Air Canada threatening to cut A220 orders....

[schnitzel2k3]

...if Canadian government doesn't ease restrictions.

Sorry, not click bait, just long title.

https://www.msn.com/en-us/travel/news/a ... li=BBnb7Kz

Is it really a threat? How much business is Bombardier still seeing from this deal and how much is really lost if the Canadian government keeps these restrictions in place and AC cuts the last 70ish airframes.

I would imagine the pilots will take a bigger hit if these airframes don't hit the line than the Canadian manufcaturing side.

[skypirate88]

It's not that Bombardier is receiving anything, it's that the airframes are still being built in Quebec.

[GoHomeLeg]

I'm rooting for Air Canada, but trying to pit the Canadian public against the government by threatening to cancel aircraft orders causing job lose at a Canadian manufacturing plant in Quebec is not going to sway the JT government.

The Canadian people don't support an airline bailout because they feel the airlines have been ripping them of for years. And they don't like Bombardier because they hate the fact that a mismanaged company like Bombardier as received so much tax subsidies.

Canceling orders would just but Canadians out of work at several companies. Pilots, FA, mechanics, assembly workers, and various supply chain companies.

Air Canada is a Quebec based company threatening Quebec based jobs.

[fish4life]

I honestly think it’s a real threat, the 220 is fantastic when times are good and fuel is more expensive. When fuel is cheap and you are low on capital you might as well cut the small capacity but high capital aircraft

[pelmet]

I think Airbus has plenty of orders for the aircraft now and can move others into the slots that AC gives up. Of course, some may not want their deliveries any earlier but I have read that the A220 is an aircraft that may not be affected as much as airlines can use it as a 737 replacement for their lower pax figures.

As well, didn't AC get such a sweetheart deal at the time that BBD was losing money on every sale. Maybe a cancellation would be a positive financially for Airbus and then AC will have to pay more in a few years for the type.

Sorry, but the 14 day quarantine needs to stay, otherwise AC will end up going back to the dark days of April in terms of pax loading if things get bad again.

[altiplano]

How can you buy airplanes if there's nobody to put in them? No money coming in to pay for them?

AC said it would cancel 737 orders too.

It's just the facts of it, you can't buy shiny new things if you can't pay for them or finance them, and really have no need for them.

[rudder]

AC shows $2.2B in committed capital expense for 2021 mostly related to new aircraft deliveries.

That total expense is not affordable under the current revenue and demand environment. Something has to give. Either revenue improves or aircraft orders will be deferred or cancelled.

AC is not alone in this exercise.

[co-joe]

I'm rooting for Air Canada, but trying to pit the Canadian public against the government by threatening to cancel aircraft orders causing job lose at a Canadian manufacturing plant in Quebec is not going to sway the JT government.

...

It very well could. JT loves Quebec. So far he doesn't seem to GAF about aviation though.

[Inverted2]

Trudy doesn’t care about airlines. They contribute to global warming he thinks. He doesn’t need airline employee votes to get re-elected now since he bought millions of votes with the free handouts (CERB). He doesn’t fly “commercial” anyway.

Calin is pissing in the wind unfortunately.

[Cavalier44]

As a currently laid off pilot, I’m sympathetic to the cause of having the 14-day quarantine removed because I believe that the sooner it’s removed, the sooner I’ll be able to return to work. With that being said, the COVID-19 outbreak is an unprecedented crisis, and many areas are now seeing the repercussions of relaxing their restrictions too early.

In Canada, there appears to be broad public support for the 14-day quarantine restriction as well as the continued closure of the border between Canada and the USA. I believe Air Canada is on the wrong side of the issue here - if the government caves to pressure on this, it will set the precedent that companies such as AC can bully the government to get their way any time policies are in effect which aren’t to their liking.

Regardless of whether or not Justin Trudeau cares about the airlines, this is about Calin Rovinescu and the Air Canada executive team believing that they should have the power to dictate public health policy for this country. The Trudeau government seems to be acutely aware that there is little public appetite for an airline-specific bailout in this country; attempting to sway the government’s decision by threatening Quebec-based manufacturing jobs is poor optics on AC’s part and will only further tarnish their public image.

If CR and Air Canada want to repair their public image and regain some public support, maybe they should return their interest-free loan from the public to the tune of ~$2.5 Bn in unrefunded advance bookings. I don’t see their current spat with the government working out in their favour - public opinion simply isn’t on their side and every threat that AC makes simply erodes it further.

It’s time to get serious and start planning for the current restrictions to be in place until at least the end of the year - it’s going to be a tough few months for the aviation industry as a whole and difficult decision will have to be made. I predict that the Trudeau government will only take action if it appears that Air Canada is on the verge of failure, in that case actions will have to be taken, but I still expect whatever aid is given to come with significant strings attached and to return maximum benefit to the taxpayer.

[rudder]

CR is used to a track record of 100% success since 2008 in requests for relief or intervention made to the Feds (or agencies controlled by the Feds). That was manifest for the most part during the tenure of a majority Conservative government.

Looks like a new playbook is required.

Sticking a fork in the TRZ transaction will be the next jab at the Liberal led coalition government (on the heels of declaring 20,000 staff as surplus and relegated to government income assistance).

This government has zero understanding or sympathy for corporations or private enterprise. Forewarned is forearmed for corporate decisionmakers.

[altiplano]

Trudy doesn’t care about airlines. They contribute to global warming he thinks. He doesn’t need airline employee votes to get re-elected now since he bought millions of votes with the free handouts (CERB). He doesn’t fly “commercial” anyway.

Calin is pissing in the wind unfortunately.

Successful Air Canada privatization is a Mulroney / Conservative success story - granted, major pot holes along the way. But today, even on a massively tilted playing field (ACPPA), AC has risen up to succeed.

Trudeau and the Liberals have never liked that and AC failure would be a "you see, no body can do it better than your Government" moment. It's all about political spite.

[Inverted2]

Yes they are moving to a more socialist way of doing everything. More government in your face and his “we will take care of you” mentality. Ask a Venezuelan how that worked out.

[Gino Under]

Conditions, as they exist today, are killing the airlines. We all know that. Especially those who were shown the door. Pleading with the government to ease Covid restrictions or allowing airlines to conjure up work-arounds is simply an indication of how desperate things are for Canadian carriers. I get it. It's about survival. But it's about survival for all of us and now is not the time for our carriers to be highly competitive. They're too vulnerable as are the foreign carriers. This is not a time where we will see "if you build it, they will come". They won't. Not in the numbers needed right now.

Who among us doesn't want a quick or immediate return to NORMAL?

Cancelling A220 orders makes sense. So too would cancelling B787 orders. The MAX orders should have been cancelled a year ago. In fact, I'd suggest every carrier in Canada simply shutdown, rid themselves of inefficient aircraft and financially challenging leases (not just aircraft leases where applicable) and mothball the entire operation for at least 6-12 months.

ICAO and others (who've done the analysis) tell us 4-5 years before any return to normal can be expected.
Operating with partial loads at a time like this, including the limited cargo shipments spread out among those carriers still operating, is still operating at a loss.

Unsustainable.

If the A220s and B787s are removed from the fleet, they might (if there are any buyers who can get the financing after a recovery) repurchase those aircraft for cheap. I doubt the A220s will be had for what AC got them for in the first place.

Tough decisions ahead whether we like it or not.

Stay safe. Be kind. Follow the science.
Gino

[flyinhigh]

Agree with everything you say, with the exception of the 87.

I believe you will see the 777 gone before the 87 as the 8 is much more efficient to operate in these times. Putting 400 people on a plane to go somewhere right now will be difficult, whereas 260 is much more feasible. Look no further than our neighbours south who are already retiring their 777's.

If the A220s and B787s are removed from the fleet, they might (if there are any buyers who can get the financing after a recovery) repurchase those aircraft for cheap. I doubt the A220s will be had for what AC got them for in the first place.

[goldeneagle]

Successful Air Canada privatization is a Mulroney / Conservative success story

If you call going bankrupt a 'success', then I guess, but most of us would consider filing for bankruptcy to be an admission of failure.

[rudder]

Agree with everything you say, with the exception of the 87.

I believe you will see the 777 gone before the 87 as the 8 is much more efficient to operate in these times. Putting 400 people on a plane to go somewhere right now will be difficult, whereas 260 is much more feasible. Look no further than our neighbours south who are already retiring their 777's.

If the A220s and B787s are removed from the fleet, they might (if there are any buyers who can get the financing after a recovery) repurchase those aircraft for cheap. I doubt the A220s will be had for what AC got them for in the first place.

There was a suggestion that there are more 787’s on order for AC. There are not. 37 ordered. 37 delivered.

It is entirely likely that the 6 777-200’s parked at Marana will never leave. And there won’t be any need for high density 777-300’s for several years.

AC would be crazy to vacate the A220 orders considering the 65% discount off of list price. On the other hand, the decision to choose the MAX over the NEO, and then to cling to the MAX after the grounding, remains somewhat mind boggling.

If demand and traffic remains in the trench, AC may have to revisit its summer 2022 fleet plan which will necessitate another equipment bid.

[altiplano]

Successful Air Canada privatization is a Mulroney / Conservative success story

If you call going bankrupt a 'success', then I guess, but most of us would consider filing for bankruptcy to be an admission of failure.

Quote it in entirety...

Successful Air Canada privatization is a Mulroney / Conservative success story - granted, major pot holes along the way.

Bankruptcy was a pot hole for sure. But what brought that on? Largely the Liberal government's forced acquisition of Canadian Airlines.

[goldeneagle]

Bankruptcy was a pot hole for sure. But what brought that on? Largely the Liberal government's forced acquisition of Canadian Airlines.

Bankruptcy wasn't a pothole, it was the end of a company. A new company came out of the ashes, one that purchased the name. The Air Canada of the 90's is a completely dissolved corporate entity. The shares were declared worthless pieces of paper when the company was disolved.

But if you want to continue calling it a success, be my guest. I understand there is an outfit in the US that says the same kind of stuff, bankrupting a casino is a HUGE success...

[Gino Under]

https://www.youtube.com/watch?v=u4kVq9abmDE

Porter has the right idea. Cut the min operating costs to a minimum. Stop trying to chase an unpredictable and fickle travelling public during the uncertainty of a pandemic. The likes of which have never been seen before.

Cheers,
Gino Under