AC Mgmt Eyes Offshore Airline

[Jimmy_Hoffa]

http://business.financialpost.com/2012/ ... ine-union/



The union representing Air Canada’s pilots is alleging the airline is exploring the possibility of launching its proposed low-cost carrier offshore, circumventing negotiations to launch it with its employees.

Capt. Gary Tarves, chairman of the Air Canada Pilots Association master executive council, said this week in a memo to the airline’s pilots that the union has received information in recent weeks suggesting Air Canada plans to launch an offshore subsidiary modelled on the international Jetstar subsidiaries launched by Australia’s Qantas Airways Ltd.

“Put bluntly, the company wants to outsource much of our current flying while failing to provide any assurances as to how many Air Canada pilot jobs would actually remain at the mainline when the dust settles,” he said in the memo. “Some might dismiss this threat as just a trial balloon floated as a negotiating tactic. That would be naïve on our part.”

He did not elaborate on the source of the information.

Air Canada would not comment on the allegations. “We do not comment on rumours and speculation,” said Priscille Leblanc, Air Canada spokeswoman, in an email.

But Calin Rovinescu, Air Canada chief executive, has repeatedly pointed to the Jetstar model as a successful example of the sort of low-cost subsidiary he is hoping to launch at Air Canada.

He has also said, however, that he believes the low-cost carrier (LCC) is pivotal to Air Canada’s sustainability and would prefer to negotiate its launch with the airline’s employees, including its pilots.

Air Canada aims to use a fleet of up to 50 A319s and Boeing 767s at the subsidiary LCC, with which it said it hopes to serve the leisure markets down south and to Europe.

The pilots’ union, which is currently in contract talks with management, said it has twice asked for a formal response to detailed claims about the formation of an offshore LCC.

“The company refused to provide any details other than to state that it is exploring options that do not include Air Canada pilots,” Capt. Tarves said in the memo to pilots.



In recent years, Qantas has set up a series of offshore, low-cost airlines under the Jetstar brand, including Jetstar Asia Airways in Singapore, Jetstar Pacific Airlines in Vietnam and the recently announced Jetstar Japan, which is being launched in partnership with Japan Airlines Co. and Mitsubishi Corp. and is expected to take to the sky later this year.

The offshore airlines are not wholly controlled subsidiaries. Rather, Qantas only owns up to 49% of its various offshore Jetstar subsidiaries.

Daniel Tsang, founder and chief analyst at Hong Kongbased Aspire Aviation, said the Qantas models have been successful, in part, by leveraging cheaper local workers.

“Setting offshore bases is also a cost issue, since it cannot afford to have a high cost base by using Qantas mainline pilots yet selling low airfares,” he said.

Other carriers are also adopting the model, including AirAsia, Singapore Airlines, and All Nippon Airways, he said.

But these subsidiaries, and the elimination of jobs in Australia for their offshore counterparts, have come up against stiff opposition from Qantas’s workforce.

The announcement of plans to launch two more subsidiaries last year led to a series of job actions that resulted in Qantas grounding its entire fleet for two days last October until the government intervened.

Capt. Tarves pointed to several concessions the airline’s management has been seeking in its labour talks that might support efforts to launch an offshore subsidiary.

These efforts are ways to get around the so-called “scoping clauses” in the pilots’ contract that prevent the airline from outsourcing certain types of flying.

The airline is looking at contracting out Air Canada’s pilots’ flying for Air Canada Cargo, Air Canada Vacations, and Aeroplan, and “a potentially massive reduction in transborder and overseas flying,” Capt. Tarves said in the memo to pilots.

He said he has requested a meeting with Mr. Rovinescu to discuss that.

“We requested this meeting late last week and are still awaiting confirmation of time and location,” Capt. Tarves said.

Air Canada’s pilots rejected a tentative agreement with the airline last May, in part due to the proposed pact’s support for the company’s plans to launch a new subsidiary LCC using Air Canada pilots at lower wages and benefits.

 

 

[vic777]

Maybe ACPA will agree to it if AC lets them off on their share of the FlyPast60 settlement. And if the ACPA Elite can Fly the triple at the standard rate.

[yycflyguy]

Lame negotiating tactic used to create fear and uncertainty. Nobody is buying what is being sold. AC is attempting to solicit a response from ACPA so they can run to the government. There will be more of this BS in the coming weeks. There is no possible way to have an offshore with trained, qualified crews ready to go on short notice.

[yycflyguy]

Maybe ACPA will agree to it if AC lets them off on their share of the FlyPast60 settlement. And if the ACPA Elite can Fly the triple at the standard rate.

Keep on topic man. There are dozens of threads in the AC section where the flypast60s can spew their rhetoric. Not everything has to do with your narrow vision.

[CanadianEh]

If the scope clause changes to allow regional flying to carry up to 120 pax, then I guess the embraers would potential go to one of the regionals?

[yycflyguy]

Nice try to stir the pot. Scope protection isn't going anywhere and neither are the Embraers.

[CanadianEh]

Nice try to stir the pot. Scope protection isn't going anywhere and neither are the Embraers.

Let's hope so.

It will be interesting to see how things play out. So far it doesn't look good though, you guys are trying to beat them at their own game with a Conservative majority in power. There goes to your right to strike and opportunity for a fair contract IMO.

[vic777]

Keep on topic man. .... Not everything has to do with your narrow vision.

Of Course you missed my point. I'll keep it simple. Here's the question. To what degree will ACPA's vulnerability re: the settlements and court costs influence their ability to negotiate effectively with AC?

[Sea2Sky]

Agree with YYC... leave the f*&k*n FP60 crap out of this. You've hijacked enough threads. Start your own. You really don't know when you're not welcome somewhere, do you?!

[the original tony]

There's a possibility most of our company is going to be gone. The main concern is the greed of die on the deck group. Just like the farce it was when it started. As long as I'm covered @#$! the rest. Sheer class. Don't worry. All the juniors wil continue to pay. If there is anything left, You will get the settlement you deserve.
I'm severely disgusted with the stupidity of these pilots.

Tony.
Former EMJ FO.

[CL-Skadoo!]

Yet I still watch my colleagues climb all over each other to take a $60,000 pay cut for Air Canada's golden ticket. They'll pay hundreds of dollars in interview prep, but I haven't seen anyone ask the free question "If I get hired right now, what's my future going to look like?". It would make me pretty cautious going into these interviews.

[FADEC]

CR is not your Friend. He has a plan, and ACPA is distracted. You cannot shrink your way to success. Spinning off bits and pieces of a Company results in fewer workers and less revenue to support obligations such as Pensions and Benefits.

Look at GM; they kept shrinking till they couldn't afford their Medical and Pension Plans. Then they go to the Employees and say; things have to change; you must accept these cuts.

CR is not being original; this sort of thing has been going on for years in Western Business which is too focused on the short term. Make a Profit this week, and pay yourself a bonus.

ACPA needs to think differently. They are concentrating on the Checklist while not seeing the ground rushing up. The FP60 thing has been a poorly handled distraction.

Do not accept outsourcing of flying; that only shrinks the Company and eventually your job is at risk.

Find a way to bring all the flying into Air Canada; make the Business Case that the Board can see. Hollis Harris and Gary Deane brought the RJ into the Mainline; it can work.

Otherwise, we may do a Swissair; go out of business as the Mainline and the Connector becomes the new "Swiss". Mainline Pilots lose and CR will be laughing as he contemplates his Bonus!

[rudder]

Hollis Harris and Gary Deane brought the RJ into the Mainline; it can work.

And you think that was a good idea? No wonder the place is struggling.

[teacher]

Find a way to bring all the flying into Air Canada; make the Business Case that the Board can see. Hollis Harris and Gary Deane brought the RJ into the Mainline; it can work.

...........and the regionals could easily fly 777s, what's your point. It's the structure of the company not the aircraft you're flying that is killing AC.

To be fair too, those RJs belonged to Air Nova and Air BC was in the process of researching 737s. AC stepped in, bought them all, screwed them up and here we are.

[FADEC]

The RJ got AC into all kinds of markets that were too small for the larger equipment. As well, frequency builds traffic. If you provide 100 seats once a day, you will get less business than if you provide 50 seats twice a day.

Depending on feed from other carriers is not reliable, unless you go the Capacity Purchase Agreement as with Jazz, and that is expensive. Your "captive" carrier might even start competing with you in certain ways.

AC has fumbled things such as the Toronto Island operation; huge potential, and no effort to capitalise on it. Mr Deluce stepped in, completely excluded AC from that venue for years, and now limits AC and other carriers in a lucrative market. He knew how to promote the service and got the right aircraft.

As long as other companies fly aircraft with the Maple Leaf; AC mainline pilots are at a disadvantage. AC needs feed from all markets, and AC Pilots need to be in those cockpits.

The Company can be structured to make that work. We need leadership at all levels, not those who are only comfortable with the way things have always been.

TCA started with ten seat aircraft and grew to be tenth in the world; an airline noted for excellence in many areas. Where do we go from here?

[CanadianEh]

They are not interested in negotiating, they are interested in bullying and taking from the employee groups by any means necessary.

400+ Canadians out of a job today here in London because a company that makes billions in profit a year wanted workers to take a 50% paycut. They were never even interested in negotiating in the first place. This has got to stop and we will get no help from the federal govt

[DrBoeing]

They are not interested in negotiating, they are interested in bullying and taking from the employee groups by any means necessary.

400+ Canadians out of a job today here in London because a company that makes billions in profit a year wanted workers to take a 50% paycut. They were never even interested in negotiating in the first place. This has got to stop and we will get no help from the federal govt

So what is the answer??????
I would suggest that we defy back to work legislation. It is not as if there is 3000 transport rated multi endorsed pilots or AME's sitting at home looking for work. What would AC do??? They would be up the creek and the FEDS would be too busy scraping their jaws off the floor.

[teacher]

The same reason the pilots at Jazz didn't strike when threatened with back to work legislation. The workers and union are levied fines. It gets expensive and it's illegal. It's a tough position to be in no doubt. An extreme case of work to rule is almost better as it keep the operation going "legally" but slows things down to the point that it might as well be shut down.

[anonymity]

With all due respect Teacher, that's not why Jazz Pilots didn't strike. This information is from someone in the room, which gave me better perspective into why things are going the way they are.
When the minister threatened us with BTWL, we(Jazz ALPA) were assured by the NDP, that none of them would return from summer vacation to pass legislation. Essentially we won, enter Calin to the discussion.
Calin told our negotiating committee that, I'm paraphrasing here, we won the battle, however if we do go on strike and he has to enact his contingency plan, he will reduce us to the lowest block hours the CPA will allow and we WILL be laying off a couple hundred pilots.
Calin Rovinescu is a shrewd business man as evidenced by the current events at AC and our own shop(passes). The reason Sky Regional exist is because we almost went on strike and has nothing to do with ACPAs hate for everything Jazz, other than the fact CR used that to get permission from them.
I think we need our own operation orange, this race to the bottom has to stop, outsourcing is no longer just for manufacturing and call centres...

[teacher]

I agree that I took a simplistic view and explanation however I was attempting to answer in as short a post as possible without trailing off as to why striking against BTWL will do more harm to the pilot group than good. I know it was a lot more complicated than what I mentioned

[vic777]

The workers and union are levied fines. It gets expensive and it's illegal. It's a tough position to be in no doubt.

It's not a tough position at all. You just down tools. As part of the settlement we make the Government agree that there will be no fines or reprisals. All it take is balls.

[MackTheKnife]

As part of the settlement we make the Government agree that there will be no fines or reprisals. All it take is balls.

Takes a lot more than balls. What it takes are leaders who are prepared to go to jail and a membership thats willing to back them up when push comes to shove. Neither of which exists in ACPA.

Bend over girls and boys. ---- It's gonna hurt bad this time

[vic777]

Takes a lot more than balls. What it takes are leaders who are prepared to go to jail and a membership thats willing to back them up when push comes to shove. Neither of which exists in ACPA.

That's fine, then Forty Grand per year is more than we deserve. The Airline Pilot is the most skilled and highly trained of all the groups involved (Management, Government). If we can be bamboozled so easily we are already getting more than we deserve. Err ah, I guess that's what the UNION leader already said.

[DrBoeing]

As part of the settlement we make the Government agree that there will be no fines or reprisals. All it take is balls.

Takes a lot more than balls. What it takes are leaders who are prepared to go to jail and a membership thats willing to back them up when push comes to shove. Neither of which exists in ACPA.

Bend over girls and boys. ---- It's gonna hurt bad this time

So make a choice, take the highly unlikely fine or live with a crap contract once again!
I say refuse!

[unregistered]

The Airline Pilot is the most skilled and highly trained of all the groups involved (Management, Government).

That's the funniest thing I've heard in ages. All we do is fly aeroplanes, it isn't that hard. Get over it.