Air Canada-Boeing back on?

[flyboeing]

Tue Nov 1, 2005 02:41 PM ET

MONTREAL, Nov 1 (Reuters) - ACE Aviation Holdings Inc. unit Air Canada (ACErv.TO: Quote, Profile, Research) said on Tuesday a binding arbitration decision resolving pilot cost issues will allow it to renew a $6 billion plan to buy Boeing (BA.N: Quote, Profile, Research) jets.

"With the successful resolution of this matter, we can now reengage Boeing to conclude an agreement on the acquisition of new wide-body aircraft and move forward with plans for the airline's future," Montie Brewer, Air Canada's president and chief executive said in a statement.

A disagreement with its pilots this summer over operating issues for new aircraft had forced Air Canada to cancel a $6 billion order made in April to buy 32 Boeing 777 and 787 Dreamliner jets.

($1=$1.18 Canadian

[golden hawk]

From the Globe and Mail

Air Canada pilot dispute resolved

Tuesday, November 1, 2005 Posted at 4:51 PM EST

Canadian Press

MONTREAL — A dispute between Air Canada and its pilots has been resolved by an arbitrator's decision that had threatened the airline's multi-million-dollar purchase of new Boeing 777 and 787 jets.

The Montreal-based airline said Tuesday the binding decision by Martin Teplitsky has resolved the matter of pilot costs and other issues relating to the airline's acquisition the new planes.

“We are pleased with Mr. Teplitsky's decision which provides us with the certainty required on pilot costs relating to the acquisition of new Boeing widebody aircraft,” said Montie Brewer, Air Canada's president and chief executive.

“With the successful resolution of this matter, we can now re-engage Boeing to conclude an agreement on the acquisition of new widebody aircraft and move forward with plans for the airline's future.”

The airline said Teplitsky's decision upholds the terms of the tentative agreement on the matter reached by the Air Canada Pilots' Association and Air Canada in June.

The mid-sized, fuel-efficient planes are seen as a key component of Air Canada's plans to rejuvenate its fleet, keep costs down and remain competitive.

However, the airline pulled its order this summer when the union's membership voted against contract changes that have been negotiated with Air Canada by their leadership.

At issue is the seniority list that is used to decide how pilots and co-pilots are assigned to aircraft. Different union factions have fought bitterly among themselves since Air Canada bought Canadian Airlines nearly five years ago.

However, a group of Air Canada pilots who formerly worked for Canadian Airlines boycotted the mediation process.

http://www.theglobeandmail.com/servlet/ ... /Business/

[flyincanuck]

From the Globe and Mail


The mid-sized, fuel-efficient planes...

Good stuff AC, but since when was the 777 a mid-sized plane? Oh right, it only has two engines.

[YYC the place to be]

Thing air getting better and better in the industry. Now lets see if we can get the old suppy and demand thing working in us pilots favor.

[Blue Yonder]

Thing air getting better and better in the industry. Now lets see if we can get the old suppy and demand thing working in us pilots favor.

I think I know what you're talking about but, you appear to be a little sauced when writing this...

[bizjet_mania]

Unfortunately, AC has become one of the most disfunctional airlines out there. Everytime it has a chance to be a leading carrier it either downsizes, cancels orders or something else. It has come to the point where its "Ill believe it when I see it" The real excitment died when they cancelled the orders, hopefully they got their s*** together and are more organized this time around

[Rebel]

Unfortunately, AC has become one of the most disfunctional airlines out there. Everytime it has a chance to be a leading carrier it either downsizes, cancels orders or something else. It has come to the point where its "Ill believe it when I see it" The real excitment died when they cancelled the orders, hopefully they got their s*** together and are more organized this time around

Could be but you should read this " “These results for the third quarter, traditionally our best, are the strongest results reported by any North American carrier for the period and reflect our ability to now achieve North American industry leading levels of profitability versus low cost carriers as well as legacy carriers."

[flyboeing]

TORONTO -(Dow Jones)- ACE Aviation Holdings (ACE.B.T) hopes to receive the first of a batch of new Boeing (BA) 777 aircraft in early 2007, now that a US$6 billion order for the planes has been revived.

"All in all, given the delay, it's not a bad outcome," chief executive Robert Milton said Wednesday.

He said Alan Mulally, chief executive of Boeing Co. (BA) (BA), called late Tuesday to confirm his company is "still very much willing to live up to the deal" reached earlier this year.

In April, ACE Aviation announced it would buy 32 widebody aircraft from Boeing (BA), with options to buy up to 64 more over the next 10 years. However, the deal was scrapped in June after the Air Canada Pilots' Association rejected the wage scales and working conditions offered to fly the fleet.



The dispute was later sent to arbitration.

On Tuesday, the airline announced that an arbitrator had resolved the dispute related to the acquisition of Boeing (BA) 777 and 787 aircraft. The ruling upheld the original agreement reached in June.

Milton said Boeing (BA) would respect the pricing and delivery flexibility of the original deal, although ACE Aviation has lost the first few delivery slots which were scheduled for 2006.

He said he hopes to receive between six and seven Boeing (BA) 777 aircraft in the first half of 2007, with the first delivery in January.

As well, Milton said the resolution of the pilot dispute will allow the airline to bring in used Boeing (BA) 777 airplanes during 2006. That could allow the airline to phase out some of its older Airbus 340s by the end of the year.

http://money.iwon.com/jsp/nw/nwdt_rt.js ... t=INDUSTRY

[Hornblower]

Was the deal ever really on or off?? It was really only a bargaining ploy anyway.

[Mig29]

phase out older A340......what? Since when are 340 old, I mean relatively speaking, when you compare them to 767!!??

I respect the 767, but some of them are there since mid 80s'!! Media is so full of it, it amuses me every time..

[monkeyspankmasterflex]

Air Canada pilots should cool their jets


The Gazette


November 3, 2005


At first glance, it certainly seems like good news that Air Canada has revived its $6-billion order for 32 Boeing wide-body jetliners, in the wake of an arbitrator's decision Tuesday on the issue of labour costs for the pilots who will fly the planes and other matters.

But we might not yet be finished with this costly labour squabble.

Air Canada president Robert Milton insisted yesterday that he expects largely the same advantageous price he received when he first placed the order last spring, before a small minority of pilots scuttled the labour agreement. But Boeing's fortunes, sagging then, are stronger now. Milton's optimism might be misplaced.

The one thing we do know is not exactly positive. Air Canada will now take delivery of the first planes in early 2007 rather than mid-2006 - and with airlines around the world gyrating from boom to bust from one day to the next, half a year is an eternity. Canada's national carrier is flying high right now. It's making money, load factors are beating records and its main domestic rival, discounter WestJet, is being buffeted by the markets and Air Canada itself.

Still, the terms the arbitrator reaffirmed are the same ones the pilots narrowly rejected in June - five months and much turmoil and uncertainty ago.

Everyone at Air Canada made concessions to keep the airline aloft when it was ailing a few years ago: pilots, flight attendants, baggage handlers, ticket counter staff and others. But the atmosphere is still poisoned by this story forgotten by everyone except some so-called original Air Canada pilots, who refuse to recognize the merged pilots' seniority lists after the government-mandated 2000 takeover of Canadian Airlines International Ltd.

They object to what they claim was preferential treatment given to former CAI pilots, resulting in the demotion of some Air Canada pilots and the unwarranted leapfrogging of certain CAI pilots, some of whom vaulted 700 spots in a merged list of 2,800 pilots.

The Boeing deal resolution is binding and therefore settled. But is this the end of the matter? Not by a long shot. A pilots' union executive said yesterday that, parallel to the Boeing issue, the same arbitrator, Martin Teplitsky, is mediating efforts to resolve the underlying seniority problem "once and for all."

His conclusions are expected in a few weeks, but there are already ominous rumblings. Failure to resolve the problem to the satisfaction of the original Air Canada pilots would signify "a failure of the process" and would "take us back to Square One - the toothache will not go away," according to the union leader. In other words, the union is saying, ultimately this issue must be settled our way or no way.

The airline's future cannot be held hostage indefinitely to this issue, which has now been "settled" three times.

This isn't an obscure internecine union fight with no discernible impact on the public. Canadians have a vital stake in a healthy airline industry. It's time for the few hard-done-by pilots to bury the hatchet and get on with life.

[YOWFLYER]

It wasn't just 777 it was also 787 "dreamliners" - that is what they were refering to when they said "mid-sized" aircraft.

And they did cancel the order for the 777's but the 787's were not.

[monkeyspankmasterflex]

Air Canada - Boeing Deal Back On
Fri, 04 Nov '05

Seniority List Squabble Delays Deliveries
The on-again, off-again Air Canada deal for some $6 billion worth of Boeing jets -- up to 32 new 777 and 787 Dreamliner aircraft -- is on again.

Canadian labor arbitrator Martin Teplitsky upheld a labor contract between the airline and its pilots that the pilots had previously rejected, making the purchase of new jets impossible. This forced cancellation of the deal in June.

The arbitration, completed November 1st, was binding upon both parties. Now the Montreal-based airline is clear to resume negotiations for deliveries of up to 18 777s and 14 787s (below) that the airline wants for new international routes that are a central part of its strategy.

The pilots reportedly did not reject the contract because of any objection to the international routes or new, fuel-efficient Boeing jets. Instead, the rejection vote was a way for the rank and file members of the Air Canada Pilots' Association to express their dissatisfaction with the merged seniority list that resulted from the 2000 Air Canada/Canadian Airlines merger. The majority of pilots who were with Air Canada before the merger believe that the contract is biased in favor of former Canadian Airlines crewmembers.

Air Canada bought Canadian, which was teetering on the brink of collapse, in 2000. The events of 2001 made it harder for Air Canada to digest its former competitor, and pushed the merged carrier itself into reorganization, the Canadian equivalent of Chapter 11 bankruptcy.



Air Canada remained in reorganization until little over a year ago, and remains far from financial health.

Air Canada has lost more than just the time spent resolving the dispute. Between the June cancellation and the November reinstatement, other eager buyers snapped up all of the Canadian line's 2006 delivery slots. Boeing and Air Canada are now aiming for 2007 for the earliest deliveries of the new jets.

As many as three 777s could be delivered in 2007, with the first 787 Dreamliner coming no sooner than 2010.

A statement from Air Canada president Montie Brewer said that "[W]e can now re-engage Boeing ... on the acquisition of new wide-body aircraft and move forward with plans for the airline's future."

Under the new contract, 777 captains would earn up to $238.93 ($Canadian) and 787 captains $213.02 ($C) an hour, for a typical 80 hour month. Teplitsky ruled that the agreement was "made in good faith by experienced negotiators," according to the Toronto Globe and Mail.

"We are pleased with Mr. Teplitsky's decision, which provides us with the certainty required on pilot costs," the paper quoted Brewer as saying.

While arbitrator Martin Teplitsky has ruled on the validity of the labor contract, the thorny underlying dispute on pilot seniority remains on his desk. There were no indications of when a ruling may be expected.

Boeing may have welcomed the news, but the markets didn't. Boeing stock closed down 35 cents on the New York Stock Exchange, and continued down in after-hours trading.

Eh.