Monte leaves Air Canada

[Lost in Saigon]

Open your wallet guys.
It will be the "too big to fail" story again...

All the pilots I fly with agree that we gave WAY too much in the last CCAA. If they file CCAA again, I expect that there is no way they will get any more concessions from the pilot group.

Even the big pension scare won't work anymore because they have already removed the cost of living and many don't believe there will be any pension when they retire anyway.

I think we will all be better off to let the company fail this time. From the ashes will emerge one or more companies that will be worth working for.

NO MORE CONCESSIONS

[wallypilot]

Can somebody post the coles notes of what went on with AC and the formation of ACE? Seems to have a lot of parallels with what went on with the US financial system.

this is how I understood it, FWIW. I'm not saying this is the absolute truth:

1. Original AC (we'll call it AC1) files for Bankruptcy protection. Here, the point is to restructure in a way that makes creditors confident that you can pay them.

2. New AC (call it AC2) is born by closing down AC1, and opening up ACE Aviation, a management company that holds the assets of Air Canada, as well as the name, goodwill, etc. By doing this, the original equity of AC1 is wiped out, all stockholders left holding worthless paper(well, 12,000 AC1 shares got you 1 ACE share). New paper is issued that says on it "Shares of ACE Aviation". Investors flock to AC2 shares, thinking that they'll make a quick buck. doesn't happen. AC2 shares never trade higher than the IPO. ACE Aviation, and I believe it is Deutsche Bank own a majority of AC2 shares, and the general investing public own the rest.

3. ACE Aviation embarks on a divestment program to "capitalize" AC's assets. (ie turn into cash and pay themselves huge bonuses for generating so much cash from a bankrupt company..this includes Deutsche Bank....they are as bad as Milton, although arguably, they owe less culpability, since they fronted a lot of the cash to rescue AC during CCAA). The maintenance side is formed in to its own company, called AC Technical Services, and a large chunk of that is sold off. Jazz is separated into its own company and sodl off via and IPO. Aeroplan is carved out in to it's own company, and there is an IPO for that. So now you have ACE Aviation Shares, AC2 Shares, Aeroplan Shares, ACTS Shares, etc. Of course ACE Aviation (the Parent Company) owns 100% of all the shares of the carved out companies. They offer them for sale on the market, and make tonnes of money for ACE Aviation, not AC2.

4. ACE Aviation is sitting flush with cash while AC2 struggles. A couple months ago, ACE Aviation directors decide to wind up the ACE Aviation, and run away with all the cash, leaving AC2, Aeroplan, ACTS, and whatever other companies were carved out of AC on their own as separate companies.

Probably not completely accurate, but gives you a rough idea.

[orbit]

Just heard on BNN that AC got $38 million from GE a short while ago...that must have made them happy to hear" Ace chair person and Milton "got $42 million severence pay around the same time! In one door out the other!

I sure would not be a happy taxpayer....get Obama and and have these execs pay back the severence pay if AC wants a gov't handout!

[yycflyguy]

Just heard on BNN that AC got $38 million from GE a short while ago...that must have made them happy to hear" Ace chair person and Milton "got $42 million severence pay around the same time! In one door out the other!

I sure would not be a happy taxpayer....get Obama and and have these execs pay back the severence pay if AC wants a gov't handout!

Just tax the criminals at 90% like Obama wanted to do... enough is enough.

[2good2btrue]

No Kidding!

I don't understand how all these execs can lose all the money and run companies into the ground and then get all of these "Bonuses"????

Maybe if I start bending a/c and scaring frequent fliers, i'll lose my company enough money to get a sweet bonus!

[Letterhead]

Lost in Saigon:

If AC offers you a 50% wage cut what are your options? Will you quit, or will you engage in industrial action to show your displeasure? How long can you go without a pay cheque, and if you quit where will you go?

North American carriers are unionized seniority based closed shops (pilots at these carriers believe that their work structure serves their best interests - it does not). AC knows this and knows the pilots preference for a seniority based work structure prevents labour mobility within the "profession"; a fact that provides the corporation with a huge advantage during collective bargaining. The company also knows that the skills you need to be a pilot are not immediately transferable to any other profession and therefore there is really no "next best option" for pilots. When C3 folded many pilots went overseas, but I distinctly recall a few worked at Home Depot and others as construction labourers (a long way from the flight deck to be sure). In my view, you will be forced to take what is offered, leave for another carrier and start over at the bottom of another seniority list, or change professions altogether. If the cull that was predicted today comes to fruition, like in the U.S.A., many Canadian pilots will have flown their last commercial flight for the rest of their lives.

Now would be a good time to dispense with the closed shop mentality and look at how successful bargaining units, that understand the concept of corporate failure, organize their work lives. ACPA and ALPA are horribly unenlightened and their dues paying members continue to suffer as a result of their parochial nature.

Think multi-employer DB pension plan and a hiring hall if you still want to cling to the trade union model. Otherwise, open up access to the left seat to experienced pilots during periods of growth and create a competitive market for airline Captains. Then, and only then, will your wages and working conditions improve.

I wish you luck.

[Lost in Saigon]

Lost in Saigon:

If AC offers you a 50% wage cut what are your options? Will you quit, or will you engage in industrial action to show your displeasure? How long can you go without a pay cheque, and if you quit where will you go?

If they offer any kind of a wage cut, or request any more concessions, I will vote NO. I think the majority of the pilots will also vote NO.

Everyone I fly with, or talk to, is very pissed off that we gave up so much last time, while the rest of the employees gave up so little. Most of the other employees are back to their original working conditions. The pilots are still living with about 40% less than pre-2003 CCAA working conditions.

We made the sacrifice to save the company and they SCREWED us!

We are ready to close the doors for good. This has to stop somewhere.

We will draw the line in the sand this time. Cross the line and they will pay big time.

[Letterhead]

It is interesting to look at the current labour situation and how it contrasts with typical commercial finance transactions.

Failing corporations generally have to pay a risk premium when they go to the market for financing. A failing corporation, like Air Canada, pays this premium to its lenders for the additional risk associated with lending it funds. Most lenders will also only lend if the corporation can put up security to secure the loan or a part of the loan.

Consider the foregoing in respect of pilot labour.

Skilled labour, at Air Canada, particularly pilot labour, in an open labour market should be paid a premium for the additional risk associated with continued employment at the corporation. However, it is not. An airline cannot function without experienced captains and the skills and experience necessary to do this job well take a decade or so to accumulate. Yet, these valuable workers have no Canadian market within which to sell their skills and a failing firm can really pay them whatever it chooses.

The irony is that the seniority system in a closed shop like Air Canada actually depresses pilot wages. Not only do the pilots not have the economic freedom to leave a failing firm (their only currency is their seniority number and not their experience), they get paid less for assuming the additional risk of working for a failing firm (wage concessions). They also get no security from the corporation for assuming the additional employment risk.

Arguably, the closed shop seniority system actually operates to distort the market for experienced airline captains and drive wages down at a time when the best and the brightest would normally be looking for a better employer. If the best Air Canada captains were leaving in droves for well run carriers, the corporation would either have to pay a premium to keep their best employees, or be left with those who, for whatever reason, are not attractive to the successful carrier.

Ironically, where the executives are concerned they are typically paid retention bonuses to stay with the failing firm - no talented executive wants to work for a loser and be the person to turn the lights out. However, airline pilots seem willing, time and time again, to put themselves in that exact circumstance.

Lost in Saigon - Good. I agree, enough is enough, but you also need to examine the structural issues within the current trade union model and do it right the next time.

[gonnabeapilot]

Contrary to what some people on here seem to think, Montie isn't getting out while the getting's good. According to this article in the Globe and Mail http://business.theglobeandmail.com/ser ... iness/home Montie was fired.

The ouster of chief executive officer Montie Brewer has its roots in mid-February, when Air Canada announced that it lost $1-billion last year, raising concerns about its ability to combat the recession. Air Canada's board of directors grew increasingly disenchanted with the company's performance in recent weeks.

"It would have sent the wrong message to investors if Montie was ousted and no one was already lined up to replace him," said a source who is familiar with the airline.

On Monday, Mr. Richardson travelled from his home in Grafton, Ont., to Montreal to personally inform Mr. Brewer of the board's decision to make the change at the top.

That means that this shake up is being done specifically to screw over the employees at Air Canada. While investors seem to think that this is a positive move. I think this is the final nail in the coffin at Air Canada. The only thing that was going to save the company this year was if management learned to value their employees and empower them with the ability to make day to day decisions and cut back on the middle management that exists in its place. Why should I have to call a central number to rebook myself on a flight when the agent can do it at the gate in about 20 seconds? The agent would feel better that they've helped me out and I would feel like I'd received excellent customer service and we'd both walk away from the experience happy. This is the kind of model that Westjet uses and it's served them quite well. Instead it seems the board of directors have adopted the idea that the employees are the problem, not the solution and I'm afraid this company is going down. Thank you Milton and Co... you've destroyed a great company and I think the employee group will be missing Montie Brewer sooner than they think.

[whiteguy]

Lost in Saigon:

If AC offers you a 50% wage cut what are your options? Will you quit, or will you engage in industrial action to show your displeasure? How long can you go without a pay cheque, and if you quit where will you go?

If they offer any kind of a wage cut, or request any more concessions, I will vote NO. I think the majority of the pilots will also vote NO.

Everyone I fly with, or talk to, is very pissed off that we gave up so much last time, while the rest of the employees gave up so little. Most of the other employees are back to their original working conditions. The pilots are still living with about 40% less than pre-2003 CCAA working conditions.

We made the sacrifice to save the company and they SCREWED us!

We are ready to close the doors for good. This has to stop somewhere.

We will draw the line in the sand this time. Cross the line and they will pay big time.

The rest of the employee group gave up just as much as the pilots! Get off your high horse thinking your the only group that tried to help save the company. None of the other employee groups are back to their original working conditions. Correct me if I'm wrong, but pilots get a $200 allowance for new shoes every year. Ramp guys get $80 dollars every 2 years for saftey boots. Gee, I wonder where we can start cutting costs!!

[Rubberbiscuit]

It is interesting to look at the current labour situation and how it contrasts with typical commercial finance transactions.

Failing corporations generally have to pay a risk premium when they go to the market for financing. A failing corporation, like Air Canada, pays this premium to its lenders for the additional risk associated with lending it funds. Most lenders will also only lend if the corporation can put up security to secure the loan or a part of the loan.

Consider the foregoing in respect of pilot labour.

Skilled labour, at Air Canada, particularly pilot labour, in an open labour market should be paid a premium for the additional risk associated with continued employment at the corporation. However, it is not. An airline cannot function without experienced captains and the skills and experience necessary to do this job well take a decade or so to accumulate. Yet, these valuable workers have no Canadian market within which to sell their skills and a failing firm can really pay them whatever it chooses.

The irony is that the seniority system in a closed shop like Air Canada actually depresses pilot wages. Not only do the pilots not have the economic freedom to leave a failing firm (their only currency is their seniority number and not their experience), they get paid less for assuming the additional risk of working for a failing firm (wage concessions). They also get no security from the corporation for assuming the additional employment risk.

Arguably, the closed shop seniority system actually operates to distort the market for experienced airline captains and drive wages down at a time when the best and the brightest would normally be looking for a better employer. If the best Air Canada captains were leaving in droves for well run carriers, the corporation would either have to pay a premium to keep their best employees, or be left with those who, for whatever reason, are not attractive to the successful carrier.

Ironically, where the executives are concerned they are typically paid retention bonuses to stay with the failing firm - no talented executive wants to work for a loser and be the person to turn the lights out. However, airline pilots seem willing, time and time again, to put themselves in that exact circumstance.

Lost in Saigon - Good. I agree, enough is enough, but you also need to examine the structural issues within the current trade union model and do it right the next time.

Great post, and very interesting perspective.

This from a newspaper article:

With a new CCAA law yet to be in force, it’s unclear however, whether the airline could abrogate its union contracts, said Peter Farkas, vice-president of solvency experts RSM Richter.

Are anyone familiar with new CCAA law possibly coming into effect allowing a company to abrogate(annull) current union contracts? If so that is a scary prospect.

Wish everyone at AC best of luck going forward.

[Lost in Saigon]

The rest of the employee group gave up just as much as the pilots! Get off your high horse thinking your the only group that tried to help save the company. None of the other employee groups are back to their original working conditions. Correct me if I'm wrong, but pilots get a $200 allowance for new shoes every year. Ramp guys get $80 dollars every 2 years for saftey boots. Gee, I wonder where we can start cutting costs!!

Are you saying you gave up 40% like the pilots did? Or are you calling me a liar?

The pilot's are still working at roughly 40% less than we had prior to CCAA. There is no way in hell that any other group is anywhere near that.

When is the last time you were forced to go to work on a day off for training or a medical WITHOUT pay? We do it five times a year! EVERY YEAR!

When is the last time you were forced to work overtime with no overtime pay?

When is the last time you had to travel on company business and only paid half your payrate?

[whiteguy]

The rest of the employee group gave up just as much as the pilots! Get off your high horse thinking your the only group that tried to help save the company. None of the other employee groups are back to their original working conditions. Correct me if I'm wrong, but pilots get a $200 allowance for new shoes every year. Ramp guys get $80 dollars every 2 years for saftey boots. Gee, I wonder where we can start cutting costs!!

Are you saying you gave up 40% like the pilots did? Or are you calling me a liar?

The pilot's are still working at roughly 40% less than we had prior to CCAA. There is no way in hell that any other group is anywhere near that.

When is the last time you were forced to go to work on a day off for training or a medical WITHOUT pay? We do it five times a year! EVERY YEAR!

When is the last time you were forced to work overtime with no overtime pay?

When is the last time you had to travel on company business and only paid half your payrate?

Maybe not the 40% you claim but we gave up just as much as everyone else. Funny how that number gets bigger the closer we get to negots.

The ramp gave up stat holidays, vacation, shift premiums, pay, boot allowance, paid lunches, overtime pay...

Flight attendants don't get paid for reccurrent training either..

If your so hard done by and don't like it leave, I did!

Don't sit and pretend that the pilots group were the saviors of the airline. This is a time when the employee group needs to stand together. Everyone gave up many things to help this airline.

[Lost in Saigon]

Maybe not the 40% you claim but we gave up just as much as everyone else. Funny how that number gets bigger the closer we get to negots.

The ramp gave up stat holidays, vacation, shift premiums, pay, boot allowance, paid lunches, overtime pay...

Flight attendants don't get paid for reccurrent training either..

If your so hard done by and don't like it leave, I did!

Don't sit and pretend that the pilots group were the saviors of the airline. This is a time when the employee group needs to stand together. Everyone gave up many things to help this airline.

If you didn't give up 40%, how can you say you gave up as much as me?

I never said the pilots were the saviours of the airline. I said the pilots gave TOO MUCH and we are not going to give any more.

We are now fully prepared to close down this airline. We will not give another penny to those managers and CEO's who make millions on the backs of hard working dedicated pilots who gave well beyond what should have been expected.

[whiteguy]

Maybe not the 40% you claim but we gave up just as much as everyone else. Funny how that number gets bigger the closer we get to negots.

The ramp gave up stat holidays, vacation, shift premiums, pay, boot allowance, paid lunches, overtime pay...

Flight attendants don't get paid for reccurrent training either..

If your so hard done by and don't like it leave, I did!

Don't sit and pretend that the pilots group were the saviors of the airline. This is a time when the employee group needs to stand together. Everyone gave up many things to help this airline.

If you didn't give up 40%, how can you say you gave up as much as me?

I never said the pilots were the saviours of the airline. I said the pilots gave TOO MUCH and we are not going to give any more.

We are now fully prepared to close down this airline. We will not give another penny to those managers and CEO's who make millions on the backs of hard working dedicated pilots who gave well beyond what should have been expected.

Because I don't believe 40% was given up by the pilots. Every union gave up roughly the same percentage!!! What % is the difference in wages?

[Lost in Saigon]

OK, so you are calling me a liar. Very nice.

Here are the payscales from today and also from 2003.

In addition to these pay reductions, we gave up all the usual items you did like Vacation, Stats, etc.

We also gave up 14 year payscales(now stop at 12 years), a negotiated 5% increase, paid training days, full credit deadhead, and numerous other items which for most pilots add up to about 40%.

[whiteguy]

OK, so you are calling me a liar. Very nice.

Here are the payscales from today and also from 2003.

In addition to these pay reductions, we gave up all the usual items you did like Vacation, Stats, etc.

We also gave up 14 year payscales(now stop at 12 years), a negotiated 5% increase, paid training days, full credit deadhead, and numerous other items which for most pilots add up to about 40%.

Nope, I never once called you liar. Thanks for posting the info. Have a nice day!

[FICU]

Wow... pilots making 6 figures and they want the company to give them $200/year for shoes. How much of that $200 goes into your jeans because I'm sure you don't spend $200 on shoes every year. Personally, with a 6 figure salary, I'm more than happy to buy my own shoes at less than $200 and they usually last a few years at least.

How many other monetary perks are in your CBA that give you free money for doing nothing?

[tailgunner]

A rampie can be replaced with a new hire after a 3 day course.
A gate agent can be replaced in 7 days
A flight attendant requires a 10 day training program
A dispatcher is a licenced position
An engineer is a licenced position
A pilot is a licenced position
Air Canada is paying way too much to the three groups that can most easily be replaced.

[MUSKEG]

Lets see if I got this straight. You want to fly the big stuff but can only hold that airplane in Toronto. You however want to live in Vancouver so you can access your sailboat. mmmmmmmm. Ok but you want the days that you travel back and forth to count as work days (full credit) or is that not what it means? If thats the case then I would have a quick solution, move your sorry arse to the base you hold and then a day off is a day off and a day worked a day worked. One month ago I was told from a very realiable source that AC would be in bankruptcy by july 09. I was laughed at by several on this forum when I mentioned it. Who's laughing now. AC will never ever compete in a truly level playing field. If I have the travel thing wrong by all means enlighten me. I know several who live in the west and commute to TO. That should be on your own time. Sorry.

[whiteguy]

A rampie can be replaced with a new hire after a 3 day course.
A gate agent can be replaced in 7 days
A flight attendant requires a 10 day training program
A dispatcher is a licenced position
An engineer is a licenced position
A pilot is a licenced position
Air Canada is paying way too much to the three groups that can most easily be replaced.

Well then so is WJ!

[lawndart]

Lets see if I got this straight. You want to fly the big stuff but can only hold that airplane in Toronto. You however want to live in Vancouver so you can access your sailboat. mmmmmmmm. Ok but you want the days that you travel back and forth to count as work days (full credit) or is that not what it means? If thats the case then I would have a quick solution, move your sorry arse to the base you hold and then a day off is a day off and a day worked a day worked. One month ago I was told from a very realiable source that AC would be in bankruptcy by july 09. I was laughed at by several on this forum when I mentioned it. Who's laughing now. AC will never ever compete in a truly level playing field. If I have the travel thing wrong by all means enlighten me. I know several who live in the west and commute to TO. That should be on your own time. Sorry.

That's called commuting. It happens on your day off. Deadheading is when your work day involves a flight from pt A to B with you riding in the back. For example deadheading from Toronto to Calgary (a 4 hour flight) to operate from Calgary to Vancouver to Edmonton. The Toronto to Calgary portion is only paid as 50% of the time spent flying. Relief pilots deadheading from Toronto to Europe overnight (just under 8 hours) are paid for 4 hours.

I believe at Westjet it is paid at 0%, but feel free to correct me if I am wrong.

[Lost in Saigon]

Lets see if I got this straight. You want to fly the big stuff but can only hold that airplane in Toronto. You however want to live in Vancouver so you can access your sailboat. mmmmmmmm. Ok but you want the days that you travel back and forth to count as work days (full credit) or is that not what it means? If thats the case then I would have a quick solution, move your sorry arse to the base you hold and then a day off is a day off and a day worked a day worked. One month ago I was told from a very realiable source that AC would be in bankruptcy by july 09. I was laughed at by several on this forum when I mentioned it. Who's laughing now. AC will never ever compete in a truly level playing field. If I have the travel thing wrong by all means enlighten me. I know several who live in the west and commute to TO. That should be on your own time. Sorry.

It is on your own time. Commuting from your home to your base is at your own cost, on your own time.

Deadheading is when the company wants to position you somewhere on your regular work day. For some unknown reason, some people think that just because you fly for a living, you should not get paid properly if the company needs to fly on company business to some other city.

Can you think of any other job where your boss can say "Hey we need you to fly to South America tomorrow. And by the way, we are only going to pay you half what you normally would make".

[MUSKEG]

Ok I stand corrected. If it's work related I'm with you, did that often enough, only driving..................... and then got bitched at for submitting a fuel bill, nothing ever asked for tires, oil change, wear and tear, etc etc. 800 to 1000kms round trip. Who said life was fair, ask most aviation bosses, they will tell you it isn't.

[C-FABH]

A rampie can be replaced with a new hire after a 3 day course.
A gate agent can be replaced in 7 days
A flight attendant requires a 10 day training program
A dispatcher is a licenced position
An engineer is a licenced position
A pilot is a licenced position
Air Canada is paying way too much to the three groups that can most easily be replaced.

Couldn't Air Canada just change contractors to an organization other than ACGHS? I'm sure Swissport could do it cheaper.

It's not even like AC owns ACGHS anymore.... correct me if I'm wrong.

Also, for what it's worth.... the GHS rampie training is six weeks.