disgruntled Pilots"

[Mig29]

Who turned a blind eye and allowed -- endorsed -- Sky Regional to operate in the first place?

Who allows foreign pilots to operate a disproportionate number of Canadian tails despite a plethora of fully qualified home-bread drivers, on-deck?

Who accepts to sit in the seats which are sub-par in the renumeration department?

Cash bonds?

Maybe instead of blaming the 1%, we should be taking a look in the mirror.

Herding pilots, is like herding cats.

If we really want to make a change, one item comes to mind.

The parking brake.

Can't agree more with you on this....

[RFN]

http://www.collegeofpilots.ca/

Just joined today.

[URC]

The parking brake.

They tried that in Australia in 1989. Didn't work out so well.

The Dispute, which has never been resolved, has resulted in nearly 80 % of the pilots involved not returning to their former positions

http://www.vision.net.au/~apaterson/avi ... cument.htm

[Colonel Sanders]

PATCO tried that in 1981, but I guess no one
here was alive back then.

Every single one of them was fired, and they
never worked in the industry again.

The thing you have to keep in mind is that
Canadian airline pilots don't have a clue what PR is.

In the recent past, they consistently get out-stickhandled
in the media by the company management, who
portray them as greedy, lazy, overpaid, etc.

Airlines pilots pride themselves on a lack of
communication to the public.

Given this context, a walkout would be disastrous.

[Chuck Ellsworth]

Airline pilots have several problems that limit their ability to push their demands on their employers.

The biggest drawback is the nature of the work they do, they have become insular from their clients the traveling public.

Joe public only see them briefly in terminal buildings dragging their wheelies behind them either going to the airplane or leaving the terminal building after leaving the locked cage they have been in since they first got in the airplane.

With that kind of interaction with the people whom they actually work for it is very difficult for pilots to evoke sympathy from the public in wage disputes.

The next problem they face is should they get turfed like Regan turfed the air traffic controllers how many of them could find work outside of flying for an airline that would pay them anywhere near what they are already making?

[Localizer]

Its hard to change public opinion when some douche bag puts a full page article in the Globe and Mail, crying about retiring at 60 and how tough it will be on that crappy $120,000/yr pension.

[Mig29]

Its hard to change public opinion when some douche bag puts a full page article in the Globe and Mail, crying about retiring at 60 and how tough it will be on that crappy $120,000/yr pension.

Yesssss....and probably the same guy will apply to Sky to fly left seat E175 since he didn't end up taking that Turkish Airlines 777 left seat.....just saying

"What a wonderful world" as Louis Armstrong sang...

[ERJ -The Spark]

[quote="Localizer"]Its hard to change public opinion when some douche bag puts a full page article in the Globe and Mail, crying about retiring at 60 and how tough it will be on that crappy $120,000/yr pension.

***************************************************************************************************

That's why Air Canada is in a real Financial Problem right now... Try to satisfy some Baby pilots and some dog ducking ground mtx crew with PLATINUM Benefits... Try to make a profit... Try to compete With a 5***** Star Westjet with motivated employes and great Track record...

I Don't want an Air Canada Management JOB !!!!

Do You want there job ???? ...

Not in HR either!!!!
Spark

[Liquid Charlie]

5***** Star Westjet

from what I hear they are no better with their new proposed venture -----

Its hard to change public opinion when some douche bag puts a full page article in the Globe and Mail, crying about retiring at 60 and how tough it will be on that crappy $120,000/yr pension.

Save that and re-read when you turn 60 -- I'm sure you will realize it ain't about the money by then ----

[Localizer]

Liquid Charlie .. Providing all goes well and the current FP60 generation doesn't screw it up any further and force me by law to work beyond 60 .. I will be enjoying the fruits of my labour .. if I still have the itch to fly an airplane then I will volunteer my time with air cadets and tow their gliders .. I will volunteer my time with young eagles .. or i'll just rent a plane and take my wife for an evening ride.

I know this sounds crazy .. but .. I'm going to enjoy life and retirement, so no need to reflect on that article down the road.

[Liquid Charlie]

I know this sounds crazy .. but .. I'm going to enjoy life and retirement

- guess that means you aviation is a career for you and not a passion.

To each his own -- I'm enjoying my retirement by working -- best time I have had since my first job -- better than renting - costs me nothing - keeps my brain sharp - so in reality if you are having fun it's more like a holiday -- I go home to work on my time off -- -- oh ya -- I get to mentor some young pilots which hopefully will help them to enjoy aviation as much as I did -- it all works out in the end time wise -- if some 30 year old is pissed cuz he feels I have taken his position -- well -- I'm laffin - he should just grow up and pay attention -- we can all learn from each other -- most 65 plus pilots end up working for smaller carriers anyway

-- as for level 1 -- 65 seems to be the world wide standard -- when the realization that "fat" pensions are a thing of the past as management erodes and chips away at contracts - 65 will be a necessity especially now that salaries are being attacked on all fronts and most will be working in this industry with no possibility of achieving "A" scale

Just because someone is over sixty, black, blue or non-christian does not give anyone the right to take cheap shots or discriminate against.

[Mig29]

Liquid Charlie .. Providing all goes well and the current FP60 generation doesn't screw it up any further and force me by law to work beyond 60 .. I will be enjoying the fruits of my labour .. if I still have the itch to fly an airplane then I will volunteer my time with air cadets and tow their gliders .. I will volunteer my time with young eagles .. or i'll just rent a plane and take my wife for an evening ride.

I know this sounds crazy .. but .. I'm going to enjoy life and retirement, so no need to reflect on that article down the road.

That doesn't sound crazy at all Loc

It's actually the opposite that scares me!!!

[20DMEYYZ]

i'm just curious since i didn't see it specified whether the current 175bigred crews' will shift in some way to the 190 or will they remain on the 175 for the "express" flights and still maintain their AC "perk's" ?