AC's future

[Topspin]

Hey folks,

Reading this thread (Richard Milton Leaving):
http://www.avcanada.ca/forums2/viewtopi ... 31&t=43667

And post's like this:

No worries....Westjet will buy or merge with Air Canada under the direction of the Canadian Gov't., just as what was done in the past!! LOL!!

Trying to gain an understanding of what you could call, "aviation politics," in Canada?

I realize my history is lacking, but wondering what sort of influence the government has had on AC's ops in the past, and predictions for government intervention in the future.
Street folklore would tell you that AC is owned by the government, but this is obviously untrue to anybody that has opened a book. Yet there appears to remain, some sort of control?

[Topspin]

I read articles like this and it makes me think I don't know enough......
http://www.thecanadianencyclopedia.com/ ... RTM0012460

[Martin Tamme]

Just look up "Air Canada Public Participation Act". Although the Government does not control/own Air Canada, it regulates/restricts Air Canada via a specific law that only applies to Air Canada.

[Topspin]

Just look up "Air Canada Public Participation Act". Although the Government does not control/own Air Canada, it regulates/restricts Air Canada via a specific law that only applies to Air Canada.

Sorry but all I was able to remove from the government bureaucracy was the language requirement. Any way to spell it out a little bit more basic without wasting your time?

[Stick-Shaker]

There is more to it than language policy (although this in itself is the bulk of AC Public Participation Act, and a huge expense for AC because everything we do must be in both official languages including all company manuals and correspondence with employees, and public, etc). Essentially it is a act that dictates what AC can and cannot do during its routine operations, and includes restrictions where AC can locate its head office (YUL), and originally where it could locate its maintenance bases regardless of operational viability/cost.

I think the Harper gov't spoke of scraping the Act back before it took power. (2004 or so) Its about a level playing field. What applies to AC, doesn't in all cases apply to WestJet. Milton's book explains the Act very well.

[Topspin]

when Air Canada goes bankrupt again and it will

No worries....Westjet will buy or merge with Air Canada under the direction of the Canadian Gov't., just as what was done in the past!! LOL!!

Fact, Fiction or Sarcasm? Or perhaps all 3?

[Jaques Strappe]

when Air Canada goes bankrupt again and it will

No worries....Westjet will buy or merge with Air Canada under the direction of the Canadian Gov't., just as what was done in the past!! LOL!!

Fact, Fiction or Sarcasm? Or perhaps all 3?

All three for sure with emphasis on sarcasm. I doubt it is any secret to anyone however that if Air Canada had been allowed to conduct its' business without government interference since it went private over two decades ago, the company today would be very different. There would not have been a merger for one thing. I still remember Chretien on the CBC stating that any bailout of Canadian, will include Air Canada. I remember the general opinion of the Canadian public was that Canada's population could not support two national airlines, so Air Canada and Canadian should be merged. The day after the merger, the public cried that there could be no monopoly! So the competition bureau was brought in to dictate what Air Canada would charge for fares. No, Air Canada was not influenced by the government at all. [ sarcasm ]

As far as the Air Canada act is concerned, it governs so many things that do not apply to any other carrier operating in Canada. When Air Canada generates any kind of document, it must be in both languages. It must provide on board service in both languages. It must maintain its' headquarters in Montreal. It must provide service to smaller communities. Westjet can go into a community today and if it doesn't turn a profit within a month, they take their toys and go home. Fair enough. If Air Canada does that, the mayor is on Parliament Hill the next day demanding service. Air Canada is then back in there losing money or at the very least, defending their position. St John's is a classic example.

The landscape has changed somewhat over the past few years but it is still the company the public loves to hate and demand everything for nothing from.

[Traf]

I wonder what would happen if AC told the Gov't to shove it up their a$$. Want french? Fine, you pay for the printing and training. Want small town coverage? Fine, you top us up to make the route profitable.

In reality, what could the gov't do? If AC really stood up and said "we are not a crown company and you are making us do things that others inthe industry are not. F*&k YOU!!!!" Would they get a time out or be sent to bed with no desert?

[007]

Excuse me Traf, I think you touch something that you shouldn't. [b]Pay If you want the service or training in french[/b]. I'm a french canadian and as far as I know we are a country with 2 official languages. So, the english peoples like you should pay if they want training in english, now everything will be in french. Is that make any sense ??? If you what the buissiness you should offer a service. If you what staff from everywhere you have to do some parts in other language. Westjet is now servicing Quebec city and they speak in french more often than the Jazz cabin crew. I don't what to start that war again but you should think before you write. Also, it's not only the Govt's that want french at Air Canada, their is a lot of employees and customers...

[Topspin]

Excuse me Traf, I think you touch something that you shouldn't. Pay If you want the service or training in french. I'm a french canadian and as far as I know we are a country with 2 official languages. So, the english peoples like you should pay if they want training in english, now everything will be in french. Is that make any sense ??? If you what the buissiness you should offer a service. If you what staff from everywhere you have to do some parts in other language. Westjet is now servicing Quebec city and they speak in french more often than the Jazz cabin crew. I don't what to start that war again but you should think before you write. Also, it's not only the Govt's that want french at Air Canada, their is a lot of employees and customers...

I think what he's implying though 007, is that the government shouldn't be forcing french on air canada. What if the government forced a private company in montreal to produce everything in english as well? There would be outrage, it would never fly. AC is a private company and realistically the government shouldn't have anything to do with it.

I guess my original question would be, if AC were to file chapter 11 again, what role would the government play in reorganization, if any? General public opinion would tell you that the government is bailing out AC with cash, but it doesn't seem this would be the case. What is their role?

[Traf]

I'm a french canadian and as far as I know we are a country with 2 official languages. So, the english peoples like you should pay if they want training in english, now everything will be in french. Is that make any sense ???

That makes about as much sense as your english does! I should thank you though. Your little french rant proves my point.

I asked what would happen if AC was allowed to run it's business without gov't input and get treated just like every other airline in this country. What was your reaction? You went off on a fench this, french that rant!

That is so typical. If WJ wants to print their manuals in english only and have their HQ in an english province, no one says a word. If AC wants to do the same, there is a big emotional reaction from the french . WJ goes on about it's business wherever and however they want. If you get french service in QC, that is because they CHOSE to give french service. Good business practice is the only reason they did it. AC and any airline going into the Quebec would do the same.

Westjet is now servicing Quebec city and they speak in french more often than the Jazz cabin crew.

You seemed proud that WJ provides more french service than AC. Funny that. All they had to do was provide you with a couple of french PA's and you are proud of them. Yet, they do business in english 99% of the time. They have no french manuals, no french training and I would bet when they come into YUL the crews are speaking english on the radio. I would think every frenchman and his brother would be outraged that they have an HQ in the west and don't print their manuals in both languages. What is going on here 007? A double standard?

The point I was trying to make in Canada's other official language was that there are rules applied by the gov't to AC that WJ and the others do not have to follow. Since AC is not a crown corp., why do they have to follow one set of rules and the other airlines get to follow another? It is complete BULLSH%T!!!

I agree with topspin, if a private french company was forced to print everything in english and keep its HQ in Ontario, their would be an outrage. This is not a french vs english argument. This is an argument about AC having to jump through gov't hoops that no other airline in this country has to do. I used the french thing as an example. You proved my point by turining it into a french issue! Good job!

[jeff_w_yeg]

The point I was trying to make in Canada's other official language was that there are rules applied by the gov't to AC that WJ and the others do not have to follow. Since AC is not a crown corp., why do they have to follow one set of rules and the other airlines get to follow another? It is complete BULLSH%T!!!

I'm no expert, but could it be partly because Air Canada has their head office in Montreal & is therefore subject to the language laws of the province of Quebec? I dunno...I'm just "spitballing" here...

Also, interesting story on the Toronto Star website this week:

Air Canada union demands help for airlines

[Old fella]

Naw, not to worry. When we start seeing one way fares from YYZ to YEG or YYT three months in advance starting at $1000.00 well then yes, you will have a problem. If you see those kind of fares from yyz to any point down south in the sunny weather then you are gonna really have problems!!!!!!

[whiteguy]

The point I was trying to make in Canada's other official language was that there are rules applied by the gov't to AC that WJ and the others do not have to follow. Since AC is not a crown corp., why do they have to follow one set of rules and the other airlines get to follow another? It is complete BULLSH%T!!!

I'm no expert, but could it be partly because Air Canada has their head office in Montreal & is therefore subject to the language laws of the province of Quebec? I dunno...I'm just "spitballing" here...

Also, interesting story on the Toronto Star website this week:

Air Canada union demands help for airlines

Its the government that forces AC to keep head office in Montreal.

[Hadji Ramjet]

At the time of the ACPPA, Air Canada was given an office building (transferred from another Crown corporation) in Montreal to ameliorate the requirement to keep their HQ there. Pity the airline sold the building and pissed the money away.

[TG]

That makes about as much sense as your english does! I should thank you though. Your little french rant proves my point.

And I hope your second language abilities gives you the right to criticize his English.

How about Air Canada removing "Canada" from its name and becomin Air something else.
It might solve the (government+languages) problems

[CanadaEH]

The only requirements AC must follow (and correct me if I'm wrong):

HQ in YUL.
Maintenance base in YWG.
French/English on ALL flights (you can consider all material documents in this as well (manuals, etc.)).

There is no requirement that forces AC to serve any specific destination, which is a common myth.

What will be interesting to watch over the next few years is that as AC's marketshare erodes and WS grows, how the government will react? If, hypothetically (and please - this is a hypothetical, I'm not trying to start a pissing match), WS has a 51%+ hold on the domestic market, will the government require/force WS to do anything specific? IE all flights must have english/french? HQ must be in YYC? I highly doubt that but to have a majority player other than Air Canada would be something even the government would be surprised to see. How will Air Canada react if that were the case? If its hamstrung by a $200M/year requirement (I don't know the actual cost) at what point does it stand up and say enough is enough?

FWIW, I am against AC being required to do anything under the ACPPA. Providing language service is a business decision that's a given, in my mind. Just as providing German/English when flying to Germany or Thai/English if you were flying to Thailand. If anything the government should be doing a lot more to help the airlines in Canada. We're being raped by fees and surcharges and put at a competitive disadvantage compared to our American counterparts. We need to be considered a vital component of this countries economy and not a cash cow for revenue to spend elsewhere.

[Hadji Ramjet]

French/English on ALL flights (you can consider all material documents in this as well (manuals, etc.)).

French approach plates, MEL, AOM, FOM? Notams in francais, really? Don't think so, Tim.

[tonysoprano]

What will be interesting to watch over the next few years is that as AC's marketshare erodes and WS grows, how the government will react? If, hypothetically (and please - this is a hypothetical, I'm not trying to start a pissing match), WS has a 51%+ hold on the domestic market, will the government require/force WS to do anything specific? IE all flights must have english/french? HQ must be in YYC? I highly doubt that but to have a majority player other than Air Canada would be something even the government would be surprised to see. How will Air Canada react if that were the case? If its hamstrung by a $200M/year requirement (I don't know the actual cost) at what point does it stand up and say enough is enough?

Canadian Airlines had grown to beyond where WJ is now and was never required to operate by the same rules as AC. Those rules were inflicted on AC because the government of the day played a political game to ensure Quebec was happy and a "lifeline" between Ottawa and AC was still maintained. In short, don't look for WJ or any other airline to be subject to those same rules, no matter how big you grow. On the question of how will AC react, there is no question it will do nothing and accept the status quo. But it will fight the same battle to maintain domestic superiority the way it did with Canadian. Only this time it is not dealing with Canadian but a whole different animal. I do see the day where WJ will dominate the domestic skies, no strings attached. One just has to look at the European model.

[Rebel]

Back in 1937 TCA (AC) creation was political and that’s what caused the ammonsity between CPA (Canadian) and TCA (AC). The federal government has always used AC (TCA) as an instrument of its political policy. Any business decision that AC makes that does not conform to the government "vision" is either reversed by a telephone call or a quiet chat on the golf links. If that doesn't work they just pass a government decree as in the AC act. There has always been a relationship of “ I’ll scratch your back if you scratch mine” as in the old boys network. IMHO the government will never allow any carrier to achieve greater dominance then AC for political reasons.

Its matters little whets’ right or wrong it’s political, you live in Canada.

[Old fella]

Back in 1937 TCA (AC) creation was political and that’s what caused the ammonsity between CPA (Canadian) and TCA (AC). The federal government has always used AC (TCA) as an instrument of its political policy. Any business decision that AC makes that does not conform to the government "vision" is either reversed by a telephone call or a quiet chat on the golf links. If that doesn't work they just pass a government decree as in the AC act. There has always been a relationship of “ I’ll scratch your back if you scratch mine” as in the old boys network. IMHO the government will never allow any carrier to achieve greater dominance then AC for political reasons.

Its matters little whets’ right or wrong it’s political, you live in Canada.

Good post old cock. Read National Treasure: The History of Trans Canada Airlines by Peter Pigott c 2001. A good mixture of history steeped with a political flavour

[piggy]

interesting how history reveals itself, however, I think the future of aviation in canada will be controlled by simple market forces to a greater degree than ever before.

welcome to the era of $200 oil, and high oil prices to stay for a very long time. This is a structural change in worldwide consumption of oil and boys and girls, high oil is here to stay.

The sooner people realize that , the sooner there will be an adjustment to the economy and how much is consumed.

If there is a market which is more exposed to oil that aviation, please tell me because i am at a loss what it is??
AC will always exist, but really, in their current form, at $200 oil, get ready for major change over the next 5 years.
It will be the fittest cat that wins this game, and that winner will be lucky to even survive. I would be willing to bet that Westjet will have more market share in domestic canada than AC in the future--
Most guys than manage millions say their money is with WJ, and not with AC. Simple because their cost structure is way out of wack, when oil price is up there.
If the government trys to regulate the industry, when WJ, the darling if the airline industry is so successful-even with high oil, they will be laughed at

[Hadji Ramjet]

There would not have been a merger for one thing.

Of course there would have, and the merged airline would be owned by ONEX.

[Rebel]

If the government trys to regulate the industry, when WJ, the darling if the airline industry is so successful-even with high oil, they will be laughed at

You don’t honestly believe the government cares if the financial industry laughs at them. The government will do as they always do just change the rules to suit their vision. That's our history...

[Stick-Shaker]

No doubt about that. The fact is, on the very remote chance that AC requires the gov't to throw them a lifeline, they would because they would have no choice. This country's infrastructure cannot function without a national airline. Far too much depends on it, and as strong WJ is, they are not in a position to fully step into those shoes. But for now, AC will make some tough changes, and it may look very different in 3-5 years if oil stays high, but regardless, AC will still occupy most of the gates at Canadian airports.