CanJet Ready To Go It Alone

[OceanGal]

Two articles regarding direction for CanJet:

Financial Post: Transportation


CanJet takes first step to resuming airline operations
Republish Reprint
Reprints
Republish Online
Republish Offline
Scott Deveau | 13/03/15 6:38 PM ET
More from Scott Deveau | @scottdeveau



CanJet Airlines appears to be once again laying the groundwork for a scheduled service, this time between Canada and Europe and to several sun destinations.

The Halifax-based charter airline’s parent company, I.M.P. Group Ltd., was granted several large aircraft licenses this week that would allow CanJet to provide scheduled service between Canada and the 27 European member states, Antigua and Barbuda, Costa Rica, and Barbados.

I.M.P. Group did not return calls Friday for comment. But CanJet’s management has met with the leadership of at least one of its unions in recent weeks and said there are some plans in the works.

CanJet currently operates a charter airline business primarily by subcontracting its fleet of Boeing 737 aircraft to Transat A.T. and providing pilots and crew for its flights under their so-called ‘wet lease’ arrangement.

Transat is in the midst of determining whether to extend its partnership with CanJet or whether it will purchase its own fleet of 737s.

A decision from Transat is expected within weeks, and that has raised questions about what will happen if Transat opts not to extend their partnership when their current five-year agreement expires on April 30, 2014.

Chantal Laflamme, spokeswoman for the Canadian Transportation Agency, said under its new scheduled international licenses, CanJet services would be offered under its own name. Although CanJet could apply to wet lease its planes or enter into a code-share agreement with another airline to fly on their behalf.

It hasn’t applied for either for its new licenses at this point, she said.

Chantal Bourgeois, national representative for CUPE local 4044, which represents roughly 450 CanJet flight attendants, said she met with management, including president Stephen Rowe, last month.

She said Mr. Rowe said he was in the midst of working on a plan for CanJet’s future, but said he wouldn’t be able to discuss it in more detail until at the end of March.

“He was reassuring about the future, but he wasn’t able to give us any detail,” Ms. Bourgeois said. “We will see at the end of the month.”

The Air Line Pilots Association, which represents CanJet’s pilots and which is in the midst of contract talks with the airline, was unaware of any application for scheduled service.

“The company has not discussed or disclosed such possiblities,” the union said in an email, adding the first it heard of it was through an Internet search.

CanJet operated as a schedule discount airline in Canada and the U.S. before abandoning that business in 2006 in the face of intense competition and rising fuel prices to focus on its charter operations.


and,

From All Nova Scotia.com - 15 march, 2013

CANJET READY TO GO IT ALONE
Caroline Wood

CanJet is prepared to relaunch scheduled service under its own brand if contract negotiations with main charter customer Air Transat go south.

The IMP division heard Thursday that applications to fly scheduled service to Antigua, Costa Rica, Barbados, St Lucia and Europe were approved by the Canadian Transportation Agency.

The Ken Rowe-owned airline already holds licences to fly to Cuba and Jamaica.

"CanJet's first preference is to conclude a renewal of their present contract. Failing this, CanJet has the time to explore the many other flying opportunities," said CEO Stephen Rowe, making reference to the Transat contract which ends in May 2014.

The new licences put CanJet in a very srong position to renegotiate a five-year agreement in the highly competitive holiday business.

Transat AT Inc. charters CanJet's fleet, which numbers as many as 13 Boeing 737-800s.

Air Transat is in a tough spot. The vacation firm has promised hundred's of flight attendants to look into running its own fleet of Boeing 737s in exchange for big concessions.

Transat's co-founder, Jean-Marc Eustache, told analysts Thursday that retiring some of its own wide -body Airbuses in favour of adding narrow-body planes is key to increasing wintertime flexibility, something that will return the company to profitability.

"The company will look very different in June (2014)," he said.

Ken Rowe is 75, and it has always been his dream to own a scheduled airline.

CanJet began as a scheduled carrier in the early 2000s. the Rowes decided to scale back to a charter airline for financial reasons just a few years later.

The stage could be set for another try.

CanJet has a very strong brand, particularly with sunseekers.

Even while operating almost exclusively for Transat, CanJet planes have flown under their own livery with CanJet crews.

The company has a competitive advantage with a low cost fleet and a ready staff.

Ken Rowe has deep pockets and he and his offspring a strong desire to expand in the Aerospace sector.

[hogster330]

Hopefully, canjet has done us at Transat a Big Favour!!!!

[ea306]

Hopefully, canjet has done us at Transat a Big Favour!!!!

Is this good or not so good for AirTransat?
Sincere question... Thoughts: Why may it be good? Why might it be bad?

[hogster330]

My post is in response to the comments in the article that suggests that Canjet's apllications have put in a "strong negotiating position" and that Transat is in a "tough" position. Sometimes those kind of corporate manoeuvres backfire. Hopefully, for the hundreds of employees of Air Transat that will be laid off without the introduction of a Narrowbody Fleet,this manoeuvre will ruffle some feathers at head office and help them choose to bring the 737 flying inhouse

[ea306]

Oh I see... Yeah I can see your point.

[Bigboi]

Hogster330.... Other than strengthening the resolve of those at AT who wish to do the narrow body flying, I fail to see how this could possibly be good for the Transat Group as a whole? Additional capacity and competition on the Southern and Trans Atl flying is probably the last thing Transat wants at this point. Whether big or miniscule, I am sure that it would somehow negatively impact their strategy to begin operating back in the black past the 2013/2014 winter season.

Keep in mind that although Transat has been operating in the red for a while; Sunwing and WestJet Vacations have been very successful for the past few years including this past quarter. They are both seeing growth and grabbing more market share. AC Rouge will also be entering both markets and likely in direct competition on the Trans Atl routes.

CJ could enter as a LCC in both markets and looking for a slice of the same pie. They already have access to wide and narrow body aircraft, flight crews and lets not forget the most important thing; finances.

Just my 2 cents...

[Zip Tie]

Never under estimate Ken Rowe.He tends to always come out on top in business.Deep pockets,well connected and rules with an iron fist.Watch and see.

[rudder]

Never under estimate Ken Rowe.He tends to always come out on top in business.Deep pockets,well connected and rules with an iron fist.Watch and see.

You are kidding, right?

IMP Group may have a solid track record, but KR's track record running airlines is nothing to brag about. Not sure that his kids are faring any better. Whatever inventory that CJ is contemplating adding to the market, when added to Rouge, and Sunwing, and WJ vacations, and Transat in-house narrowbody operations will simply drive yields in to the toilet. Nobody's revenue projections will be worth the paper that they are printed on.

But don't let that stop KR from sabre rattling. The only question here is how much money is he prepared to lose? My guess is 'zero' or certainly not more than he is losing right now on the Transat contract. The only salvation is to try to get Groupe Transat to accept a revised bid that is likely on the same economic terms as year 1. It would mean that CJ would continue to lose money but IMP Group would make up revenue through the maintenance and other service agreements with CJ. Not sure that Groupe Transat is interested anymore for reasons covered previously.

[Zip Tie]

All I can say is that no mater what happens he will either make money or not loose money and in the process he will make
Transat exec look like amateurs.Its not about him wanting to run an airline.Thats just put out by IMP for the media.I am sure of that.He employs some of the tactics that Onex has used in the past.

Never under estimate Ken Rowe.He tends to always come out on top in business.Deep pockets,well connected and rules with an iron fist.Watch and see.

You are kidding, right?

IMP Group may have a solid track record, but KR's track record running airlines is nothing to brag about. Not sure that his kids are faring any better. Whatever inventory that CJ is contemplating adding to the market, when added to Rouge, and Sunwing, and WJ vacations, and Transat in-house narrowbody operations will simply drive yields in to the toilet. Nobody's revenue projections will be worth the paper that they are printed on.

But don't let that stop KR from sabre rattling. The only question here is how much money is he prepared to lose? My guess is 'zero' or certainly not more than he is losing right now on the Transat contract. The only salvation is to try to get Groupe Transat to accept a revised bid that is likely on the same economic terms as year 1. It would mean that CJ would continue to lose money but IMP Group would make up revenue through the maintenance and other service agreements with CJ. Not sure that Groupe Transat is interested anymore for reasons covered previously.

[OceanGal]

A lot of airlines have come and gone in the last 13 years. C3, Royal, Jetsgo, Harmony, Zoom, Skyservice, et al....yet the CanJet brand has endured. Surely that must speak to the commitment IMP has to develop and sustain an airline model that is viable. Their tenacity speaks to that where the other airlines just went away.

Group Transat has been an excellent customer for CanJet. The relationship has been been positive and professional. I have no doubt that IMP prefers to maintain its relationship with Transat however, it would appear Group Transat is driving the issue where there is still no agreement, so what would you have IMP do one year out? Questions are being asked by industry and employees: "what if...", so IMP has answered that question:......that if there is no agreement with Group Transat then CanJet will remain in the market. The folks running CanJet have decades of background and a ready made airline business. The industry in Canada is in the process of re-engineering itself. It's adapt or die. IMP will only re-engineer the model once again if they can develop a business case that is sustainable. If they are planning to go it alone then the business case must support that. Don't kid yourselves, IMP is in the business to make money not lose money. Regarding the industry in Canada, its all fair business......it's a competitive market and CanJet will have to succeed on its own merits ultimately, however, Canjet may be equally positioned to compete with the others based on cost.

I have been part of this organization since the days of Air Atlantic. its been a good life with its share of ups and downs and I am glad that I hung in. So, like I said, IMP has demonstrated they have staying power over the years.

So I say, hats off to Ken Rowe and IMP. You have got to hand it to them, they do like owning airlines.

[2R]

It would be easy to make money with those aircraft.
EASY.

[teacher]

What's their option? Fold up shop and walk away? Lay off everyone? Same question hs been asked of us at Jazz if AC walks from the CPA. Lay off thousands of people or take them on ourselves. You better believe though that if pushed to the wall people will do what it takes to survive.

[rudder]

What's their option? Fold up shop and walk away? Lay off everyone?

Well, that is what they have done in the past. Interesting that they waited until 13 months prior to the expiry of a 5 year deal to consider plan B. Applying for licences does not cost any material amount of money. Looks more like smoke and mirrors than a serious venture. Too many details missing. CJ is an ACMI operation, not a scheduled airline nor a vertically integrated tour company. My bet is that what KR is angling for is to have Groupe Transat buy CJ. Not sure what the asking price will be but I suspect that the offer won't be much north of $1. No assets - no value. People can disparage Groupe Transat all they like but it is a $3.8B enterprise and is not going to disappear or back down from threats of competition.

Pilots are already leaving so clearly some do not seem willing to rely on the business acumen or track record running airlines of KR to meet their future financial security goals.

[24Left]

I put your distain for CanJet as passing the buck. The sardonic attitude from the small group of you from Group (e) Transat is less than attractive. It makes you look petty but I suppose the mud slinging has to happen when you are uncertain of your jobs and future.

CanJet has a tried, tested and true product and we have proven we were able to get the job done while maintaining OTP, and excellent customer service. And, before you start blaming CanJet for any discord at Air Transat, do keep in mind that CanJet abides by the terms and conditions put forth to them by Air Transat. We continue to have a very respectful relationship with our client and we value the opportunity they have given us.

Rouge has publically stated it’s ready to take Transat on, and with the financial backing of Air Canada they have a head start. Westjet is firm and fine and SWG has carved a niche for itself in the market. All of them are going to be a threat and a challenge to Air Transat. Given these facts, I am surprised that you wouldn’t want more strength at the starting gate. An alliance with CanJet can only serve to strengthen Transat during such an uncertain, yet exciting time in the industry. This is a very challenging and unsteady time for Air Transat. They have been around for a very long time, but a few new kids are in town and passengers are not as akin to loyalty these days as they are to nickels and dimes.

Don’t be so sure CanJet can’t get in the race, and don’t be so sure that we won’t have the backing and support of a tour operator either. Perhaps your fears are founded, because nothing has been decided, Transat has not declared they will be bringing 737’s in house, thus far they are saying it’s being considered and they have publically announced they have brought in advisors on the issue. Have any of you asked how much money the external advisors will cost? At the end of the day those advisors are going to count the beans, and like it or not, CanJet’s pile will prove to be more beneficial, CanJet knows the do’s and don’t of operating 737’s cost effectively.

And it all comes down to jobs. Naturally you want your pilots and flight attendants that are on ‘’ indefinite’’ layoff’’ to be recalled. I understand and I sympathize. I am concerned about my own future. But, mud slinging and trying to throw anyone under the bus won’t change the temperature of what’s in store for aviation in Canada.

As a few others have said, this industry is vastly changing, and money is always the bottom line. We have to adapt to the market, and the consumer. CanJet has proven they can do that, and perhaps Transat is not the only suitor. Perhaps a dark horse is forming an alliance with CanJet. Either way, CanJet is can to use its good reputation and proven track record in low cost travel and avail it to the person who matters the most. The person who is buying the ticket!

[rudder]

CanJet has proven they can do that, and perhaps Transat is not the only suitor. Perhaps a dark horse is forming an alliance with CanJet.

Sked charter/packaged tour players of significance in Canada:

- Thomson (Sunwing)

- Thomas Cook (Sunquest/WJ)

- Transat Holidays (AT/CJ?)

- Westjet Vacations (WJ)

- Air Canada Vacations (AC/Rouge)

Dark horse? Good luck. I won't bother listing all that have tried and failed. Boutique players. No critical mass. Unable to survive a full economic cycle. And I cannot see a valid reason for any of the current big players to be looking to add to their portfolio of lift suppliers. Demand for product is not increasing but revenues are under constant pressure.

Nobody has anything against CJ or its employees. If Groupe Transat had simply announced announced a renewal on the CJ service agreement then we could all go back to the stimulating foreign pilot debate. But that did not happen (yet) and the principals have been awfully cryptic about the substance of discussions, if any, that transpired between the parties surrounding the renewal terms offered or requested.

It certainly appears that Groupe Transat would now like to go in a different direction. And all appearances are that their employees at the Air Transat subsidiary are willing to play ball in both the narrowbody initiative as well as the widebody operation. That gives Air Transat more opportunity for economic inducement in the competition to win the narrowbody work. CJ will have to wait until the customer decides what the business plan will be. Such is the nature of being a vendor of capacity.

Have the CJ pilots ever thought about having discussions with the AT pilots?

[Zip Tie]

Just a matter of time before one of the players drops out of the race again.Not enough traffic for all to stick arround.

[YHZGOOSE]

Never under estimate Ken Rowe.He tends to always come out on top in business.Deep pockets,well connected and rules with an iron fist.Watch and see.

You are kidding, right?

IMP Group may have a solid track record, but KR's track record running airlines is nothing to brag about. Not sure that his kids are faring any better. Whatever inventory that CJ is contemplating adding to the market, when added to Rouge, and Sunwing, and WJ vacations, and Transat in-house narrowbody operations will simply drive yields in to the toilet. Nobody's revenue projections will be worth the paper that they are printed on.

But don't let that stop KR from sabre rattling. The only question here is how much money is he prepared to lose? My guess is 'zero' or certainly not more than he is losing right now on the Transat contract. The only salvation is to try to get Groupe Transat to accept a revised bid that is likely on the same economic terms as year 1. It would mean that CJ would continue to lose money but IMP Group would make up revenue through the maintenance and other service agreements with CJ. Not sure that Groupe Transat is interested anymore for reasons covered previously.

Saying Groupe Transat is not interested and assuming there has been a revised bid by Canjet is a total speculation on your behalf! Rumor mongering at it's finest. You can play armchair critic on these forums as much as you want to but you don't know anything aside from what you invent and piece together. Groupe Transat isn't trolling these forums and listening to you. They will do what's best for them.

[YHZGOOSE]

Hogster330.... Other than strengthening the resolve of those at AT who wish to do the narrow body flying, I fail to see how this could possibly be good for the Transat Group as a whole? Additional capacity and competition on the Southern and Trans Atl flying is probably the last thing Transat wants at this point. Whether big or miniscule, I am sure that it would somehow negatively impact their strategy to begin operating back in the black past the 2013/2014 winter season.

Keep in mind that although Transat has been operating in the red for a while; Sunwing and WestJet Vacations have been very successful for the past few years including this past quarter. They are both seeing growth and grabbing more market share. AC Rouge will also be entering both markets and likely in direct competition on the Trans Atl routes.

CJ could enter as a LCC in both markets and looking for a slice of the same pie. They already have access to wide and narrow body aircraft, flight crews and lets not forget the most important thing; finances.

Just my 2 cents...

I'm putting my 2 cents with your 2 cents bud! It makes SENSE.

[Zip Tie]

Face it,like many airlines out there operating for years,Transat has gotten too expensive for the market enviroment.They can operate like Air Canada and loose money just to hold the market or farm out the lift.Canjet can do it much cheaper and thats what the competition demands.Thats the new reality.Ken Rowe has many options and can compete on many levels.To top that he does not have to answer to shareholders.

[Bigboi]

Putting aside all the millions of potential savings (calculated) that the AT union groups have agreed upon; what would be the start up costs for them to bring on a small fleet of 737NG?
Keep in mind that the aircraft will need to brought online with some form of reconfiguration to meet the high standards of Transat. For a small fleet of 737NGs, the interior reconfig with IFE standardization, seats/covers, galleys and etc can cost millions alone. Prior to spending that, you first have to get the aircraft, paint them, train the crews and obtain the equipment to support them. That will have highly variable costs as well. After that, you will have to gain some operational experience on type as well as a reasonable technical dispatch reliability to have an OTP that meets Transat Tours expectations.

Of course, the final decison on awarding the contract to either AT or CJ will be up to the board of directors. As a share holder of such a publicly traded company that has been operating in the red, I would feel it rather risky to put all the eggs in the AT basket that has been self confessed as operating heavy for some time. Apart from keeping a division within the groupe happy by giving the inhouse company an opportunity to bid after they show where radical savings can be made, it's hard to understand why they would not go with the tried and tested company that has successfully done it for the past 5 years. If I were on the board, I would support saving the 737NG start up costs by extending the contract and have AT follow through on the agreed savings anyways... That would put them in the black again.

The bottom line is that the board will look for what is going to put Transat in the black again. This is in everyone's interest including AT, its share holders as well as CJ.

Once again this is just my 2 cents from the outside looking in....

[confusedalot]

So then why has this situation presented itself in the first place?

Oh wait, maybe it's this..................

As they say, if you haven't heard a good rumor lately all you have to do is start one.

Maybe TTC and IMP have been actioning a secret plan all along where nothing was going to change. Maybe TTC was only trying to entice the employee groups into concessions and maybe IMP, with TTC's help, wants to scare the employee groups into concessions. Add a little bit of market saturation threats, simmer and stir, and yer done. Hey maybe even sunwing gets nervous.

At the end of the day everything stays the same, Transat and Canjet employees take a hit, operating costs go down, TTC shares go up, IMP revenues go up and everyone is happy, except the employees of course.

Or maybe we all go to Vegas and play the tables where the house always wins.

This is all in jest of course, however the twists to this saga are getting curiouser and curiouser.

[livin']

I think we can base the future based on past actions.....anyone thinking on staying with Canjet based on what is being posturised by Canjet recently....get the F*$% out...history has a tendency of repeating itself

[oldman]

I've seen a lot in my time in this industry. It's only getting more interesting. Canjetters hang on cause option "B" may be better then option "A." Going it alone, might not be as accurate as one would assume.

[AvJet]

Deal with Transat CanJet’s first priority, while it eyes flying solo
Scott Deveau | 13/03/19 | Last Updated: 13/03/19 10:09 AM ET

The president of CanJet Airlines says the first priority for his carrier is to hammer out a new long-term deal with Transat A.T. But failing that, the Halifax-based charter airline is laying the groundwork to explore other opportunities.

CanJet parent company, I.M.P. group, was granted several licences last week that would allow the airline to begin flying scheduled service between Canada and the 27 European states, Antigua and Barbuda, Costa Rica and Barbados.

CanJet currently operates a charter airline business primarily by subcontracting its fleet of 13 737s to Transat, the country’s largest travel tour operator, and providing pilots and crews for those flights through their so-called ‘wet lease.’

But CanJet’s future has been called into question with Transat saying it is currently contemplating bringing its flying back in-house with the potential purchase of its own 737s as part of its ongoing cost cutting measures.

A decision is expected within weeks, Transat’s management has said.

Stephen Rowe, CanJet president, said the scheduled service licences are part of his fallback plan should his carrier’s five-year deal with Transat not be extended when it expires April 30, 2014.

“Canjet airlines is in the final stages of negotiations with Transat Tour Canada for a contract extension beyond May of 2014,” Mr. Rowe said in an email.

“Canjet’s first preference is to conclude a renewal of our present contract with Transat. Failing this, Canjet is exploring the many flying opportunities that are available to us today,” he added.

He said he had no comment when asked to elaborate on those plans, however.

CanJet operated as a schedule discount airline in Canada and the U.S. before abandoning that business in 2006 in the face of intense competition and rising fuel prices. It decided at that point to focus on its charter operations.

But if CanJet does re-enter the market as a scheduled airline it will likely find some fierce competition there once again.

Not only has the market down south proven hyper-competitive in recent years as Sunwing Airlines, WestJet Vacations, and Transat continue to fight for market share, but Air Canada also intends to launch its new low-cost carrier, Rouge, this summer to Europe and down south in the winter months as well.

[CanadaEH]

A Canjet/Sunwing merger would be interesting - I'll throw that one out there.