Air Canada buying Jazz?
Moderators: sky's the limit, sepia, Sulako, lilfssister, North Shore, I WAS Birddog
Re: Air Canada buying Jazz?
Pretty vague. That could mean anything I guess. Strategies to bankrupt Jazz? Strategies to work with Jazz? Interesting though that he took the time even in this short interview to single out Jazz, for better or for worse. Time will tell
Re: Air Canada buying Jazz?
For better? I don't think so.teacher wrote:Pretty vague. That could mean anything I guess. Strategies to bankrupt Jazz? Strategies to work with Jazz? Interesting though that he took the time even in this short interview to single out Jazz, for better or for worse. Time will tell
Think AVEOS. Not the bankrupt version but rather the version that AC wanted - cheaper and smaller.
Re: Air Canada buying Jazz?
That's probably right Rudder. And they will achieve both thru bigger aircraft.
Re: Air Canada buying Jazz?
Not so vague. Keep listening past where Jazz is mentioned.teacher wrote:Pretty vague. That could mean anything I guess. Strategies to bankrupt Jazz? Strategies to work with Jazz? Interesting though that he took the time even in this short interview to single out Jazz, for better or for worse. Time will tell
"We have a lot of drivers here for innovation and to reduce the cost structure ultimately"
Cost reduction drivers mentioned. Rouge, 175's to SR. High density 777.
Tacked on the end of drivers to reduce costs "different strategies with respect to our partnership with Jazz"
Re: Air Canada buying Jazz?
Certainly larger aircraft will drop CASM.biatch wrote:That's probably right Rudder. And they will achieve both thru bigger aircraft.
But Chorus is paid by the block hour and has a minimum block hour guarantee. It doesn't matter if you fly 172's or 747's. The block hour guarantee is the same.
The only way to make Jazz smaller is with less block hours. Correct?
Re: Air Canada buying Jazz?
I think what he was saying is, that if Jazz flew bigger airplanes they would fly less total block hours(reduced frequency) and thus reduce Jazz's total cost to the mother ship.Fanblade wrote:The only way to make Jazz smaller is with less block hours. Correct?
Re: Air Canada buying Jazz?
AC will be looking to shift the 37/50 dash flying to a company like GGN, for example and there are two ways in which to do that.
One, get jazz to agree to it or two be in control of Jazz, either way in the corps eyes we are way to expensive to be flying 37/50 seats around.
The RJ 200s will be gone also but they have that ability already in the FOS
One, get jazz to agree to it or two be in control of Jazz, either way in the corps eyes we are way to expensive to be flying 37/50 seats around.
The RJ 200s will be gone also but they have that ability already in the FOS
Re: Air Canada buying Jazz?
As part of the CTP initiative, I would guess that conservatively CR is looking for at least a 10-15% reduction in CHR CPA expense. This comes on peak annual CHR cost in the vicinity of $1.55B.Fanblade wrote: Not so vague. Keep listening past where Jazz is mentioned.
"We have a lot of drivers here for innovation and to reduce the cost structure ultimately"
Cost reduction drivers mentioned. Rouge, 175's to SR. High density 777.
Tacked on the end of drivers to reduce costs "different strategies with respect to our partnership with Jazz"
Commercial schedule reductions of the annual block hours to the CPA guaranteed minimum probably will reduce CHR CPA annual expense by 6-7%. That means there is still a 4-8% CHR CPA cost reduction that CR wants. The benchmarking arbitration would get him part of the way if successful but not all the way. My guess is that his objective is a permanent CPA margin in the range of 5-8% on controllable costs (which would take CHR down to approximately $45-70M in annual pre-tax profit down from a high of $150M+).
CR has a track record of getting what he wants. So I suspect this will be the case with CHR either one way or the other. People should know by now that CR always formulates several routes to his intended destination.
Re: Air Canada buying Jazz?
Latest numbers indicate that block hours have decreased by 3.9%. Company value seems to be dropping as well.
Tough times ahead? Will Jazz find itself going bankrupt? It would be unfortunate, but anything is possible.
Tough times ahead? Will Jazz find itself going bankrupt? It would be unfortunate, but anything is possible.
Re: Air Canada buying Jazz?
The only scenario that would see CHR file for CCAA is if AC files for CCAA.Impact wrote:Latest numbers indicate that block hours have decreased by 3.9%. Company value seems to be dropping as well.
Tough times ahead? Will Jazz find itself going bankrupt? It would be unfortunate, but anything is possible.
Re: Air Canada buying Jazz?
I guess the Equipment bid due at the end of month will reflect that trend...Might not be a whole lot of hiring unless Jazz is loosing many FOs...
Re: Air Canada buying Jazz?
Capacity for AC as measured by ASM's seems steady based on info available in the quarterly financials. However, airframes and block hours are decreasing. Expect that trend to continue.JLA wrote:I guess the Equipment bid due at the end of month will reflect that trend...Might not be a whole lot of hiring unless Jazz is loosing many FOs...
So long as the industry is expanding there will be attrition.
Re: Air Canada buying Jazz?
Wouldn't make any economic sense for AC to purchase CHR. It's far more profitable to force them to lower their rates or loose more flying to Skyservice. AC is holding all the cards. CHR is vunerable with their old air frames and their costly union contracts.
Brankruptcy would only become an option (IMHO) if there were ever to be an extended pilot strike.
Brankruptcy would only become an option (IMHO) if there were ever to be an extended pilot strike.