Air Canada cuts 2000 jobs

[invertedattitude]

Very sorry to hear all of this

Best of luck to all the Air Canada folks on here...

[paokara]

V1Rotate, unless you work for Air Canada and if you don't you have no right to make those comments. Why don't you go to some of AC bases and talk to the actual employees and ask them how they like working for AC even in the good times and they will tell you.

Uncle Miltie made 43 million last year because he grew ACE's value from 2 billion to 6 billion. Let's sell a part of it since he made it worth so much and save some jobs, but no way is he going to do that.

I know alot of AC employees as being hard and dedicated and this is what they get, shit in the face.

[Disco Stu]

Endless,

I haven't been comparing AC to CX....I have merely been stating that stating we don't have a "B" scale is slightly inaccurate.

Cheers.

[Localizer]

When are you going to stop bitching about what "Uncle" Milton or Brewer are getting for bonuses and realize that either way ... they are going to get them, and that really ... in the end it means shit! Cuz you can't change it .... Even IF you continue to bitch!


Paokara ... Your statment about "right to comment" on this forum is a joke because .. "ITS A FORUM" for anyone to speak their mind you dumbass! You don't like it .... LEAVE!

So far, all I see are a bunch of "new" AC pilots bitching during the good times and now bitching during the bad ... keyword always bitching. You made it to the show .. be happy .. and quit acting like whiny little brats. If you get laid off ... its a government paid vacation till they recall you ... and they will ... but first you need to get laid off! So chill out .....

[V1RotateV2]

V1Rotate, unless you work for Air Canada and if you don't you have no right to make those comments.

Sorry buddy, but I think everybody is entitled to an opinion, sometimes you agree, sometimes you just don't. I will not go on on and on about this, let's go back to the original topic.

Let's sell a part of it since he made it worth so much and save some jobs, but no way is he going to do that.

Just how do you plan to make this work? Wouldn't it be like trying to sell a room of your house to pay some bills? Even if possible, the relief is very short lived.

Why don't you go to some of AC bases and talk to the actual employees and ask them how they like working for AC even in the good times and they will tell you.

I do, very often. Some days the plane idles for 20 minutes waiting for a guy to marshal it in, other days you just cannot see any work done in an efficient way. I know that there are guys and gals that work their butts off for AC, but the rest seem to do anything in their power to waste time, money or resources and then seem shocked when things go awry.

Some just don't care because their seniority makes them believe that the ax will always swing below them.

[Stick-Shaker]

Endless I agree with you, its not the same as a B/C. But once a PG pilot, always a PG pilot until we negotiate it outta of the "collective arguement". A reduction bid may put be back into a PG seat and push my salary back once again. In the survey WAWCON I was very clear, and I hope we can negot it out in 2009.

[Stick-Shaker]

So far, all I see are a bunch of "new" AC pilots bitching during the good times and now bitching during the bad ... keyword always bitching. You made it to the show .. be happy .. and quit acting like whiny little brats. If you get laid off ... its a government paid vacation till they recall you ... and they will ... but first you need to get laid off! So chill out .....

Are you kidding me? Getting laid off is no gov't paid vacation. The last time I was on the dole I think my best check was less than 1400$/month - tax. Many of the new hires that have made it to the "show" may have not had it so easy even up to this point, and now they are faced with more dilemma. Most new hires have great attitudes, mainly its the pilot with 12-15 years under his/her belt at AC that do the bulk of the whining.

[dark dave]

having flown as a passenger with AC hundreds of times, It comes as no surprise that this outfit is losing $$$ and is now made the choice to begin layoffs.

The rising price of fuel will be a great challenge to virually every industry and only the strong will survive.

AC has such a poor reputation with it's consumers(the service sucks big time!!!!!!!!)

AC has been a looser for a long time and many of us are suprised it's been around as long as it has.

Sorry to those that will get the axe, I know what that's like, but if you work for AC you're in bed with a crumby company and no good can come from it.

[Flaperons]

I've heard 270 pilots, 500 FAs, and the rest ground support. Not sure if it's true. I guess we'll have to wait and see.

There is some truth to the upcoming contract comment. And yes, several US carriers do have contracts up and coming up. Definitely, there is benefit for the company to weaken the pilot groups' negotiation positions with layoffs prior to contract presentation. However, while I do think this plays a role, it is not the key motivating factor here. What I find hard to swallow is that loads are high, yet the airlines seem "unable" to make profit. Nothing helps grease the merger wheels like layoffs and pending bankruptcy. Not sure if this applies to AC, but definitely a part of the play in the States.

Anyway, my condolences to any and all who fall under the axe. Shortest f*ck'n upturn ever...

[Kelowna Pilot]

This is just the beginning of a new era in aviation that is being re-defined by very high energy costs.

Airline hiring typically ebbs and flow in cycles (feast and famine, boom and bust).

But this time it's different.

With very high energy prices (which are not likely to go down but rather climb higher), the aviation industry may be in a permanent negative cycle unless some magic alternative energy source is found that is practical and viable.

[Rockie]

This is just the beginning of a new era in aviation that is being re-defined by very high energy costs.

With very high energy prices (which are not likely to go down but rather climb higher), the aviation industry may be in a permanent negative cycle unless some magic alternative energy source is found that is practical and viable.

They're out there. The only thing missing so far is the proper incentive and political will to develop them, but that could be changing too. Nothing would please me more than to see the oil industry price themselves out of existence.

[arcticbeaches]

I agree with Kelowna Pilot and V1Rotate, this isn't a conspiracy theory to shut down the unions. Airlines have to raise fares to compensate for oil prices. As a result demand decreases as companies cut back on corporate travel and tourists decide to stay home. Airlines then have to cut flights to run them at capacity to be profitable.

We may be looking at peak oil or if not certainly a situation of continually increasing oil prices due to increasing demand from Asia.

I don't expect any capacity growth again in the next decade in the airline industry so any hiring would be to compensate for retirements. A more negative outlook would be an ongoing decline in the industry and continued layoffs. Time will tell I guess.

[Kelowna Pilot]

Here's an interesting article, which mentions an interesting new book about transportation in the era of non-cheap or declining oil.

The book is called "Transport Revolutions", and the gist basically is that air travel will be totally unrecognizable in the near future (along with basically all other transportation sectors).

http://www.canada.com/vancouversun/news ... 93a258&p=1

The articles makes an interesting point:

Toronto urban planner Richard Gilbert cites a new forecast by the International Air Transport Association. It projects a $4.5 billion industry-wide net profit for 2008. But that's predicated on oil priced at $86 per barrel.

Oil was $105 per barrel last month. On that basis, IATA's projected profit becomes a 2008 loss of nearly $30 billion -- much higher than the last recorded loss, in 2002, of $11.3 billion.

The point is that all the great forecasts which we've all heard from various industry trade associations that all pointed to a great a rosy future for aviation were based on oil prices remaining constant (and relatively cheap).

Well, a key variable in the formula has now changed (oil prices), which renders basically all the forecasts useless.

[invertedattitude]

This is just the beginning of a new era in aviation that is being re-defined by very high energy costs.

Airline hiring typically ebbs and flow in cycles (feast and famine, boom and bust).

But this time it's different.

With very high energy prices (which are not likely to go down but rather climb higher), the aviation industry may be in a permanent negative cycle unless some magic alternative energy source is found that is practical and viable.

What complete bull....

If you listen to any sane industry experts instead of the fear mongering media, the oil boom will bust eventually, it will never go back down to where it was 5-6 years ago, but the world cannot and will not sustain the price of energy so high.

[privateer]

I found this interesting artical on airlines in Canada.

Air Canada jets are shown at Pearson International Airport in Toronto. Canada's dominant airline cut 2,000 jobs and slashed capacity in June 2008 in the face of soaring fuel costs. (Frank Gunn/Canadian Press)It's a tough business, trying to run a profitable scheduled airline in Canada — or anywhere else — these days. Intense competition and soaring jet fuel costs have brought down more than a few of North America’s smaller airlines and are hobbling the big players.

Those big fuel costs are just the latest headache for an industry and a travelling public that’s had a pretty rough decade. The Sept. 11, 2001, attacks changed air travel forever by bringing in a level of security screening that made air travel more difficult and more costly.

New fuel surcharges in 2008 added to an impressive list of fees and service charges that airlines have either levied themselves or passed on to their customers. Airlines’ bottom lines are being tested as never before.

The Canadian airline scene had witnessed a lot of evolution and turbulence before Sept. 11, of course. Wardair — one of the country's first discount air carriers — hung on for 37 years before it was bought out by Canadian Airlines in 1989. Wardair had been losing market share to both Air Canada and Canadian, which had the customer loyalty programs that business travellers demanded.

Canadian Airlines itself was the product of the 1987 purchase of Canadian Pacific Airlines by PWA – Pacific Western Airlines. By 1999, Canadian Airlines would be bought out by Air Canada.

Calgary-based WestJet opened for business in 1996 as a low-cost airline serving mainly Western Canada. As other airlines folded or were bought out, WestJet slowly expanded its reach until it hit the East Coast and vacation spots in the United States.

Canada 3000 shutdown strands thousands
CanJet did the same from its base in Halifax, beginning in May 2000. Within a year, it was bought out by Canada 3000 — at the time, the country's second-largest national air carrier. It, too, buckled under the pressures of a sudden and catastrophic drop-off in passenger traffic after Sept. 11 and fierce competition for a slice of a dwindling air travel pie. On Nov. 9, 2001, Canada 3000 abruptly ceased operations, leaving thousands of travellers looking for other ways to get home.

The hole left by the departure of Canada 3000 was filled less than a year later by the arrival of Jetsgo – and the return of CanJet under a new owner. Jetsgo reported sales of $2 million in its first week of operations. Both "no frills" airlines were off to promising starts.

Still, the turmoil in the skies continued as a debt-laden Air Canada filed for bankruptcy protection on April 1, 2003, after suffering a string of heavy losses. It would remain under the protection of the courts for 1½ years, emerging from its restructuring as a much leaner airline.

But the airline business requires deep pockets and, over the years, small Canadian upstarts like Greyhound Air, Roots Air and Royal Airlines all tried but failed as tough competition made it impossible to keep flying.

Jetsgo folds after fighting 'without a war chest'
The competition was brutal — and possibly no airline competed as hard as Jetsgo, which operated under the motto: "Pay a little. Fly a lot." In late 2004, the airline was selling some seats for $1.

It was a bankruptcy in the making, said airline analyst Joe D'Cruz of the Rotman School of Management.

Jetsgo's collapse in 2005 stranded thousands (Canadian Press)
"Jetsgo had been an airline in serious financial stress for quite some time, and in the middle of that they decided to take on WestJet in a price war," he told CBC News. "Here's an airline trying to fight a price war without a war chest."

On March 11, 2005, Jetsgo was gone, despite having captured up to 10 per cent of the domestic market. Thousands of passengers were stranded and 1,200 employees were suddenly out of work.

CanJet drops scheduled airline business
CanJet and WestJet stepped up to pick up some of the demand. CanJet, which resumed operations in 2002 with three old Boeing 737s flying to three destinations, had expanded its fleet to 10 aircraft and 14 North American destinations. It retained its focus on Atlantic Canada. It also began operating a small charter business.

In June 2006, CanJet celebrated its fourth birthday with a huge cake and lots of optimism for the future.

Three months later, on Sept. 5, the airline's chairman announced that CanJet was getting out of the scheduled airline business to focus on its charter operations.

"With the rising business risks of operating a scheduled airline, IMP has decided to suspend year-round scheduled airline service and focus on their increasing charter business," said Kenneth Rowe, the chairman and chief executive officer of parent company IMP Group Ltd.

The move left some people worried that Atlantic Canada would be under-serviced by the major carriers.

Harmony Airways pulls plug
In March 2007, Vancouver-based Harmony Airways announced it would stop all of its scheduled service by early April. Its billionaire owner, David Ho, called it a restructuring to focus on other opportunities. "I want to be very clear, this is not a bankruptcy. This is not a creditor protection arrangement and this is not a company dissolution."

Ho blamed increasing costs, overcapacity in the market and "aggressive price competition from larger carriers." About 350 staff lost their jobs.

Rising fuel prices wreak havoc
But the biggest threat to airlines at home and around the world came not from competition, but from fuel costs. Oil prices began to rise dramatically in 2005 and they kept rising in subsequent years to levels airline executives didn’t imagine in their worst nightmares.

By 2008, jet fuel was twice as expensive as it was in 2007. Where jet fuel at one time accounted for just 10 per cent of airline operating expenses, that had soared to more than 30 per cent by 2008.

Desperate airlines cut routes, slashed capacity, flew slower, raised fares, imposed fuel surcharges, brought in new charges for checked baggage, and rushed to replace older planes with more fuel-efficient models.

But the pressure proved too much for some. From late 2007 to mid-2008, no fewer than eight U.S. carriers either stopped flying or filed for bankruptcy protection. Delta and Northwest Airlines announced plans to merge.

In Canada, the two dominant carriers — Air Canada and WestJet — brought in hefty fuel surcharges of their own. In June 2008, Air Canada cut 2,000 jobs and cut capacity. It had lost $288 million in the first quarter of 2008. It warned that further cuts would take place if fuel prices didn’t drop.

The Canadian airline scene remains a tough place to make a buck. But despite all the turbulence, new players continue to try their luck. Toronto-based Porter Airlines launched in 2006, with scheduled flights between Toronto, Ottawa, Montreal, Halifax and Newark.

[Kelowna Pilot]

This is just the beginning of a new era in aviation that is being re-defined by very high energy costs.

Airline hiring typically ebbs and flow in cycles (feast and famine, boom and bust).

But this time it's different.

With very high energy prices (which are not likely to go down but rather climb higher), the aviation industry may be in a permanent negative cycle unless some magic alternative energy source is found that is practical and viable.

What complete bull....

If you listen to any sane industry experts instead of the fear mongering media, the oil boom will bust eventually, it will never go back down to where it was 5-6 years ago, but the world cannot and will not sustain the price of energy so high.

I used to to think it was bull, too. But the people who are suggesting that high oil prices are here to stay (and are likely going to rise substantially due to the realities that oil is getting much harder to get and more expensive to extract, not to mention rising demand from Asia), are not the loony doomsday fringe. They are respected figures and experts in their field.

The stage for a blood-bath in the aviation industry is being set. And unless a cheap alternative source of energy is discovered very quickly, well, let's just say I won't be buying airline stock anytime soon.

[V1]

Oil is going to continue to increase.. so what is air canada planning next? I don't really understand how they could of not forseen this happening and planned ahead for a time like this. I knew oil was going to hit 1.50 a year ago, it's basic economics. What are they going to do when oil hits 2.00 or 3.00? It's only going to go up.
If routes are not profitable why did AC continue to fly them all this time? Seems like bad business to me.
I am curious to know how Jazz is effected by all this?
On another note Westjet seems to be still growing, and making smart business choices, it doesn't seem like rocket science to me.
This is a great article on the future of aviation.. worth reading.
http://www.walrusmagazine.com/articles/ ... vid-beers/

[JAHinYYC]

Guys...guys...

What kills me is that Invertedattitude is like a cat that gets pissed off and hisses at the vision of itself (Kelowna Pilot) in a mirror. You guys are arguing the same point from two different perspectives.

Invertedattitude is arguing that oil prices at $140/bbl are unsustainable for the long term - which perhaps everyone agrees.

Beyond a certain level economic theory holds that people have a disincentive to pay the higher cost associated with the energy input cost (this is called demand destruction). Less people flying equals less planes in the air equals less fuel burned resulting in less fuel demand and...eventually lower prices.

On the flip side, when fuel gets cheap enough, airlines can cut fares to stimulate travel demand which will lead to more flights and in turn more consumption leading to more demand and eventually higher prices.

Kelowna Pilot's point is that this cycle is historic, cyclical and inevitable. Add to this the fact of oil's increasing scarcity means that the peaks get higher and the dips or "pull backs" in price are not as low are before. Inevitable inflation upwards.

So what is the long term answer? Christ, if I knew that I would be trading oil futures like a fiend and cleaning up during all this turmoil. But I am not.

My take? Oil at $100 plus per bbls for the next couple of years with possible spike to close to $200. We all drive less. People move away from trucks and SUVs (unless needed) and we all start thinking about how we are going to manage to get laid in the back seat of a Prius instead.

Two, possibly three legacy carriers go bankrupt in the states by X-mas (US Airways, American and Delta are my bets). Of these US Airways probably goes to full on liquidation and the other two reorganize to fly another day.

In Canada, Jazz goes back to being a turbo prop affair as the RJs burn too much juice. The AC A319/320/321 fleet gets downsized in addition to ongoing 767 attrition and likely dismissal of the A330 fleet to simplify the fleet.

Westjet puts a halt on new orders and suspends market expansion for the time being.

Then again, I could be wrong.

[Stick-Shaker]

I've heard 270 pilots, 500 FAs, and the rest ground support. Not sure if it's true. I guess we'll have to wait and see.

Word from an internal source is approx 120 pilots, which the number after all retirements are considered for 2008. Where are you geting the 270 pilots figure?

[dark dave]

everybody seems to be missing the point!!!????!!!

for any business to be competative....they must offer a certain level of customer service.

Anyone who travels regularily will, I'm sure agree, that that West Jet kicks AC butt when it comes to taking care of their customers.

Nobody is perfect but when I've flown with west jet and they screw up, they make up for it and make me feel like a valuable custumer. This is not the case with AC.

AC seams to be very disorganized and generally staffed with people more interested in making the Union bucks and benefits than in customer service. We the consumerrs notice this!

The customers understand that rising fuel costs mean higher ticket prices and fewer route and schedule options...duh!!

We just want to be treated with a little courtesy and respect.

I have had unsatisfactory service from AC so many times (lost bags, changes made to schedules and routes...etc..) I now fly ony west jet if at all possible...I prefere to drive if I cannot...I will only fly with AC if my clients or employers are footing the bill(always higher than west jet).

I seems when I speak to fellow travelers accross Canada ...people are generally unhappy with the service of AC employees. I would say it's safe to say that most only fly with AC because they have to, not because they want to.

I think it will be impossible for AC to be a viable company under these conditions.

I predict West Jet owns AC in the next 2 years and becomes a word wide carrier.

[2milefinal]

I predict West Jet owns AC in the next 2 years and becomes a word wide carrier.

Never going to happen.
That would be like an elephant and a cat trying to mate.

[dark dave]

we'll see....

companies that are bankrupt and or loose money are cheap to buy...

companies that make money, listen to their consumers and shareholders, well...they make $$$ and atract investment....

there are lots of people and or companies that would love to get their hands on AC routes and assets minus the dead weight of the majority of employees(unions)

I don't think its that much of a stretch...

West Jet has proven to their shareholders they know how to manage an airline, throw in some asian capital to the tune of 40-50% of the AC purchase price...I think there's a deal there...

West Jet wins...investers win....consumers win....AC employees that can survive on their own merrits win...dead weight is exposed and cut!

[SierraPoppa]

we'll see....

companies that are bankrupt and or loose money are cheap to buy...

companies that make money, listen to their consumers and shareholders, well...they make $$$ and atract investment....

there are lots of people and or companies that would love to get their hands on AC routes and assets minus the dead weight of the majority of employees(unions)

I don't think its that much of a stretch...

West Jet has proven to their shareholders they know how to manage an airline, throw in some asian capital to the tune of 40-50% of the AC purchase price...I think there's a deal there...

West Jet wins...investers win....consumers win....AC employees that can survive on their own merrits win...dead weight is exposed and cut!

Can I have some of whatever it is you're smoking?

[JAHinYYC]

everybody seems to be missing the point!!!????!!!

for any business to be competative....they must offer a certain level of customer service.

companies that make money, listen to their consumers and shareholders, well...they make $$$ and atract investment....

What about Canadian Chartered Banks?

(When was the last time that you felt warm and cuddly asking for a loan? As far as I know and DESPITE hugh losses in the subprime debt fiasco, banks are still going to post profit this year AND make thier shareholders quite happy.)

I think you are overlooking the monopoly factor (duopoly factor) in the market place.

In Canada it is basically the red team or the teal team. Attempts to differentiate based on service work...to a very limited extent. Price still remains the main distinguishing factor. If it was otherwise - WJ would never match fares with AC on competative routes since their service offering would be perceived to be better value.

Besides, I must be the only person in Canada who finds the jokes and toilet paper races a little...hokey for my tastes.

At least a 50 yr old battleaxe (though increasingly some young french hottie) from AC won't speak to me incessantly over the PA telling me their 'ma's favorite dirty joke about the white horse that fell into a mud puddle.

(I will duck now and await the rotting fruit which will be thrown my way.)

[JAHinYYC]

West Jet has proven to their shareholders they know how to manage an airline, throw in some asian capital to the tune of 40-50% of the AC purchase price...I think there's a deal there...

While you are pondering your new career as an investment banker, please take a peek at the federal legislation which prohibits foreign ownership of a Canadian airline to exceed 25% (http://findarticles.com/p/articles/mi_m ... i_n5996257).

Your asian investors will need to find somewhere else to park their yuan or yen.