Encouraged by Cal??

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tonysoprano
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Encouraged by Cal??

Post by tonysoprano »

I must say, with some caution, that so far Cal's vision is very encouraging if you read his letters on the Aeronet. I know, he still has to prove himself but so far I am encouraged by his plans. Sounds like shrienking is not in his plans. Also great to see both the Boston Bruins and Anaheim Ducks, amongst other teams, sign up for another season with us next year.
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Localizer
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Re: Encouraged by Cal??

Post by Localizer »

Even though you put a little bit of sugar in the coffee it can still end up tasting bitter .....

:|
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tripleseven
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Re: Encouraged by Cal??

Post by tripleseven »

tonysoprano wrote:I must say, with some caution, that so far Cal's vision is very encouraging if you read his letters on the Aeronet. I know, he still has to prove himself but so far I am encouraged by his plans. Sounds like shrienking is not in his plans. Also great to see both the Boston Bruins and Anaheim Ducks, amongst other teams, sign up for another season with us next year.
Agreed. I would not be surprised if another one or two teams sign up.
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kilocharliemike
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Re: Encouraged by Cal??

Post by kilocharliemike »

tonysoprano wrote:I must say, with some caution, that so far Cal's vision is very encouraging if you read his letters on the Aeronet. I know, he still has to prove himself but so far I am encouraged by his plans.
He paid an surprise visit to the STOC center in YUL last Sunday. Saying pretty much what he said on that aeronet statement. Have to say not at all what I expected, I wasnt in the company last time, but it seemed like he was trying to shake the hatchet man image. Anyway he went around and asked everyone what they do and introduced himself. 4 years and Ive never seen Montie up here, so I am on the fence with this one.
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PilotFlying
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Re: Encouraged by Cal??

Post by PilotFlying »

I agree; so far the guy seems pretty reasonable.

8)
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Brick Head
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Re: Encouraged by Cal??

Post by Brick Head »

Guys

Remember CR is here to save AC for ACE's benefit and only ACE's benefit. Goal? Create value in ACE's 75% stake of AC. ACE gets zip if AC files for CCAA. No value in that. You don't create value by shrinking because CASM goes up. You have no choice but to instead drive (CASM) costs down. That is done only two ways. Slash the price tag the airline pays for services and contracts. Or expand. Spread fixed costs over more seats. The best example of this would be WJ right now. The more they expand the more their CASM drops. But shrinking? Nope.

Considering the position ACE has left AC in, maybe it is a good thing they didn't quite unload AC yet. Montie's revenue model didn't hold up in this decapitalized company pushed head long into the credit crisis, oil spike, recession and bad hedging.

CR is a very focused individual here to save AC from it's recent past and resent restructuring. The restructuring that locked AC into above industry standard contracts with former entities in an effort to "monetize" AC assets and extract maximum shareholder value. (Read here, give former assets lucrative contract so that their sale price would be higher.)

He is a restructuring guru. The architect of the hiving out of ACE/AC/JAZZ/ACTS/AEROPLAN/ACGHS. The architect of the contracts now between the separate entities that no one seems to completely comprehend but most agree are above industry standard. ( I really think this is why he was chosen over other qualified individuals despite his past with AC employees.) His first job will have nothing likely to do with conflict with AC employees.

Getting AC's finances restructured and in order. Include in that pushing hard for pension rule changes with the government that do not need employee consent ( Read here why he appointed Duncan Dee the former Liberal lobbiest as his second.). The next job will be dealing with service providers that AC has above standard contracts with. Then employees in contract negotiations.

CR will be no problem to deal with until someone says no to something he wants. No problem though, he will work to find a cliff to hang you off, but not for long, just until you see it his way.

:shock:
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whiteguy
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Re: Encouraged by Cal??

Post by whiteguy »

kilocharliemike wrote:
tonysoprano wrote:I must say, with some caution, that so far Cal's vision is very encouraging if you read his letters on the Aeronet. I know, he still has to prove himself but so far I am encouraged by his plans.
He paid an surprise visit to the STOC center in YUL last Sunday. Saying pretty much what he said on that aeronet statement. Have to say not at all what I expected, I wasnt in the company last time, but it seemed like he was trying to shake the hatchet man image. Anyway he went around and asked everyone what they do and introduced himself. 4 years and Ive never seen Montie up here, so I am on the fence with this one.
Hopefully he visits YYC Stoc and see's whats really going on, lack of manpower, flights waiting to be parked, no groomers...
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Dockjock
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Re: Encouraged by Cal??

Post by Dockjock »

ACE has already lost in the market what it would lose in CCAA. The equity is near worthless.
When you've got nothing, you've got nothing to lose- Bob Dylan 8)
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tonysoprano
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Re: Encouraged by Cal??

Post by tonysoprano »

Great, now I can't get that song outta my head. How Does it feeeel???
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Brick Head
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Re: Encouraged by Cal??

Post by Brick Head »

Dockjock wrote:ACE has already lost in the market what it would lose in CCAA. The equity is near worthless.
When you've got nothing, you've got nothing to lose- Bob Dylan 8)
I would say worse than that. ACE is trading below its current cash on hand.

It can be dangerous when dealing with someone who has nothing to loose. That will be his card to play.

Explaining to everyone, what he plans on doing with their respective agreement, if their refusal to play ball forces CCAA on AC.

The flip side though is the demands can not be so unpalatable that CCAA looks more or equally attractive.

IOW trying to squash a supplier won't work. As some analysts (Dr. Death) have suggested about Jazz.
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Machiavelli
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Re: Encouraged by Cal??

Post by Machiavelli »

Brickhead,

I have a different take on what Cal has planned and would like to know what you think.

What's ACE's stake in Air Canada's shares worth? $65,000,000 (75% of 100,000,000 shares @ $0.84)? It's peanuts, chump change. Better to write it off and get billions in labour and contract concessions (Jazz, etc). Next, issue new Air Canada stock and/or sell 49% of the new Air Canada to somebody, say Lufthansa. Then ACE can wind itself up for maximum "unlocking of value".

This is entirely my opinion as an outsider, but I believe that the "double hammer" method is coming to Air Canada labour. You get nailed once before CCAA to "save jobs", then again in CCAA to "save pensions".

Beware of Romanians baring gifts.

All entirely speculative, arm-chair quarterback guesswork possibly wrought with flaws. Please feel free to correct.
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Brick Head
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Re: Encouraged by Cal??

Post by Brick Head »

Machiavelli wrote:Brickhead,

I have a different take on what Cal has planned and would like to know what you think.

What's ACE's stake in Air Canada's shares worth? $65,000,000 (75% of 100,000,000 shares @ $0.84)? It's peanuts, chump change. Better to write it off and get billions in labour and contract concessions (Jazz, etc). Next, issue new Air Canada stock and/or sell 49% of the new Air Canada to somebody, say Lufthansa. Then ACE can wind itself up for maximum "unlocking of value".
Yes a CCAA filing could, and likely would extract large concessions from labor and service providers. It would also be the easiest way to do so. The problem for ACE is that if AC files for CCAA the shareholders get wiped out. ACE would no longer own anything. Bye bye to eventually selling AC. Bye bye to the current, albeit low, value they presently hold.

If ACE wants to eventually "unlock value" in AC then CCAA is not an option for them. Giving into CCAA essentially means ACE has given up on ever extracting anything from their ownership in AC including the current 65million their 75% is worth.

So option one is unlikely CCAA. If they don't pull it off though? Your remarks are likely spot on as option 2.

I'm drinking to option 1. :D

Happy easter
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Machiavelli
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Re: Encouraged by Cal??

Post by Machiavelli »

Indeed.

Complex situation and I hope that you're right.
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tripleseven
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Re: Encouraged by Cal??

Post by tripleseven »

whiteguy wrote:
kilocharliemike wrote:
tonysoprano wrote:I must say, with some caution, that so far Cal's vision is very encouraging if you read his letters on the Aeronet. I know, he still has to prove himself but so far I am encouraged by his plans.
He paid an surprise visit to the STOC center in YUL last Sunday. Saying pretty much what he said on that aeronet statement. Have to say not at all what I expected, I wasnt in the company last time, but it seemed like he was trying to shake the hatchet man image. Anyway he went around and asked everyone what they do and introduced himself. 4 years and Ive never seen Montie up here, so I am on the fence with this one.
Hopefully he visits YYC Stoc and see's whats really going on, lack of manpower, flights waiting to be parked, no groomers...
Tell him to look in the coffee room.
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aroundthewing
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Re: Encouraged by Cal??

Post by aroundthewing »

tripleseven wrote:
Tell him to look in the coffee room.
Bullsh*t!
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moreccsplease
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Re: Encouraged by Cal??

Post by moreccsplease »

So let me get this straight? Everyone is blaming the CPA with Jazz for the problems here... haha. The 35 million dollars that Jazz extracted in the 4th quarter from AC (and AC is the 12 billion dollar operation)... when Jazz flies over 300,000 flights a year, yep... JAZZ is this problem!

So even if Jazz made no profit at all... what would have AC lost in 2009 other than the 1 Billion they did? Just slightly under 1 Billion?!
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Al707
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Re: Encouraged by Cal??

Post by Al707 »

Actually they made 134.8 million on 1.636 billion of revenue (year ended 2008).... paid for by AC!

An 8.2% profit margin paid for by US!

or 8.38 cents X 122865144 units X 12 months of the year!!!

Get you facts straight b4 spouting off about sh*t you don't understand!

Yes JAZZ is part of the problem, not the whole problem but part of the problem! Why are we making unit holders wealthy?

Cuz they needed to "maximize shareholder value"!
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Al707
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Re: Encouraged by Cal??

Post by Al707 »

PS.

AC casm = 17.9c
Jazz casm = 26.76c

50% higher!

Why? Margins built into the CPA to flog units to make ACE $$$$!!
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moreccsplease
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Re: Encouraged by Cal??

Post by moreccsplease »

Duh, CASM is higher, because we do many short legs. A little different route structure pal!
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rudder
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Re: Encouraged by Cal??

Post by rudder »

Al707 wrote:PS.

AC casm = 17.9c
Jazz casm = 26.76c

50% higher!

Why? Margins built into the CPA to flog units to make ACE $$$$!!
Your problem isn't Jazz CASM, its WJ CASM :lol:
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Re: Encouraged by Cal??

Post by Jaques Strappe »

It would be very difficult to convince me that the company would not be in financial trouble again in a few years, even if every single employee at Air Canada were to work for free. If management spent a fraction of their time actually running and managing for a long term successful airline as they did scrounging under seat covers for loose change to " unlock shareholder value " then perhaps things would not be so bad.

But when none of the employees have the tools nor the manpower to do their jobs properly, then it does not matter how much you cut off the bottom line. The product does not get delivered.

Calin does not know how to run an airline, he never has. He is nothing more than a " get rich quick " type of investment manager. Everyone knows you don't get rich quick in aviation yet they continue to line up at the Air Canada trough and pick it clean. Not since Hollis Harris has anyone been here to actually run an airline properly.

Sorry but I really don't think they have any interest in actually running an airline long term. ACE and West Capital simply want their return and they want it now. The only equity left is in the employee pension fund. So it is not difficult to see why he is here. Calin always smiles for the camera and may pretend to be nice but he is no way, "the savior" not for you and me or 40,000 other people anyway.
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squawk 7600
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Re: Encouraged by Cal??

Post by squawk 7600 »

Air Canada is still being run like it is a Crown corporation. Back in the day, the company was given a bunch of money, and since that day, management has never really learned how to run an airline. Inject cash, then instead of investing in the company to make it run better, they strip it clean. AC management has never had vision, and has never been able to empower it's employee group. Until the management slate is wiped clean, the company will continue to falter. Have they not been paying attention lately to a certain "competitor", and how that competitor manages to run a successful airline?

...and furthermore, Air Canada pilots have got to stop whining about Jazz and start worrying more about real problems....namely WestJet!
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rudder
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Re: Encouraged by Cal??

Post by rudder »

Jaques Strappe wrote: The only equity left is in the employee pension fund.
Pension funds are not equity, at least not in the traditional sense. The funds are single-purpose, sheltered, and cannot be borrowed against. In the AC world the pension is a liability. Currently, it is the liability which will send AC back to CCAA and ensure that current AC shareholders (ACE/Cerberus et al) will be wiped out.

Calin is not here to 'unlock value'. He is here to manage liabilities in an attempt to improve cash flow and float the AC share price. Whether the interests of ACE and the AC employees can be aligned remains to be seen.
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Brick Head
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Re: Encouraged by Cal??

Post by Brick Head »

rudder wrote:
Jaques Strappe wrote: The only equity left is in the employee pension fund.
Pension funds are not equity, at least not in the traditional sense. The funds are single-purpose, sheltered, and cannot be borrowed against. In the AC world the pension is a liability. Currently, it is the liability which will send AC back to CCAA and ensure that current AC shareholders (ACE/Cerberus et al) will be wiped out.

Calin is not here to 'unlock value'. He is here to manage liabilities in an attempt to improve cash flow and float the AC share price. Whether the interests of ACE and the AC employees can be aligned remains to be seen.
Well put. Save one point IMO. AC may not need to talk to the unions about pension.

Duncan Dee is a lobbyist. If AC and the group of seven get everything they want employee consent will not be required. Those changes if permanent will drastically reduce the pension deficit. If we see a typical up tick in the stock markets post recession we may even see it virtually disappear. The merits of those changes are for another thread. It is not good for pension security but I digress.

However back to the subject. What do you think the chances the gov't will refuse pension change if failure is imminent and can be prevented through pension regulation changes?

The unions do not want the changes being sought by the corporation granted on a permanent basis. I doubt we will have much say in the matter quite honestly.

Anyway. Pension deficit down= value up. Or put another way. Dump pension liability onto the employees backs in a pension windup=stock price up.
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Brick Head
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Re: Encouraged by Cal??

Post by Brick Head »

Jaques Strappe wrote:
Sorry but I really don't think they have any interest in actually running an airline long term. ACE and West Capital simply want their return and they want it now. The only equity left is in the employee pension fund. So it is not difficult to see why he is here. Calin always smiles for the camera and may pretend to be nice but he is no way, "the savior" not for you and me or 40,000 other people anyway.
Jaques,

Your instinct is correct. CR is here for the flip. He won't be here long. Yes pension is one of the targets. The target isn't the funds though. The target is changing the way deficits are calculated.

Goal? Drastically reduce the deficit without putting in a dime.

No more deficit equals increasing AC's value.

The draw back for employees? In a pension windup the new rules, as suggested by the group of seven, would leave no where near the funds needed to pay pensioners what they were promised. IOW's the suggested changes dump the risk and liability onto the employees.
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