May 1 startup day Air Georgian

[Fanblade]

And no offense here but Jazz pilots are the last to talk smack about taking jobs away. Remember Thomas Cook? Funny how not a single Jazz pilot said no to taking over the jobs of Sky Service and then going ahead and working for one of the most ridiculous heavy wages in Canada ($155 an hour).

More revisionist history from you and Fanblade about Thomas Cook contract.

That work did not in fact go to the lowest bidder. And the fate of Skyservice was sealed. Go read the bankruptcy filings. It is all a matter of public record.

Rudder,

Revisionist? My comments were meant to say one thing and one thing only. Contracts come and go. There is no permanency to them. They are less stable jobs. When the contract comes up for tender it is won on a competitive basis. This competitive tenduring process is designed to drive down costs. We can't win this battle. 75 seats and below is gone.

- As a pilot group we have lost 75 seats and below to this competitive tenduring process.

- As a pilot group we want to stop the damage of competitive tendure at 75 seats. No going beyond.

- As a pilot group we need to find a fair and orderly way out of the 75 seats CPA market for pilots who want to do so.

A regional flow through list. Every AC regional pilot on it. Orderly flow through to mainline for those who want it. Movement for pilots within the list to other CPA providers on a seniority basis for those that want that. Set min pay and working conditions.

If we don't do something Q jumping on a massive scale will result. There will be winners and losers.

[Fanblade]

Jazz is in a tough spot no doubt. We have been put there by none other than Air Canada.

A couple of facts:
Jazz was created by Air Canada.
Jazz WAS 100% owned by Air Canada.
Jazz was "monetized" by Air Canada just like some of it's other assets to help to keep them afloat.

Jazz is now an independent company held by Chorus Aviation with it's own set of shareholders and it's own board of directors AND with only one customer - Air Canada - a customer that has been on shaky financial ground for years.

Attempts by the Chorus board to fulfill their fiduciary duty and diversify the Jazz business in a meaningful way - for example Thomas Cook Canada - apparently draws the ire of customer number one, Air Canada.
The situation has obviously been made that much more difficult for Jazz by the contracting away part of the core business to Air Georgian.

And you wonder why we are a little bit "ticked" by it all???
Rock and a hard place???

RXL,

I don't think anyone with any sense of “fair” would disagree.

But GNN or SKV pilots are not the problem. They are the symptom. The competitive tenure process is the illness. It is designed to drive down wages.

Inverted2,

Of course this was planned. Why do you think AC chose a CPA relationship with Chorus? Competitive tenure is what drove down wages in the US. The formula works and over time it will become more and more effective here.

The illness is competitive tenure and No one is going to achieve a cure for 75 seats and below now that it has been released.

AC has a delay in retirements at the moment due to people staying past 60. The positions are not gone, just delayed. Trade for those positions.

[rudder]

A regional flow through list. Every AC regional pilot on it. Orderly flow through to mainline for those who want it. Movement for pilots within the list to other CPA providers on a seniority basis for those that want that. Set min pay and working conditions.

If we don't do something Q jumping on a massive scale will result. There will be winners and losers.

As far as the AC family is concerned, I do not disagree with the objective but may differ on the solution.

This issue has sat in front of the affected pilots for 28 years now and not one ounce of progress has been made to resolve it. There have been small movements and aborted initiatives but nothing substantial that will survive the test of time. I have not seen much evidence that is going to change any time soon. That would require both leadership and resolve from the pilot groups.

[Legacy]

Jazz is in a tough spot no doubt. We have been put there by none other than Air Canada.

A couple of facts:
Jazz was created by Air Canada.
Jazz WAS 100% owned by Air Canada.
Jazz was "monetized" by Air Canada just like some of it's other assets to help to keep them afloat.

Jazz is now an independent company held by Chorus Aviation with it's own set of shareholders and it's own board of directors AND with only one customer - Air Canada - a customer that has been on shaky financial ground for years.

Attempts by the Chorus board to fulfill their fiduciary duty and diversify the Jazz business in a meaningful way - for example Thomas Cook Canada - apparently draws the ire of customer number one, Air Canada.
The situation has obviously been made that much more difficult for Jazz by the contracting away part of the core business to Air Georgian.

And you wonder why we are a little bit "ticked" by it all???
Rock and a hard place???

RXL,

I don't think anyone with any sense of “fair” would disagree.

But GNN or SKV pilots are not the problem. They are the symptom. The competitive tenure process is the illness. It is designed to drive down wages.

Inverted2,

Of course this was planned. Why do you think AC chose a CPA relationship with Chorus? Competitive tenure is what drove down wages in the US. The formula works and over time it will become more and more effective here.

The illness is competitive tenure and No one is going to achieve a cure for 75 seats and below now that it has been released.

AC has a delay in retirements at the moment due to people staying past 60. The positions are not gone, just delayed. Trade for those positions.

You are right. But you have to alleviate the symptoms while curing the illness. So how do we do that?

[justwork]

Jazz is in a tough spot no doubt. We have been put there by none other than Air Canada.

A couple of facts:
Jazz was created by Air Canada.
Jazz WAS 100% owned by Air Canada.
Jazz was "monetized" by Air Canada just like some of it's other assets to help to keep them afloat.

Jazz is now an independent company held by Chorus Aviation with it's own set of shareholders and it's own board of directors AND with only one customer - Air Canada - a customer that has been on shaky financial ground for years.

Attempts by the Chorus board to fulfill their fiduciary duty and diversify the Jazz business in a meaningful way - for example Thomas Cook Canada - apparently draws the ire of customer number one, Air Canada.
The situation has obviously been made that much more difficult for Jazz by the contracting away part of the core business to Air Georgian.

And you wonder why we are a little bit "ticked" by it all???
Rock and a hard place???

RXL,

I don't think anyone with any sense of “fair” would disagree.

But GNN or SKV pilots are not the problem. They are the symptom. The competitive tenure process is the illness. It is designed to drive down wages.

Inverted2,

Of course this was planned. Why do you think AC chose a CPA relationship with Chorus? Competitive tenure is what drove down wages in the US. The formula works and over time it will become more and more effective here.

The illness is competitive tenure and No one is going to achieve a cure for 75 seats and below now that it has been released.

AC has a delay in retirements at the moment due to people staying past 60. The positions are not gone, just delayed. Trade for those positions.

You are right. But you have to alleviate the symptoms while curing the illness. So how do we do that?

College or national union.

[timel]

College or national union

Excluding all disputes like GGN vs JAZZ ...
How do you legally create a national union?
How could that gather all the pilots? Any country has ever made that?

[Captain Kangaroo]

College or national union

Excluding all disputes like GGN vs JAZZ ...
How do you legally create a national union?
How could that gather all the pilots? Any country has ever made that?

I don't know how or if it could be done, but I agree with Justwork. A National Union is the only way I can see that we could reverse the downward spiral.

[leftoftrack]

Any country has ever made that?

U.S.S.R / Cuba / China.

[Fanblade]

Jazz is in a tough spot no doubt. We have been put there by none other than Air Canada.

A couple of facts:
Jazz was created by Air Canada.
Jazz WAS 100% owned by Air Canada.
Jazz was "monetized" by Air Canada just like some of it's other assets to help to keep them afloat.

Jazz is now an independent company held by Chorus Aviation with it's own set of shareholders and it's own board of directors AND with only one customer - Air Canada - a customer that has been on shaky financial ground for years.

Attempts by the Chorus board to fulfill their fiduciary duty and diversify the Jazz business in a meaningful way - for example Thomas Cook Canada - apparently draws the ire of customer number one, Air Canada.
The situation has obviously been made that much more difficult for Jazz by the contracting away part of the core business to Air Georgian.

And you wonder why we are a little bit "ticked" by it all???
Rock and a hard place???

RXL,

I don't think anyone with any sense of “fair” would disagree.

But GNN or SKV pilots are not the problem. They are the symptom. The competitive tenure process is the illness. It is designed to drive down wages.

Inverted2,

Of course this was planned. Why do you think AC chose a CPA relationship with Chorus? Competitive tenure is what drove down wages in the US. The formula works and over time it will become more and more effective here.

The illness is competitive tenure and No one is going to achieve a cure for 75 seats and below now that it has been released.

AC has a delay in retirements at the moment due to people staying past 60. The positions are not gone, just delayed. Trade for those positions.

You are right. But you have to alleviate the symptoms while curing the illness. So how do we do that?

Legacy,

The illness is not curable. Once ACPA gave Air Canada the ability to contract out to multiple CPA providers the illness was sealed. We will never get this back from Air Canada. The ability to diversify regional feed through competitive tender is a core Business objective for Air Canada. Cost competitive regional feed to WJ, AA, DL, UA. Some would even argue that we shouldn't even try to stop competitive tender because it would leave AC at a competitive disadvantage to virtually all their competition.

I think it is important to understand why this happened. Simply put, because every pilot group around AC lost scope protection in recent years. Some through CH11. The Delta pilots traded $$$ for increased regional feed. WJ approved a encore and so on. The norm around us is now 76 seats in 90 seat jets and flown for about 80k. FA's at minimum wage. AC naturally wants an even competitive playing field. As a single pilot group we are powerless to stop this slide.

The lesson here? Don't be the first mover beyond the status quo. The first mover will trigger another slide.

As for treating symptoms, I listed my ideas above. An orderly progression through the regional ranks. A single regional seniority list. The ability to move between regionals with your YOS. Flow through to mainline. A minimum wage and working standard at the regionals.

With the exception of Jazz, which has leverage with AC for the time being, the regionals can not fix this on their own. To accomplish this we would need both the WJPA and ACPA working in unison with their respective employer. It has to be BOTH in unison. Neither corp will agree to being put at a disadvantage to the other. Even this has a flaw. It's called transboarder.

If we do nothing? It will be a free for all. Everyone out for themselves. Junior bailing first. Inverted career progression.

My expectations based on what I see so far? The latter. I don't say that based on what is taking place at the regionals. I say that because of what is not taking place with ACPA, WJPA, DL, AA, UA. It's not on the radar anywhere.

[DHC-1 Jockey]

Don't buy into the negative hype from the Jazz guys. GGN had an OK start, they started on time on a reduced schedule but compared to Sky with the Q's that was pretty impressive. Within one week they were operating a full schedule and within a month they have hit the same OTP as Jazz with a 99+% completion.

Better check your stats, Avpride.

[Fanblade]

DHC-1,

You might have just proven his point. We know their start was horrendous. To end the month with a 66% monthly average? Not too shabby. June will be a little better indication. A year out and one would expect consistency.

No matter how much you want to trash talk GGN and SKV, they will slowly get better and better within their operation.

The GGN pilots are not the enemy nor are the companies they work for. The enemy is competitive tender. They may like it now. Give it 5 years to a decade and see how they like it when a new upstart starts nipping at their heals making 60k. We are not going to get rid of competitive tender. What we can do is minimize its impact on pilots.

[Canoehead]

DHC-1,

You might have just proven his point. We know their start was horrendous. To end the month with a 66% monthly average? Not too shabby. June will be a little better indication. A year out and one would expect consistency.

If that 66% includes the already existing, long-time B1900 operation, then it's certainly is 'shabby'.

[Fanblade]

A regional flow through list. Every AC regional pilot on it. Orderly flow through to mainline for those who want it. Movement for pilots within the list to other CPA providers on a seniority basis for those that want that. Set min pay and working conditions.

If we don't do something Q jumping on a massive scale will result. There will be winners and losers.

As far as the AC family is concerned, I do not disagree with the objective but may differ on the solution.

This issue has sat in front of the affected pilots for 28 years now and not one ounce of progress has been made to resolve it. There have been small movements and aborted initiatives but nothing substantial that will survive the test of time. I have not seen much evidence that is going to change any time soon. That would require both leadership and resolve from the pilot groups.

Rudder,

You seem to be going for the long ball. A few base hits can be just as productive.

How about you negotiate with AC a deal similar to the AMR deal offered to Eagle with some exceptions.

- create an AC express seniority list based on DOH.
- All AC hiring comes exclusively from the AC Express list offered without restriction based on DOH
- place Jazz pilots on the list
- all express pilots can move between all express positions based on DOH.
- set a min WAWCON

Offer other express pilot groups to join but they must meet and agree to the above conditions.

This would restore order. Avpride won't probably like it. But if he doesn't accept it? No AC flow through.

Get a clause in the ACPA contract.

Allow Chorus to expand into a holding company with multiple CPA providers on condition they use express pilots. They can get their saving elsewhere than pilots.

AC gets savings now as they suck up Jazz pilots when hiring starts up again. Jazz pilots who want to move to AC get preference. Express pilots that want to stay in the regional system are grandfathered. Ability to follow work adds stability.

[Calin Robandfistyou]

How about you negotiate with AC a deal similar to the AMR deal offered to Eagle with some exceptions.

- create an AC express seniority list based on DOH.
- All AC hiring comes exclusively from the AC Express list offered without restriction based on DOH
- place Jazz pilots on the list
- all express pilots can move between all express positions based on DOH.
- set a min WAWCON

Offer other express pilot groups to join but they must meet and agree to the above conditions.

This would restore order. Avpride won't probably like it. But if he doesn't accept it? No AC flow through.

Get a clause in the ACPA contract.

Allow Chorus to expand into a holding company with multiple CPA providers on condition they use express pilots. They can get their saving elsewhere than pilots.

AC gets savings now as they suck up Jazz pilots when hiring starts up again. Jazz pilots who want to move to AC get preference. Express pilots that want to stay in the regional system are grandfathered. Ability to follow work adds stability.

+1
just add one more thought to that: Take min 3 years of service pay with you to Air Canada so as to not have to "pay your dues" again.

[rudder]

Rudder,

You seem to be going for the long ball. A few base hits can be just as productive.

How about you negotiate with AC a deal similar to the AMR deal offered to Eagle with some exceptions.

- create an AC express seniority list based on DOH.
- All AC hiring comes exclusively from the AC Express list offered without restriction based on DOH
- place Jazz pilots on the list
- all express pilots can move between all express positions based on DOH.
- set a min WAWCON

Offer other express pilot groups to join but they must meet and agree to the above conditions.

This would restore order. Avpride won't probably like it. But if he doesn't accept it? No AC flow through.

Get a clause in the ACPA contract.

Allow Chorus to expand into a holding company with multiple CPA providers on condition they use express pilots. They can get their saving elsewhere than pilots.

AC gets savings now as they suck up Jazz pilots when hiring starts up again. Jazz pilots who want to move to AC get preference. Express pilots that want to stay in the regional system are grandfathered. Ability to follow work adds stability.

What you are proposing is not new. As a matter of fact, it represents a repeat of history.

During the 90's Air Ontario allowed the other AC regionals unrestricted access to the AON seniority list with full credit for seniority, vacation, and pay purposes (i.e. portable seniority).

In 1997 the 4 AC regionals bargained as a single committee and with identical proposals despite being certified and operated separately. They have since become one company.

There were several iterations of flowthrough implemented unilaterally by the AC pilots under CALPA and ACPA between the mid 90's and mid 2000's. These arrangements no longer exist.

It is time for something new and sustainable, not just the flavour of the month. Anybody who desires a career at AC is free to apply. The notion of substituting a flow opportunity for substandard compensation is abhorrent to the profession and should not be proliferated. The fact that WJ has jumped on this bandwagon is just one more reason to make sure that the concept is eradicated. The Envoy pilots were offered shiny new jets under grossly unacceptable terms. They said no. Good for them.

Things will not get better until every pilot recognizes that it is necessary to focus on improvements where they are rather than viewing it as simply an internship.

[Splash]

DHC-1,

You might have just proven his point. We know their start was horrendous. To end the month with a 66% monthly average? Not too shabby. June will be a little better indication. A year out and one would expect consistency.

If that 66% includes the already existing, long-time B1900 operation, then it's certainly is 'shabby'.

Too many flights not to include the B1900's. A bit surprising considering the amount of padding in the B1900 block times. Many of the B1900 pilots I've spoken with are just putting in time and can't leave fast enough. It would seem the main problem is with very poor management starting at the top,never mind the wages,working conditions and drafting. Some of the stories are disturbing.

[Fanblade]

Things will not get better until every pilot recognizes that it is necessary to focus on improvements where they are rather than viewing it as simply an internship.

Rudder,

Competitive tender has turned all CPA jobs with AC into an internship. They are all temporary. Any benefits one group manages will be whipped out by another who undercuts. To make gains will threaten survival. To not match lower wages and more productive working conditions will threaten survival.

It is simply a matter of time before CR catches Chorus in a deleverages Position. It might be 2 years from now. It might be in 2020. But one thing is for certain. Chorus will eventually be forced to compete or fail. This means match the substandard wages or fail.

Do you want the Jazz pilots to have a way out? I agree that trading wages for advancement is abhorrent. But it's too late. You have been sold out with the introduction of competitive tender. Those lower wages are coming regardless. You might as well get something.

I don't want to see a Comair/Eagle solution for Jazz. I don't like what was offered to Eagle anymore than the next guy, but I think it was a HUGE mistake not to accept it considering the alternative. There are Comair pilots who have never re entered the profession. Captains starting over again at expressjet as FO's doesn't put food on the table.

Those who want to work at AC are free to apply? Nice comment. I m pretty sure that isn't so easy for someone with a lot of time in at Jazz. They need a bridge.

[tdp19]

Don't buy into the negative hype from the Jazz guys. GGN had an OK start, they started on time on a reduced schedule but compared to Sky with the Q's that was pretty impressive. Within one week they were operating a full schedule and within a month they have hit the same OTP as Jazz with a 99+% completion.

Better check your stats, Avpride.

A buddy from GGN told me that when they call there times into STOC, they say off the gate on Sched regardless of how late they are pushing off the gate. Its happened to me numerous times now where a GGN RJ gets cancelled or delayed, and instead of leaving the PAX for the next direct flight, they put them on Jazz to connect through other destinations like CLE, BWI, PIT, ATL. This in turn causes mass delays and ruins our on time performance. It's Fraustrating.

[rudder]

Rudder,

Competitive tender has turned all CPA jobs with AC into an internship. They are all temporary. Any benefits one group manages will be whipped out by another who undercuts. To make gains will threaten survival. To not match lower wages and more productive working conditions will threaten survival.

It is simply a matter of time before CR catches Chorus in a deleverages Position. It might be 2 years from now. It might be in 2020. But one thing is for certain. Chorus will eventually be forced to compete or fail. This means match the substandard wages or fail.

Do you want the Jazz pilots to have a way out? I agree that trading wages for advancement is abhorrent. But it's too late. You have been sold out with the introduction of competitive tender. Those lower wages are coming regardless. You might as well get something.

I don't agree with your assessment of the circumstances that the AC CPA pilots find themselves in.

The fact of the matter is that Jazz has been replaced by an alternative service provider ('tender' as you call it) to the tune of just 5 aircraft (vs a CPA fleet of 123 aircraft). That was a well documented boondoggle which is still ongoing. Would love to see the CV's listing the experience level of those pilots.

ROUGE would never have gotten off the ground at any meaningful rate if not for the transfer of available mainline pilots (eliminating the mainline 175 jobs certainly came at a fortuitous time for ROUGE).

ENCORE is still having enormous (self inflicted) problems finding DEC's.

Do you see a theme here? This is NOT America. There is not a perceived endless supply of qualified pilot labour, particularly at the entry level. AC is not replacing CPA frequencies with mainline metal (and crews).

So, facing the reality that he who has immediate access and control of a supply of pilot labour is king and can therefore expand without logistical impediments in securing qualified pilots one should simply ask - who given the opportunity is best positioned in Canada to expand?

No, it is not over for the AC CPA pilots simply because there is nobody to bid for the work that could actually staff it. And if the newest AC CPA pilots on the periphery could recognize that simple truth then the initiative to stabilize the WAWCON could begin in earnest.

And if you really wanted a home run rather than settling for a bunt, then get all of the airline pilots in Canada back under the same representational tent once again and start to speak with one voice.

Flowthrough is a distraction, not a solution.

[avpride]

DHC-1,

You might have just proven his point. We know their start was horrendous. To end the month with a 66% monthly average? Not too shabby. June will be a little better indication. A year out and one would expect consistency.

If that 66% includes the already existing, long-time B1900 operation, then it's certainly is 'shabby'.

Too many flights not to include the B1900's. A bit surprising considering the amount of padding in the B1900 block times. Many of the B1900 pilots I've spoken with are just putting in time and can't leave fast enough. It would seem the main problem is with very poor management starting at the top,never mind the wages,working conditions and drafting. Some of the stories are disturbing.

Guys, listen we know you must try and make yourselves feel better but things at GGN are fine. performance is OK not great June was almost back to normal! first two weeks of May were tough? Most of the other BS on this site is just that.

Lot of GGN bashing on here from Jazz guys. That is what is disturbing.

[avpride]

Rudder,

Competitive tender has turned all CPA jobs with AC into an internship. They are all temporary. Any benefits one group manages will be whipped out by another who undercuts. To make gains will threaten survival. To not match lower wages and more productive working conditions will threaten survival.

It is simply a matter of time before CR catches Chorus in a deleverages Position. It might be 2 years from now. It might be in 2020. But one thing is for certain. Chorus will eventually be forced to compete or fail. This means match the substandard wages or fail.

Do you want the Jazz pilots to have a way out? I agree that trading wages for advancement is abhorrent. But it's too late. You have been sold out with the introduction of competitive tender. Those lower wages are coming regardless. You might as well get something.

I don't agree with your assessment of the circumstances that the AC CPA pilots find themselves in.

The fact of the matter is that Jazz has been replaced by an alternative service provider ('tender' as you call it) to the tune of just 5 aircraft (vs a CPA fleet of 123 aircraft). That was a well documented boondoggle which is still ongoing. Would love to see the CV's listing the experience level of those pilots.

ROUGE would never have gotten off the ground at any meaningful rate if not for the transfer of available mainline pilots (eliminating the mainline 175 jobs certainly came at a fortuitous time for ROUGE).

ENCORE is still having enormous (self inflicted) problems finding DEC's.

Do you see a theme here? This is NOT America. There is not a perceived endless supply of qualified pilot labour, particularly at the entry level. AC is not replacing CPA frequencies with mainline metal (and crews).

So, facing the reality that he who has immediate access and control of a supply of pilot labour is king and can therefore expand without logistical impediments in securing qualified pilots one should simply ask - who given the opportunity is best positioned in Canada to expand?

No, it is not over for the AC CPA pilots simply because there is nobody to bid for the work that could actually staff it. And if the newest AC CPA pilots on the periphery could recognize that simple truth then the initiative to stabilize the WAWCON could begin in earnest.

And if you really wanted a home run rather than settling for a bunt, then get all of the airline pilots in Canada back under the same representational tent once again and start to speak with one voice.

Flowthrough is a distraction, not a solution.

People. This is 2014. Why do you think diversification started in 2012 not in 2020?

[AirMail]

Chorus will eventually be forced to compete or fail. This means match the substandard wages or fail.

I like how people think that in order to be competitive means lower wages for the pilots. Costs saving can be trimmed from management, operational efficiencies, expand business model. Does Chorus hedge fuel? Instead of cutting our wages, all these airlines should be demanding the removal of the excessive taxation on the industry. Limit speculators powers to influence the price of crude. Some examples but a great deal can be done for a bigger bang of the buck than to trim our wages in a race to the bottom.

[DH772]

It is time for something new and sustainable, not just the flavour of the month. Anybody who desires a career at AC is free to apply. The notion of substituting a flow opportunity for substandard compensation is abhorrent to the profession and should not be proliferated. The fact that WJ has jumped on this bandwagon is just one more reason to make sure that the concept is eradicated. The Envoy pilots were offered shiny new jets under grossly unacceptable terms. They said no. Good for them.

Things will not get better until every pilot recognizes that it is necessary to focus on improvements where they are rather than viewing it as simply an internship.

Rudder,

I don't see how one list for the regional is ''that'' bad? Is it because Jazz would be taking 2 steps back before they can move forward 1?

How is that better than losing flying up to 2020. After that getting forced a contract that say loses 30% more flying (given to another regional) over a 5 year period, taking us to 2025 having 30% less work force within 10 years in order to maintain your current contract? Would it not be better to have 1 list, which may have major draw backs now but security for the future?

Or do you just recommend that same solution from 20 years ago? A merge with AC? because that would benefit Jazz and Jazz alone. Is this the solution you speak of? It's not a ''new" solution as you mentioned so it can't be this one either.

What do you recommend is a better sustainable solution?

What happens if in 10 years (not to be a pessimist), Jazz has lost 25% of its junior workers in order to maintain its current contract while Encore made 100% flow and grew their contract on par with porter/jazz?

[rudder]

Rudder,

I don't see how one list for the regional is ''that'' bad? Is it because Jazz would be taking 2 steps back before they can move forward 1?

How is that better than losing flying up to 2020. After that getting forced a contract that say loses 30% more flying (given to another regional) over a 5 year period, taking us to 2025 having 30% less work force within 10 years in order to maintain your current contract? Would it not be better to have 1 list, which may have major draw backs now but security for the future?

Or do you just recommend that same solution from 20 years ago? A merge with AC? because that would benefit Jazz and Jazz alone. Is this the solution you speak of? It's not a ''new" solution as you mentioned so it can't be this one either.

What do you recommend is a better sustainable solution?

What happens if in 10 years (not to be a pessimist), Jazz has lost 25% of its junior workers in order to maintain its current contract while Encore made 100% flow and grew their contract on par with porter/jazz?

Jazz is getting smaller, that is a given. But not for the reasons that you think.

The market is changing. Lower gauge/high frequency is evolving to higher gauge/low frequency. When the dust settles there will be no monopoly routes left in Canada.

50 seat jets are uneconomical. It doesn't matter who flies them. Have you seen the price of jet fuel?

What is happening at GGN and SKY is for a purpose which surprisingly is not necessarily a wholesale transfer of work away from Jazz. There is another shoe yet to drop. Probably sooner rather than later.

In the meantime, if there are pilots that take pride in working for below market rates there is nothing that Jazz or ALPA or ACPA can do about it.

[rudder]

Walter Spracklin - RBC Capital Markets

Addressing the issues – concerns overdone

Negative sentiment based on cost competitiveness

Dealing with legacy issues, including an aging fleet and high labour costs, Chorus Aviation
cost per available seat mile (CASM) are running at 25 cents. This is at least 30% higher than
what we estimate CASM is running at WestJet’s Encore, their new regional low cost
subsidiary. This puts Air Canada at a disadvantage on regional routes where the two compete
head-to-head. Accordingly, Air Canada is aggressively looking at lowering its regional
operating costs; including shifting routes away from Chorus Aviation to lower cost regional
operators including Sky Regional and Air Georgian. No question, the high cost base and
subsequent cost reduction moves by Air Canada, have caused headwinds and elevated
investor concern over the longer-term viability of the CPA contract with Air Canada as it
stands today.


Higher fleet costs largely an Air Canada problem

Chorus Aviation is running a multi-aircraft type fleet, consisting of older Bombardier CRJ
regional jets, Dash-8 turboprops, and the newer Q400 turboprops. This provides Air Canada
with route right-sizing flexibility as the aircraft that Chorus operates ranges in the 36 to 78-
seat capacity. The trade-off is higher costs per seat mile as compared to WestJet’s Encore,
which flies exclusively new Q400 turboprops (78-seats). Chorus Aviation has been working
with Air Canada in renewing its fleet and has recently brought on 21 new Q400 turboprops.
The key here is that the 42 CRJ aircraft are operating leases through Air Canada. As such, the
CRJ aircraft and the higher cost associated with them, would be incurred by no matter which
regional operator runs them. As such, we see Chorus Aviation’s higher fleet costs as largely
an Air Canada issue, in which Chorus continues to upgrade its fleet by working with Air
Canada through the CPA contract.


Getting a handle on higher labour costs

The main cost differential between Chorus Aviation and regional competitors, really boils
down at the union level. We agree that the labour cost base at CHR is higher than what could
be achieved by an alternative regional partner; but the key is that CHR is actively addressing
this issue. Key factors to consider are as follows:

1. CHR has plenty of time to achieve a lower labour cost base (7 years until the existing
CPA contract expires on December 2020);
2. CHR has recently shown significant promise (which AC has recognized) in achieving a
ground breaking labour agreement with its airport workforce;
3. A voluntary severance program has been well received and is continuing;
4. The union membership is aware of the cost issue and we believe will support cost
reduction moves in exchange for a longer term contract and advancement
opportunities.


Mark-up rate escalators keeps CHR whole

With Air Canada shifting US transborder routes away from CHR to other regional partners,
we believe there is a misconception as to the worst-case value of the current CPA. We note
that should Air Canada not provide a minimum level of billable block hours, then there are
rate escalators that essentially keeps CHR whole. What this means is that a run-rate level of
EBITDA at ~$170MM is what we see as the worst-case scenario under the current CPA, which
provides for more than enough cash to fund the current $0.45 annualized dividend.


High service levels not easy to replicate

Air Canada cannot assume that a new partner with a new (non-unionized and less
experienced pilot base) will have as good an operating capability and service track record
that CHR has delivered - consistently the number one on-time service provider in Canada
(Exhibit 5). We believe this is a key consideration that is currently being overlooked. Not only
the level of service; however, with 122 covered aircraft flying to over 53 destinations, Chorus
has the largest regional scope out of any carrier in Canada. Both the scope and level of
service will be tough to replicate should Air Canada chose not to renew the CPA contract
with CHR in 2020, in our view.


Summary

New CPA framework the more likely scenario

While costs are a key concern for Air Canada under the CPA contract, management at Chorus
is actively looking to reduce them through a newer more efficient fleet to offering severance
for older employees. No question, with the high service levels Chorus provides Air Canada,
we expect a new CPA framework will be developed and that any new agreement will be
mutually beneficial to both airlines. As such, we see a new CPA framework (rather than a
wind-up of the CPA) as the more likely scenario


Solidifying a long-term relationship

While the relationship has at times been contentious, we see both Air Canada and Chorus
moving forward with their relationship in a positive framework. No question, Chorus
provides Air Canada outstanding service and flexibility; however, management is fully aware
of the competitive pressures in the industry and remains hard at work at lowering unit costs.
While we see value in the CPA contract even if it were to be wound up, we believe that the
higher probability (and higher value), is with Air Canada and Chorus engaging in a more
constructive manner, set to solidify the long-term relationship and derive additional value for
both respective airlines. We see this achieved with a renegotiated contract where the term is
extended at a lower rate – but essential to this is where the cost reductions implemented by
CHR are shared between both airlines.