AC*/TS/PD/WS | Canada-Based Carriers

[hkskyline]

Air Canada’s reset: Advice to help the airline straighten up and fly right
Published On Fri Apr 20 2012
Toronto Star

Get back to bargaining. Admit being off course. Be more paranoid.

As Air Canada moves to restart negotiations with its pilots in hopes of salvaging the worsening relationship, management experts call it a good first step for an airline troubled by everything from toxic labour relations to steep fuel prices to nimble competition.

Anil Verma, a labour relations professor at the University of Toronto’s Rotman School of Management, said returning to the bargaining is a smart decision, but it can’t be typical talks.

“They have to go back with a proposal to substantially reformulate the relationship. They have to break from the past,” Verma said, adding it would very difficult for a company to admit the course they were on was “disastrous” but that’s what good leadership must do.

He added when the company asks its unions for help to restructure, it should put in writing a commitment to a return to certain benefits and wages when specific financial conditions are reached.

“It requires a complete turnaround in attitude towards the other side,” Verma said.

Air Canada has been plagued with labour turmoil for the past year that resulted in a brief three-day strike by customer-service agents last June.

Later when the flight attendants threatened to walk off the job, Labour Minister Lisa Raitt blocked the move, and the dispute was settled by arbitration.

Similarly, on the eve of March break, Raitt also intervened when it looked like the 8,600 baggage handlers and machinists were set to strike as the company was planning to lock out its 3,000 pilots.

The federal government later passed back-to-work legislation, blocking any job action and ordering the disputes be settled through arbitration.

That move angered employees, and prompted a wildcat strike by baggage handlers on March 23 and a pilot sickout on April 13.

With the busier travel periods of spring and summer approaching, the airline wants to end any uncertainty that can hurt bookings.

Add on financial challenges of rising fuel prices, a higher Canadian dollar and a weak economy, some analysts have wondered whether the airline is headed back into bankruptcy court.

York University business professor Fred Lazar said Air Canada needs senior management to approach all its unions and outline the options of continued fighting and ending up in bankruptcy court.

“The other path is to sit down and work together,” said Lazar.

In that scenario, Air Canada would spell out plans including a new discount carrier, which some pilots worry means a path to lower pay and different work rules.

As a sign of goodwill, managers should offer to cut their salaries significantly for two or three years, as well as corporate overhead costs, he said.

If Lazar was advising unions, he would recommend getting government onside with a pension expert to work out a pension deal.

And he said unions should ask for an ownership stake, say 10 or 15 per cent to be put in trust, and for the current board of directors to be replaced.

Despite all the gloomy news, CAW economist Jim Stanford is not convinced that the airline is headed into Companies’ Creditors Arrangement Act again, noting load factors remain good, and Air Canada continues to do well among business travellers and on international routes.

Even though the airline’s pension obligations are significant at $13 billion, it ended 2011 with $2 billion in cash.

“I don’t see anything imminently dire,” Stanford said.

Nick Bontis, a business strategy professor at McMaster University’s DeGroote School of Business, thinks Air Canada will continue to survive, but it needs to learn to become more paranoid.

Large companies tend to be more bureaucratic and less nimble, less able to adapt to looming change or competition, he said.

Examples include Blockbuster, which was caught flat-footed when Netflix arrived with a revolutionary way of watching movies. Similarly, Kodak, which is in bankruptcy protection, wasn’t prepared for the arrival for digital photography. Sony, which once stood for innovation from televisions to the Walkman, is now struggling.

“As the CEOs and senior managers who have the responsibility to guide and navigate the ship of these large organizations, you have to wonder, were they not listening,” said Bontis, noting customers and employees must have been giving them feedback.

Bontis said Air Canada needs to prepare for the possibility of fundamental change in the airline industry — cabotage.

That’s a policy in which foreign airlines are permitted to operate on domestic routes.

“Air Canada has to be on their toes. They have to have full outright paranoia. Where are the markets? What routes do they need,” he said, noting WestJet Airlines is nipping at Air Canada’s heels.

“Air Canada will survive because WestJet is a fantastic competitor,” Bontis said. “If Air Canada had a monopoly, there would be no need for paranoia.”

[ACT7]

Has anyone else noticed that Air Canada has become a lot stingier with upgrades recently? Even last year, 15 empty seats in J a week before flight meant a guaranteed upgrade. Now, it's looking like they'd rather have an empty seat up front than upgrade Elite and Super Elite. Or worse, they letting their own staff take J seats instead of paying customers.

[YU-AMC]

[QUOTE=Ulisesrguez;90569459]

Originally Posted by YU-AMC

Looks like I got lucky to board their newly refurbished A330. (If that is it)



Those are Ex-Mexicana's birds that's why they have high density configuration and PTV's

yEAH I just saw it. Btw it's only 2-3 years old, but it does not have webcam mounted on the belly like Alitalia's A330...

[everywhere]

Air Canada is shifting its strategy for launching a discount operation, focusing on locating a new low-cost international carrier in Vancouver in a bid to tap into the potential of Asian destinations.

Plans call for the new entity to take over Air Canada's overseas flights in and out of Vancouver on wide-body aircraft. Some pilots and flight attendants will be from Canada and others could be based offshore.


Vancouver has emerged as the focal point because Asian markets offer the best growth prospects while the euro zone debt crisis has relegated Europe to a lower priority for Air Canada.


"Vancouver has been an underperforming market for Air Canada on international routes," said one industry official. "Air Canada is trying to figure out how to make Vancouver work."


The quest to attract more traffic to and from Asia will pit the Air Canada-backed entity against carriers that already have a strong customer base, such as Cathay Pacific Airways.


In an effort to start the discount carrier by the spring of 2013, Air Canada is seeking to bring in an airline partner and a financial investor to avoid having to obtain approval from its pilots' union to forge ahead.


The Air Canada Pilots Association (ACPA) possesses veto power over any new venture controlled by the Montreal-based carrier. But Air Canada envisages an ownership structure that would keep its stake at less than 50 percent, while giving minority stakes to a foreign airline and a financial player yet to be confirmed.


Air Canada chief executive officer Calin Rovinescu first disclosed plans for a low-cost carrier based in Central Canada in April 2011, targeting markets in Europe initially, and later Mexico and the Caribbean.


But the country's largest carrier has run into resistance from ACPA and watched tour operator Transat A.T. Inc. struggle amid fierce competition to fly travellers between Central Canada and Europe.



Air Canada has now turned its attention to reinventing its presence in Vancouver, which would serve as the new operation's base for service to and from China, Japan, South Korea and other Asian countries.


Air Canada will remain a member of the Star Alliance of airlines and still handle domestic flights in and out of Vancouver, as well as provide service between Vancouver and the United States, Mexico and the Caribbean.


Mr. Rovinescu was in Vancouver last week during a meeting of the Star Alliance. He met with a senior B.C. government official to provide a briefing on Air Canada's vision for raising Vancouver's profile as an international aviation hub.


There will be an impact on employees in Vancouver at Air Canada, but new jobs will be created at the low-cost operation, so the airline is banking on political support in British Columbia for the transition.


While Air Canada declined comment Tuesday, Mr. Rovinescu said last week at the company's annual meeting that "we are evaluating various low-cost carrier business models."

Ben Smith, Air Canada's chief commercial officer, is spearheading the project to make Vancouver the centerpiece of the discount unit's launch.

Under the original strategy, Air Canada would have signed a code-sharing pact with its planned low-cost division to co-operate on flight reservations and baggage handling, but a revised proposal calls for the West Coast entity to be effectively independent and have the flexibility to align with a partner that doesn't necessarily belong to the Star Alliance.

Union leaders are upset that Air Canada wants to borrow major elements of the strategy deployed by Australia's Qantas, which runs the low-cost operation Jetstar with airline partners in an array of Asian markets, including service to Japan, Singapore and Vietnam.


Qantas has expansion plans slated next year in a Hong Kong-based joint venture with China Eastern Airlines Co. Ltd. for China, Japan and South Korea.


Vancouver is currently served by Asian carriers such as Cathay, Japan Airlines, Korean Air and Taiwan-based EVA Airways.


Mr. Smith has held meetings with prospective partners such as Cathay, Air China Ltd. and International Airlines Group, parent of British Airways and Spain's Iberia, but a deal remains elusive.


Air Canada would like to sign up a partner from China, though it is also possible that the Vancouver-based joint venture could instead involve a European-based carrier such as Virgin Atlantic, which is 51 percent owned by British billionaire Richard Branson and 49 percent by Singapore Airlines.

http://www.wcarn.com/cache/news/19/19774.html

[hkskyline]

Doubt it will work. As long as it hires Canadian crew, their cost base will always be higher than Chinese carriers, who offer full service at a major discount.

[deasine]

As I posted in another forum, I see this more of a move for AC to dismantle the "legacies" of a legacy carrier. AC has been toying with the idea of LCCs for a while now: they proposed a TATL LCC, but saw financial trouble with Transat. Then, they had an idea for one based in the Caribbean to take advantage of the North America to South America business. Now, they are proposing a TPAC one? Clearly, the location doesn't seem to matter. What seems to matter is the formation of a LCC.

By forming a LCC, AC can begin dismantling the airline into several smaller pieces and begin weakening the current union labour workforce. Then, if the LCC business isn't working back as planed, it can get refolded into the carrier (i.e. ACTango became a booking fare class type).

[everywhere]

Airbus and Air Canada make North America's first "perfect flight"
(WCARN.com, Airbus PR, June 18)

Airbus and Air Canada are performing today North America's first "Perfect Flight" over international borders, with the goal of cutting CO2 emissions by more than 40 percent compared to a regular flight.


The commercial flight on an Airbus A319 aircraft from Toronto, Canada to Mexico City will combine the use a modern, state-of-the-art aircraft, powered by sustainable alternative fuels, guided by streamlined Air Traffic Management procedures and facilitated through best practice operations to under-pin the industry's four pillar strategy to tackle carbon emissions.

The Air Canada flight (AC991) is the second leg out of a series of four biofuel flights taking the Secretary General of the International Civil Aviation Organization (ICAO) Raymond Benjamin to Rio de Janeiro for the United Nations Conference on Sustainable Development (Rio+20).


The flight combines best operational and environmental practices available today. Dubbed as "Perfect Flight", it includes:


1). Operation of the most eco-efficient aircraft family in its market segment.


2). Use of sustainable bio-fuel blend (a 50 percent blend) made from used cooking oil supplied by SkyNRG.


3). Optimized routings and flight altitude. In agreement with the Air Traffic Management authorities, the Airbus A319 will fly the most direct route, using the most efficient vertical flight profile and applying a Continuous Descent Approach (CDA) into Mexico City to save fuel and limit noise.


4). Combination of several eco-efficient operational procedures such as single engine-taxiing, external aircraft cleaning for improved aerodynamics, light weight cabin equipment and a neatly tailored flight plan.


"Today's flight with Air Canada proves that the aviation industry is in a strong position to reduce emissions and fly many more Perfect Flights," said Fabrice Brégier, Airbus President and CEO.



"To make this a day-to-day commercial reality, it requires now a political will to foster incentives to scale up the use of sustainable biofuels and accelerate modernization of the air-traffic-management system. We need a clear endorsement by governments and all aviation stakeholders to venture beyond today's limitations."


"Air Canada fully accepts its responsibility to reduce its footprint and our first flight using biofuel tangibly demonstrates our ongoing commitment to the environment. Since 1990 our airline has become 30 per cent more fuel efficient and we are determined to increase these gains through cutting-edge measures such as those being showcased with this Airbus A319 Toronto-Mexico City flight, our greenest ever," said Duncan Dee, Executive Vice President and Chief Operating Officer at Air Canada.



As a leading aircraft manufacturer Airbus is in pursuit of the "Perfect Flight" and believes that its scale-up can start today to shrink the environmental footprint of an aircraft's flight to a minimum. More than 90 percent of Airbus Research & Technology investments are for the benefit of the environment.



Airbus is committed to meet the industry targets: to grow carbon neutral by 2020 while improving fuel efficiency by 1.5 percent per year.

http://www.wcarn.com/cache/news/19/19856.html

[hkskyline]

@ HKG

[everywhere]

China Eastern to codeshare on WestJet flights in North America
(WCARN.com/Airlines and Destinations, June 22)

Canada's WestJet has entered into a codeshare agreement with China Eastern Airlines, one of the largest airlines in mainland China.

Tickets are available for codeshare flights from July 1.


The codeshare agreement allows China Eastern Airlines to market and distribute WestJet-operated flights by placing its "MU" flight indicator on WestJet-operated flights within North America.


"We are very pleased to announce this code-share relationship with China Eastern Airlines," said John MacLeod, WestJet's vice-president, network management and alliances. "China Eastern is a high-quality airline and this code-share is an important step in our strategy to welcome on board new guests from around the world."


In addition to China Eastern Airlines, WestJet has codeshare agreements with American Airlines, Cathay Pacific Airways, Delta Air Lines, Japan Airlines, KLM and Korean Air.


China Eastern Airlines is a member of the SkyTeam alliance and has codeshare agreements in place with several other SkyTeam members, including Delta Air Lines.

http://www.wcarn.com/cache/news/19/19903.html

[hkskyline]

Source : http://pic.feeyo.com/posts/565/5656756.html

[hkskyline]

Source : http://pic.feeyo.com/posts/567/5678820.html

[hkskyline]

Source : http://pic.feeyo.com/posts/569/5691923.html

[YU-AMC]

wOW wow! Thanks for the picture.


Btw looks like Air Canada is looking into creating LC longhaul with their 767s birds. Lots of talk on airliners.net.

[hkskyline]

Originally Posted by YU-AMC

Btw looks like Air Canada is looking into creating LC longhaul with their 767s birds. Lots of talk on airliners.net.

I took a ride on the renovated 767 across the Atlantic back in 2009 and was quite impressed how great the old bird looked inside. Wouldn't mind trying them again once they turn LCC.

[YU-AMC]

Originally Posted by hkskyline

I took a ride on the renovated 767 across the Atlantic back in 2009 and was quite impressed how great the old bird looked inside. Wouldn't mind trying them again once they turn LCC.

Hmm I will put a link when I find it, but some Air Canada insiders are saying that it will be 270 pax configurated B767 as LC model.

[hkskyline]

Originally Posted by YU-AMC

Hmm I will put a link when I find it, but some Air Canada insiders are saying that it will be 270 pax configurated B767 as LC model.

Ah .. so it will be all Y I presume!

[YU-AMC]

Here, it says AC fleet and LC thing,

http://www.airliners.net/aviation-fo....main/5534627/

[YU-AMC]

Originally Posted by hkskyline

Ah .. so it will be all Y I presume!

I doubt they can make any profits with all Y.... I know they will outsource the staff, but still. Correct me if I am wrong.

[hkskyline]

Originally Posted by YU-AMC

I doubt they can make any profits with all Y.... I know they will outsource the staff, but still. Correct me if I am wrong.

Yea ... think it's an excuse to reduce labour costs by creating yet another new airline in a separate legal entity.

[YU-AMC]

Originally Posted by hkskyline

Yea ... think it's an excuse to reduce labour costs by creating yet another new airline in a separate legal entity.

I highly doubt it will do any good because the new B787s will make losses just as their main backbone fleet. That's if they run the company as they used to. I think they are fed up with small leisure long haul start ups, so They want to try something before they are forced to get their house in order.