Where are they now on the list?
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Flightlevels
- Rank 7
- Posts: 703
- Joined: Sun Feb 29, 2004 7:16 pm
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Brick Head
- Rank 8
- Posts: 882
- Joined: Fri Jul 22, 2005 4:37 pm
Flightlevels,
If you understand what is going on we are all concerned. Just wait, the numbers will get worse each year.
However it is not that the ACE family is not making money. Nor is that Air Canada can't make money. Every entity around Air Canada is profitable except Air Canada itself. They are making money through service agreements or a CPA with Air Canada that are above industry standard. Moreover the shareholders are making a killing.
The present structure is not about building a strong viable Air Canada. It is about, and only about, removing as much wealth as possible and giving it to shareholders( monetization). We are now paying for the fact that vulture funds are what brought us out of CCAA. They see value and they want it in cash.
For example Jazz is guaranteed to make 14% for its shareholders. If they don't (not ACE) Air Canada tops it up to that value. What airline have you ever heard of that generates 14% profit year over year, guaranteed for 10 years. Not only that, the lucrative deal that Jazz has doesn't stay in the bank. No money is saved for reinvestment in this capital intensive industry. It is all spun out to the shareholders on a tax preferred basis, because Jazz, as is Aeroplan, are income trusts.
What does ACE have planned? Who knows. One thing is clear the sucking dry of Air Canada can only go on for so long before the structure implodes. The present structure can not last. So what do they have planned for us?
Some believe that further restructuring (without CCAA) will take place to correct the problem, strategically around the renewal of everyones collective agreements in 2009. By this time ACE will be gone with all the loot and the cupboards will be dry. Neither Air Canada or Jazz will have any equity left as it is all monetized out through the two income trusts Jazz and Aeroplan. Air Canada's balance sheet will be eroding by the day. All the stakeholders (except the ACE shareholder who are long gone) will be forced to take haircuts to keep the operation out of CCAA.
Some think the strategy is to monetize the components of Air Canada through service agreements with income trusts to the point that Air Canada is insolvent again. Once back in CCAA Air Canada can hammer its own employees once again and at the same time hammer all the service agreement contracts it has with Jazz/Aeroplan/ACGHS/ACTS.
Personally I think the first scenario is the most likely. Deliberately putting the company into CCAA would be against the law. You can lie and cheat the employees all you want. Some even applaud it. But you lie and cheat shareholders or creditors and you go to jail. Toyco, Enron, Worldcom....... Conrad?
We will see. The question is how do we protect ourselves? Can we protect ourselves? Are we just along for the ride?
Flightlevels with the way this is looking pretty soon Westjet will be envying Air Canada's CASM.
Or are going to get together... somehow..... and make sure we don't get manipulated to our mutual detriment like the last go around?
Which brings me back to the original reason for my post. Air Canada will probably say absolutely no way to a combined list.
So what do we do then? Without a combined list and one union I fear the first carrot dangled by Air Canada will restart the race to the bottom and we all lose.
If you understand what is going on we are all concerned. Just wait, the numbers will get worse each year.
However it is not that the ACE family is not making money. Nor is that Air Canada can't make money. Every entity around Air Canada is profitable except Air Canada itself. They are making money through service agreements or a CPA with Air Canada that are above industry standard. Moreover the shareholders are making a killing.
The present structure is not about building a strong viable Air Canada. It is about, and only about, removing as much wealth as possible and giving it to shareholders( monetization). We are now paying for the fact that vulture funds are what brought us out of CCAA. They see value and they want it in cash.
For example Jazz is guaranteed to make 14% for its shareholders. If they don't (not ACE) Air Canada tops it up to that value. What airline have you ever heard of that generates 14% profit year over year, guaranteed for 10 years. Not only that, the lucrative deal that Jazz has doesn't stay in the bank. No money is saved for reinvestment in this capital intensive industry. It is all spun out to the shareholders on a tax preferred basis, because Jazz, as is Aeroplan, are income trusts.
What does ACE have planned? Who knows. One thing is clear the sucking dry of Air Canada can only go on for so long before the structure implodes. The present structure can not last. So what do they have planned for us?
Some believe that further restructuring (without CCAA) will take place to correct the problem, strategically around the renewal of everyones collective agreements in 2009. By this time ACE will be gone with all the loot and the cupboards will be dry. Neither Air Canada or Jazz will have any equity left as it is all monetized out through the two income trusts Jazz and Aeroplan. Air Canada's balance sheet will be eroding by the day. All the stakeholders (except the ACE shareholder who are long gone) will be forced to take haircuts to keep the operation out of CCAA.
Some think the strategy is to monetize the components of Air Canada through service agreements with income trusts to the point that Air Canada is insolvent again. Once back in CCAA Air Canada can hammer its own employees once again and at the same time hammer all the service agreement contracts it has with Jazz/Aeroplan/ACGHS/ACTS.
Personally I think the first scenario is the most likely. Deliberately putting the company into CCAA would be against the law. You can lie and cheat the employees all you want. Some even applaud it. But you lie and cheat shareholders or creditors and you go to jail. Toyco, Enron, Worldcom....... Conrad?
We will see. The question is how do we protect ourselves? Can we protect ourselves? Are we just along for the ride?
Flightlevels with the way this is looking pretty soon Westjet will be envying Air Canada's CASM.
Or are going to get together... somehow..... and make sure we don't get manipulated to our mutual detriment like the last go around?
Which brings me back to the original reason for my post. Air Canada will probably say absolutely no way to a combined list.
So what do we do then? Without a combined list and one union I fear the first carrot dangled by Air Canada will restart the race to the bottom and we all lose.
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Flightlevels
- Rank 7
- Posts: 703
- Joined: Sun Feb 29, 2004 7:16 pm
Great points, Mainline and Jazz will always be separate. It's the whipsaw bargaining chip the Mother corp enjoys. Maybe I'll be proved wrong in the upcoming talks in 2009, right now however the favour is in my theory. A new whipsaw effect is coming to jazz soon too. The Senica grads. All in all I hope that with things settling down there with the sale of assets, everyones livelyhood can go into cruise. Let's hope the bouyant economy keeps working in your favour too, certainly is doing wonderful things for us.(no pun intended)FL.
