Air Canada buying Jazz?

Discuss topics relating to Jazz Aviation LP.

Moderators: sky's the limit, sepia, Sulako, lilfssister, North Shore, I WAS Birddog

teacher
Rank 10
Rank 10
Posts: 2450
Joined: Thu Feb 19, 2004 3:25 pm

Re: Air Canada buying Jazz?

Post by teacher »

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 :smt102
---------- ADS -----------
 
rudder
Rank 11
Rank 11
Posts: 3848
Joined: Wed Mar 08, 2006 12:10 pm

Re: Air Canada buying Jazz?

Post by rudder »

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 :smt102
For better? I don't think so.

Think AVEOS. Not the bankrupt version but rather the version that AC wanted - cheaper and smaller.
---------- ADS -----------
 
biatch
Rank 2
Rank 2
Posts: 70
Joined: Thu Apr 05, 2012 11:43 am

Re: Air Canada buying Jazz?

Post by biatch »

That's probably right Rudder. And they will achieve both thru bigger aircraft.
---------- ADS -----------
 
Fanblade
Rank (9)
Rank (9)
Posts: 1693
Joined: Mon Mar 28, 2011 8:50 pm

Re: Air Canada buying Jazz?

Post by Fanblade »

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 :smt102
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"
---------- ADS -----------
 
Fanblade
Rank (9)
Rank (9)
Posts: 1693
Joined: Mon Mar 28, 2011 8:50 pm

Re: Air Canada buying Jazz?

Post by Fanblade »

biatch wrote:That's probably right Rudder. And they will achieve both thru bigger aircraft.
Certainly larger aircraft will drop CASM.

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?
---------- ADS -----------
 
truedude
Rank 7
Rank 7
Posts: 734
Joined: Tue Apr 27, 2004 3:30 pm

Re: Air Canada buying Jazz?

Post by truedude »

Fanblade wrote:The only way to make Jazz smaller is with less block hours. Correct?
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.
---------- ADS -----------
 
User avatar
anonymity
Rank 3
Rank 3
Posts: 165
Joined: Thu May 03, 2007 10:49 am
Location: Home

Re: Air Canada buying Jazz?

Post by anonymity »

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
---------- ADS -----------
 
rudder
Rank 11
Rank 11
Posts: 3848
Joined: Wed Mar 08, 2006 12:10 pm

Re: Air Canada buying Jazz?

Post by rudder »

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"
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.

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.
---------- ADS -----------
 
qwert
Rank 3
Rank 3
Posts: 143
Joined: Tue Sep 27, 2005 3:29 pm

Re: Air Canada buying Jazz?

Post by qwert »

EDITED - Unacceptable
---------- ADS -----------
 
Impact
Rank 3
Rank 3
Posts: 183
Joined: Thu Jan 03, 2013 8:28 am

Re: Air Canada buying Jazz?

Post by Impact »

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.
---------- ADS -----------
 
rudder
Rank 11
Rank 11
Posts: 3848
Joined: Wed Mar 08, 2006 12:10 pm

Re: Air Canada buying Jazz?

Post by rudder »

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.
The only scenario that would see CHR file for CCAA is if AC files for CCAA.
---------- ADS -----------
 
JLA
Rank 2
Rank 2
Posts: 77
Joined: Sat Mar 23, 2013 1:53 pm

Re: Air Canada buying Jazz?

Post by JLA »

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...
---------- ADS -----------
 
rudder
Rank 11
Rank 11
Posts: 3848
Joined: Wed Mar 08, 2006 12:10 pm

Re: Air Canada buying Jazz?

Post by rudder »

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...
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.

So long as the industry is expanding there will be attrition.
---------- ADS -----------
 
tsgas
Rank 7
Rank 7
Posts: 598
Joined: Sun Feb 29, 2004 12:53 pm

Re: Air Canada buying Jazz?

Post by tsgas »

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.
---------- ADS -----------
 
Post Reply

Return to “Jazz Aviation LP - Air Canada Express”