Pilots contract

[LeadingEdge]

You know the problem with you guys, is you keep telling yourself how valuable you are, and how your "experience" is so important. But the reality is; for an employer, you are statistically a medical nightmare. Before you go on to tell me about how you still hold a Cat 1, there are all kinds of potentially career ending medical conditions that a Cat 1 does not test for. The rate of GDIP access at Jazz says it all, and you can bet that the Co has this data. It has nothing to do with age, and everything to do with controlling costs.

How many businesses do you see hiring 60+ individuals full time, next to nil. You can jump up and down all you want, but it is the reality of the situation. Travel around the world and look at the low cost crews, and they are all young, keen, and seemingly experienced enough. I don't see Jetstar pounding them in. There comes a point in the "experience" game where you are doing the same thing over and over again...

You may want to consult some professional financial advice regarding returning. It could seriously affect your pension if, and I say IF, another CCAA happened.

Lastly, your willingness to go work for a lowcost and subsidize it with your pension, speaks volumes about why the profession is in the state it is. And this is another big reason, why I said that the young newby is far better off working tax free somewhere else...

[LeadingEdge]

Leading Edge

acpa needs to get control of this situation. acpa, needs all the pilots, under the same contract.

I agree with you here. but the threat posed by a retired pilot is non existent, and for them to claim that it is, is really stretching it. Maybe ACPA should negotiate that all 60+ go to lowco. how about that idea? As I thought, you probably don't like it, but its ok to force the junior guy there. The last TA was about raping the next generation to pay for the very top to get their golden handshake, until that is gone, it will not pass.

[CANAM]

Mark my words - Air Canada pilots will have nothing to do with the LCC. Management will use a third party airline's certificate and then codeshare it back for ticketing. I can't see any way a contract can protect work and dictate another airline's existance via a codeshare. In essence, it will be a totally separate company.

[TheStig]

Everyone on this thread seems to be forgetting that ACPA has done as good of job with scope language within its Collective Agreements as any airline. Air Canada cannot simply startup another airline with non-ACPA pilots, not that they have indicated any desire to do so. All that has been stated is Air Canada faces many of the same challenges as AMR within the industry and we should be collectively looking for ways forward to prosper together.

I sincerely hope that any young pilots reading this thread do not give a second thought to the contents of this topic as; Air Canada's management, the Flypast60 group, and current Air Canada Pilots would simply shake their heads and plant their face in their palms at some of the assertions made on this forum.

[Ah_yeah]

Stig, that is likely the best post on this thread. Some further thoughts:

1) The current make-up of the AC shareholders are large institutional investors. Many with close ties to the penthouse in YUL. There is no money in airlines as long term investors so their only focus is a short term payday. If you don't believe just look how the company is managed. There is no long term vision in any department. Kill the pension, shares climb. Bust the unions (LCC), shares climb. This is the day to day focus at the executive level. CCAA will kill the current shareholder's investment so they are in no rush to step on their on weiners despite Calin's clever use of AA as a threat. Remember, AC has no assets to carve out like the Milton era. I will admit that a catastrophe like SARS or another tragedy like 911 will kill many airlines, AC included, but you don't negotiate for such events.

2) The LCC gamble on CR's part bears a pretty hefty risk. If he pushes ACPA into industrial action by starting one in contravention of the scope clauses he risks his entire operation for one that is only intended to break unions. I defy any one to prove there is any significant money in tours to Cayo Coco or Athens. Have another haul on the crack pipe if you believe the line about Sunwing/Transat eat AC's lunch. It isn't AC's lunch to have in the first place an Calin knows it. Even if you take part in that market, the pilot cost component is chump change. So should he gamble it all or come to the table to work with ACPA to bring down the legacy costs of unskilled labor of a potential LCC brand ?
Before you say Lisa will kill a strike, think outside the box. Most AC pilots likely already are.

3) Age 60 may go against ACPA or it may not. I don't think ACPA is the real issue anyway. The legal system may agree 100% with banning mandatory retirement and FP60 may still come away empty handed based on The Harper regime being in AC's corner. These things can happen in pseudo dictatorships. Despite tests for BFOR, AC has always been used as an instrument of gov't policy. I wouldn't count on the perceived benefit to the pension plan of pilots working longer as being in AC's analysis. The current management have no long term plans to honour their pension obligations so I doubt it's a factor.

4) To summarize 1-3, follow the money trail. It will lead us to the answers.

[LeadingEdge]

I sincerely hope that any young pilots reading this thread do not give a second thought to the contents of this topic as even Air Canada's management, the Flypast60 group, and current Air Canada would simply shake their heads and plant their face in their palms at some of the assertions made on this forum.

I guess they should ignore the tax free salary, the free living accommodations, the interest free car loans, the provident fund (that will be there for you), the sub 5 year upgrade path...

5-10 years of the pay group is just so much better, oh wait, you can go make 50% less at LCC - what a bonus.

[TheStig]

I guess they should ignore the tax free salary, the free living accommodations, the interest free car loans, the provident fund (that will be there for you), the sub 5 year upgrade path...

5-10 years of the pay group is just so much better, oh wait, you can go make 50% less at LCC - what a bonus.

A couple of points here:

The opportunity to fly for a middle eastern based carrier is a great one for pilots who wish to venture down the Expat road, never said is wasn't, although the stability of a pilot's career within Canada versus overseas is debatable. It's not very difficult for those perks you've mentioned to be removed with a keystroke in the ME. Although the volume of aircraft ordered and current ambitions are incredible!

A career at Air Canada isn't and shouldn't be placed on the same pedestal as it was in decades past, however, it is and will continue to be a very good flying job in Canada. There are dozens of airlines in Canada where one can have a successful and rewarding career, Air Canada is that airline for a large percentage of airline pilots. Some are happy to stay at Porter, Jazz, Canjet, and most don't want to leave Transat, WestJet, Sunwing, Cathay, First Air, Air North, Canadian North, etc. Because fundamentally it's all about finding the right fit for oneself. Just that simple.

Might want to check your facts on the PG, not quite how it works.

Once again, if you're just getting started or looking to take that next step in your career, make sure you get the true facts, talk to a pilot within which ever organization you're interested in (and others). There isn't a shortage of pilots who are happy to chat with you about your career options.

[777longhaul]

And...so goes the words from, YET another CEO at the helm:

Read this, then look at the yield required in the 2016 bonds. Guess where that is going to come from, acpa pilots, retired pilots, and the employees in general. NOT from the head shed. NOT a chance.

Everything must change,' Air Canada CEO tells staff
brent jang — TRANSPORTATION REPORTER
From Tuesday's Globe and Mail
Published Monday, Dec. 05, 2011 9:00PM EST
130 comments Email Print/License Decrease text size Increase text size Air Canada’s (AC.B-T1.08-0.02-1.82%) business model is broken and its employees must be “open to change” for the airline to stay competitive, its top executive warns in a stark internal memo that compares the carrier’s challenges to those of insolvent American Airlines Inc.

Last week, American and its parent, AMR Corp., filed for bankruptcy protection in the United States, citing the need to cut costs and reduce its debt load. In a letter to employees, Air Canada chief executive officer Calin Rovinescu said this country’s largest airline faces many similar problems.

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Is a holiday rally coming? The Chapter 11 filing by Fort Worth, Tex.-based American “is sobering news, especially for those who work in this industry,” Mr. Rovinescu said. “You cannot help but compare American’s struggles with our own.

“While we have made good progress in such areas as fleet renewal, improvements to our liquidity and balance sheet, and some areas of cost transformation, we must still achieve more on culture change and we are still not as competitive on costs as we need to be.”

In first nine months of this year, AMR lost $884-million (U.S.), compared with Air Canada’s loss of $189-million (Canadian).

Investors have been nervous about Air Canada’s prospects. The carrier’s stock price has plunged 69 per cent since the beginning of 2011, and its corporate bonds due in 2016 are yielding 14.75 per cent.

American’s Chapter 11 filing “underscores both how broken the legacy airline model is and the necessity of changing with the times,” Mr. Rovinescu wrote.

Air Canada, which emerged from bankruptcy protection in 2004, has been battling Calgary-based WestJet Airlines Ltd. in North America and Toronto-based Porter Airlines Inc. on regional routes.

As well, competitors such as Transat A.T. Inc., Sunwing Travel Group and Sunquest Vacations have been making gains in Mexico and the Caribbean at Air Canada’s expense, and there are concerns that new competitors will emerge on routes to Europe and Asia.

“We are increasingly challenged by the rise of low-cost carriers, the expansion into our markets of aggressive international airlines, strengthening of rival alliances,” Mr. Rovinescu wrote in his memo. “It is said of the European financial crisis that in order for things to stay the same, everything must change. That applies to our industry and to our company too, as the troubles at American Airlines painfully remind us today.”

Montreal-based Air Canada is in talks with its pilots over a new contract, with the launch of a discount leisure airline being one of the main topics at the bargaining table. In May, members of the Air Canada Pilots Association rejected a tentative agreement that would have cleared the way for the creation of a low-cost carrier with a reduced wage scale.

“We must be open to new ways of doing business, we must control our costs and we must work together if we are to succeed,” Mr. Rovinescu said.

PI Financial Corp. analyst Chris Murray said in an interview that Air Canada’s current plight isn’t as dire as American’s, but the Canadian carrier still has much room to improve labour relations.

In June, Air Canada sales and service agents staged a three-day strike. And last month, a federal arbitrator imposed a labour contract on the Canadian Union of Public of Employees, which represents Air Canada flight attendants.

“Air Canada is in a highly competitive business,” Mr. Murray said. “It wants to move to a lower-cost model. One of Mr. Rovinescu’s goals is to change the corporate culture, but there’s no hiding from the fact that there are issues.”

Mr. Murray noted that the airline’s pension payments are forecast to soar in 2014 because a cap on contributions previously negotiated with unions will lapse at the end of 2013. But he added that Air Canada still boasted $270-million in operating profit in the third quarter and, based on its financial statements, the carrier isn’t in danger of again filing for bankruptcy protection.

Air Canada envisages its low-cost division having 30 Airbus A319s and 20 Boeing 767s within four or five years.

“Air Canada is losing market share. Either Air Canada develops a true low-cost arm or it’s going to have its growth curtailed and sputter along,” said Rick Erickson, an aviation consultant who heads Calgary-based RP Erickson & Associates. “Mr. Rovinescu is providing a reality check. He’s saying Air Canada is uncompetitive.”
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[YYZSaabGuy]

Read this, then look at the yield required in the 2016 bonds. Guess where that is going to come from, acpa pilots, retired pilots, and the employees in general. NOT from the head shed. NOT a chance.

To clarify, the yield isn't what AC is required to pay out in cash to the bond holders - that remains fixed at the original coupon which I believe was 12%. The 14.75% yield would be achieved by an investor buying the bond at a discount, something that would not affect AC's carrying costs.

[777longhaul]

Yes....the investor would be buying it at a discount. And what a discount that will be, if....the investor even wants to handle it, without it being discounted to death.

Who knows, maybe AC stock will be worth a great deal by 2014. HA HA HA> Hellow Cerbus, oops, nothing that they can steal, everything has been sold off, to pay out milton, and crowd, so who is going to anti up?

Never ever forget that milton's pension is well, over $500,000.00 per year, and it is indexed. Think about that one plus all the others that are stealing from the airline, and its employees, because the BOD is allowing it. milton's pension, not including indexing, is more than $1400.00 per fing day! and it is indexed.

As others have said, we could all work for free, and AC would still loose money. It is a tool of the government, and all that goes with it.