The relationship between Air Canada and its feeders are simply wet-leases. Air Canada, to lower the high cost of making certain flights with its own aircraft and crews, signed wet lease contracts with companies such as Jazz, Sky Regional and Georgian to provide lift at a lower cost. Feeders are nothing other than cheap wet leases on long term contracts with an airline. Air Canada now wants to adopt the US model where they will play one feeder against another in order to obtain its wet leases at the lowest possible cost. Since aircraft, spares, fuel and insurance cost the same regardless of which company operates a given aircraft, the variables one can play with to lower the cost of flying are the work conditions and the salaries of the employees, the overhead costs and the profit. When the cost of chartering aircraft from an older feeder creeps up because its been around for 10 to 20 years and employees begin to get better working conditions and salaries, the costs of wet-leasing the aircraft they fly go up. Then the mainline can just decide not to renew the contract of the feeder and accept submissions from a newer company with little fat. I guess that is why AC divested itself of Jazz for it couldn't possibly force its wholly owned subsidiary into bankruptcy, nor just shut it down. So they sold it first. Jazz will go the same route as Aveos, unless it is able to drastically cuts cost by the time the contract ends in 2020, which, if it costs are cut by any measure, will be done at the expense of the employees. When the plug is pulled, those Jazz employees who still want to work will just apply at the bottom of the list at Georgian, and Sky Regional. And this process will repeat itself, if and when these two latter companies become too fat over time.

We are now in a situation where Canada's second largest airline, Jazz, with over 5000 employees, over 120 aircraft and about 1300 pilots, is at the mercy of Air Canada. And their head is on the block.

Jazz, does not sell tickets, has no customers of its own, has no reservation system, has no check-in counters, no marketing, no revenues outside of what Air Canada pays them for wet-leasing their aircraft. All the passengers Jazz carries are AC passengers. This is nothing but a a pure wet-lease. AC wet-leases Jazz, and Sky Regional and Georgian to fly certain routes for them. Nothing is shared. This "code-sharing", when that term is used, is just a front.

The CTA should only allow "code sharing" between two airlines that really share codes, like AC and Luthansa for example, and deny permits to fake code shares like AC and Jazz and call it it what it is, a wet-lease on a large scale.

Laws, regulations or policies should be established that would limit the number of wet-leases that an airline can have in proportion to its fleet, just like they recently did for the foreign wet-leases which are limited to 20% of the applicant's fleet.

If this is not done, what will prevent a mainline from operating just a token number of aircraft, and wet-lease 90% of its flights to the lowest bidder, under the guise of "code-sharing" ? When a feeder become too expensive, the mainline can just pull the plug on it by not renewing its wet-lease contract.

I also think, in order to to make it a level field in the international scene, that such "code-sharing" and wet leaseing restrictions should be applied to foreign airlines coming into Canada. Any airline flying into Canada that does not have its own passengers, like Envoy, should be barred as the decoy that it is and permits should only be granted to those, like American Airlines, that would have their own passengers and that fly into Canada with its own aircraft, not chartered ones.

This would either force AA to fly Regional Jets to Canada or it would help create smaller airlines that would fly their own passengers. But this practice of giving the flying to the lowest bidder B/S has to stop. Air Canada created Jazz to undercut Air Canada, and they helped create Sky regional, and gave Georgian the boost it needed to undercut Jazz, just to play one against the other. They created competition amongst their feeders to obtain the lowest price and get a backup if Jazz, like Aveos, succumbs when Air Canada tightens the noose around its neck..

This sub contracting flying to lower bidders is a disaster in the works for everyone, the airlines, the passenger and mostly the airline employees....... We saw what happened in the US. The US is the one who needs to correct their model. We cannot let Canadian companies adopt the US model or soon we will have a young FOs do an early morning flight in a Regional Jet and return just in time to switch uniforms in the airport washrooms and start his shift at Starbucks.... We will also have pilots losing jobs where they made 6 figure salaries face the prospect of either having to go work overseas or accept a salary half of the one he/she earned in the last job.

I was looking at the Air Transportation Regulations located here:

http://laws-lois.justice.gc.ca/PDF/SOR-88-58.pdf

PROVISION OF AIRCRAFT WITH FLIGHT CREW

8.2 (1) For the purposes of section 60 of the Act and subject to section 8.3, approval of the Agency is required before a person may provide all or part of an aircraft, with a flight crew, to a licensee for the purpose of providing an air service pursuant to the licensee’s licence and before a licensee may provide an air service using all or part of an aircraft, with flight crew, provided by another person

8.3 (1) The approval referred to in section 8.2 is not required if, in respect of the air service to be provided, the appropriate licence authority, charter permit and Canadian aviation document and the liability insurance coverage referred to in subsection 8.2(4) and, where applicable, subsection 8.2(5), are in effect and
(a) both the person providing an aircraft to the licensee and the licensee are Canadian, the person is a licensee and the air service to be provided is a domestic service or an air service between Canada and the United States;

What they say, is that if a licence holder want to wet-lease another licence holder to do flights on his behalf, such was what Georgian, Sky regional and Jazz do on behalf of Air Canada, it needs an approval from the CTA except if the service to be provided is a domestic Service or a flight to the US.

These permit-less wet-leases are not possible to International destinations. So feeders such as Jazz, Georgian and Sky regional cannot do flights to Mexico or to Caribbean Destinations on behalf of Air Canada, but, according to current Air Regulations, if it wanted, Air Canada could sub-contract to feeders all of its domestic flights and all of its flights to the US and only keep its International flights with the mainline. Is that acceptable ? I do not think so.

I think we should have a lobby group to have the Minister of Transport modify the Air Transportation Regulations, to limit the number of aircraft an airline can wet-lease, regardless of the type of flying it does. Like for the International flights, wet-leases should be limited to say 20% of one's fleet, no feeders should be allowed on overseas flights and no foreign feeders should be allowed into Canada.

(This paragraph edited out after comment from CD below)

This is one of those files where you may win the battle, but lose the war.

Gilles Hudicourt wrote:(I now understand why Rouge is not a separate company like Jazz was when it was wholly owned by Air Canada, but just a brand name, flying under the Air Canada CTA Permit and the Air Canada TC Operating Certificate. The only difference between the Air Canada mainline and Rouge are the work contracts of the crews, the seat configurations and the in-flight service.)

Your assumption here appears to be in error as Air Canada and Air Canada rouge do have separate operating certificates:

Air Canada: 5262
Air Canada rogue: 17978

You can verify that sort of information at the following link:

Transport Canada: Air Operator Search List

I stand corrected.

Now I wonder how Air Canada Rouge is allowed to fly International Routes for Air Canada. It must be the subject of a Canadian Transportation Agency authorization which I have yet to find. Or there is something else I do not understand. Anyone ?

Rouge is allowed to fly under the ZX (Air Georgian) Code. There are now 3 airlines sharing the ZX code. Georgian, Sky regional, and Rouge.

I don't know about pinning Aveos on AC. It can be argued that their failure was as much mismanagement by Aveos itself as it was cost-cutting by AC.

We've all heard the horror stories about the lack of work productivity at Air Canada Maintenance/AVEOS. I could be more specific were I not writing under my real name. There were major issues there. But had Aveo stayed under the Air Canada umbrella instead of being set adrift, and its productivity improved, would it not still be around ?

Air Canada's chief executive says the carrier can't be blamed for the demise of maintenance firm Aveos Fleet Performance and he hopes other companies will step in to hire its terminated workers.

Calin Rovinescu told a parliamentary committee on Thursday that the heavy maintenance company — formerly a division of Air Canada — failed because it was unable to attract additional customers to diversify its revenue stream.

Air Canada (TSX:AC.B) said there is a large pool of skilled talent that could be hired at facilities in Montreal, Winnipeg, Toronto and Vancouver.

This is exactly what they will say about Jazz when they cut their contract from 122 aircraft to 40 in 2020.

But please do not let this discussion drift on AVEOS, let's stay on subject.

Jazz is big enough I think to have some negotiation power come 2020 but I doubt that management wants it to continue with salaries slowly going up so probably a lost cause. But if Jazz tried to partner up with someone like Westjet or code share with other international carriers they would pose such a massive risk to AC's feeder system that I think they would actually have the bargaining position to get another decent CPA. That is assuming of course that Jazz's capacity isn't cut steadily in the next 5 years which is a good possibility but I suppose it depends on what kind of performance numbers sky regional and Georgian can put out.

Laws, regulations or policies should be established that would limit the number of wet-leases that an airline can have in proportion to its fleet, just like they recently did for the foreign wet-leases which are limited to 20% of the applicant's fleet. If this is not done, what will prevent a mainline from operating just a token number of aircraft, and wet-lease 90% of its flights to the lowest bidder, under the guise of "code-sharing" ? When a feeder become too expensive, the mainline can just pull the plug on it by not renewing its wet-lease contract.

I think we should have a lobby group to have the Minister of Transport modify the Air Transportation Regulations, to limit the number of aircraft an airline can wet-lease, regardless of the type of flying it does. Like for the International flights, wet-leases should be limited to say 20% of one's fleet, no feeders should be allowed on overseas flights and no foreign feeders should be allowed into Canada.

I don't much like it when my customers help me "manage" my cost structure by supporting my competitors, but that's the reality of a market economy. You develop a competitive advantage by being low cost, or by locking in your customers, or by building a better mousetrap. There really aren't any other viable alternatives.

In the same vein, I'm pretty sure my suppliers don't like it when I help them manage their cost structures by buying from their competitors when pricing and quality dictate. Tough. Again, market economy.

So exactly what is so sacrosanct about the airline transport industry that you think that legislation should be passed to prevent airlines reducing their costs by using cheaper suppliers? How exactly is legislating entrenched higher costs going to help in building an internationally competitive industry? (Hint: look no further than the Canadian auto manufacturers to see how well that's working). (Second hint: doing it to preserve jobs with six-figure salaries for a few thousand airline pilots, at the expense of 30+ million potential domestic customers, isn't going to go over well either).

"So exactly what is so sacrosanct about the airline transport industry that you think that legislation should be passed to prevent airlines reducing their costs..........."

Reducing their costs is called de-regulation......... legislation should be passed is call re-regulation which is that ole buzz that will not happen.

If Calin has his ways he wants all domestic, transcon, and leasuire destinations gone from mainline Air Canada. And for the mainline to only do wide-body flying, it's the scope that's really holding him back.

I am not asking for re-regulation of the airline industry. Let me remind you that in the past, it was required that airlines first seek approval to serve any given route and that those already serving a given route could object to new competition. There was also some pricing regulation. De-regulation allowed more competition which brought the price of travel down. All that is good and it must remain that way. The system we have in place today however encourages a monopoly of a few airlines and smaller ones must either be absorbed by the big airline or vanish.

What I would like to see, is that when Air Canada does a route, that this route be flown by an Air Canada aircraft and crew, not by a cheap wet lease flying on behalf of Air Canada.
What I would like to see, is when we allow American Airilines to fly from the US to Canada, that this route be done by an American Airlines aircraft and crew, not by a cheap wet-lease flying on their behalf.
That is not re-regulation. That is not anti-competitve. Quite the contrary. When Air Canada and American Airlines will find that they cannot profitably do certain routes themselves, they will withdraw and let other real airlines that can fill the void. Real airlines, with customers, routes and schedules.

There used to be a number of smaller airlines in Canada. They were acquired one by one by Air Canada and Canadian Airlines and finally were all merged into one called Jazz. Then Air Canada sold Jazz off and we all know what will happen in 2020. All this in the name of "competition".........

The second largest airline in Canada has one customer, Air Canada. It has no other customers, no reservation system, no ticketing, no counters. It has Aircraft, Crews, Maintenance and Insurance (ACMI). Which is what it does.

This is what I think we should get rid off. Jazz or others like it should be allowed to be real full airlines in their own right.

All this would not occur if the CTA did not allow one airline to wet-lease other airlines to fly on its behalf on such a large scale. You do your own flying or you let others do it. That is not regulation. That is fair competition.

RVR6000 wrote:If Calin has his ways he wants all domestic, transcon, and leasuire destinations gone from mainline Air Canada. And for the mainline to only do wide-body flying, it's the scope that's really holding him back.

Exactly! And this is too much of a burden to held by Unions. The CTA and the Minister of Transport should get involved. Is Air Canada an "airline" or just a ticket supplier that sub-contracts all or most of its flying to the lowest bidding sub contractor ?

All this would not occur if the CTA did not allow one airline to wet-lease other airlines to fly on its behalf on such a large scale. You do your own flying or you let others do it. That is not regulation. That is fair competition.

Actually, that sounds an awful lot like regulation to me.

Look, there’s nothing inherently anti-competitive about contracting out parts of your production process/cost structure: in fact, if it lowers your costs, you become more competitive, not less. Legislating against capacity purchase to preserve legacy WAWCON is what’s anti-competitive: you’d be requiring operators to bear a more expensive cost structure than they can otherwise achieve in the market by out-sourcing. In the short term, you might preserve mainline jobs and wages; longer-run, you’ll simply create a bunch of higher-cost, less competitive carriers who have to enforce higher pricing to cover their costs, making travel more expensive, not less.

The Joe blow flyers/passengers/guests haven't a clue about wet/dry lease, what airline doesn't have its own reservation system, ac type, crew etc. etc. Nor, I hasten to add do they care one iota. What concerns us is “how much will it cost me”. The method used to get a reasonable “how much will it cost me”, we leave that to the industry to come up with that requirement aka business model. It's working so far.

I did a little research about Air Canada Rouge on the CTA Website. I emphasize again that Rouge has it's own OC from Transport Canada and is a new Airline, although one like Jazz that that has no passengers, no counters, sells no tickets and no reservation system.

In Decision No. 470-A-2012 dated December 10, 2012, the Agency determined that 816 (Rouge), as a wholly-owned subsidiary of Air Canada providing aircraft to Air Canada for the operation of services on behalf of Air Canada, would not be required to hold licences for the proposed services and further, that approval pursuant to section 60 of the Canada Transportation Act (CTA) and 8.2 of the Air Transportation Regulations (ATR) for the use by Air Canada of aircraft and flight crew provided by 816 under an agreement is required.

Then of course, they granted said approval in Decision 250-A-2013, later modified in Decision 473-A-2013.

https://www.otc-cta.gc.ca/eng/ruling/470-a-2012

https://www.otc-cta.gc.ca/eng/ruling/250-a-2013

https://www.otc-cta.gc.ca/eng/ruling/473-a-2013

So Air Canada Rouge, is also an Airline providing ACMI to Air Canada.

Can Air France, whose crew members earn some of the highest salaries and have outstanding work conditions, create "Air France Blue" under another OC issued by the French Civil Aviation, transfer part of its fleet to the new company, hire cheaper crew members to crew these aircraft, and then on, by piggybacking on the Air France licence and permit, begin doing Paris-Montreal flights without asking the Canadians what they think of the scheme ?

I guess so, because that is what Rouge is doing now. Rouge is not presented to other countries as another company, which it is, but just as a new business name being used by Air Canada.

And Rouge also may do Domestic Flights for Air Canada.

https://www.otc-cta.gc.ca/eng/ruling/318-a-2013

Air Canada also carrying on business as Air Canada Jetz, Air Canada Express and Air Canada rouge (Air Canada), on behalf of itself and 8165343 Canada Inc. carrying on business as Air Canada rouge (816), has applied to the Canadian Transportation Agency (Agency) for an approval to permit Air Canada to provide its domestic services, medium, large and all-cargo aircraft, using aircraft and flight crew provided by 816, for an indefinite period.

Air Canada advises that it does not have any specific routes on which it would like to utilize 816’s aircraft and flight crew. Air Canada states that its proposal is necessary to allow it to have leeway to use 816’s equipment and personnel in the event that Air Canada can not use one of its own aircraft. Air Canada also explains that this would provide it with the flexibility to use 816’s aircraft and flight crew, without having to submit an emergency application to the Agency on the same day of operation.

Gilles Hudicourt wrote: What I would like to see, is that when Air Canada does a route, that this route be flown by an Air Canada aircraft and crew, not by a cheap wet lease flying on behalf of Air Canada.

Do you really think Encore is the same as Westjet? I don't disagree with anything you've said here, but it certainly seems that the industry is headed in the opposite direction. The exception, I'm sure will be pointed out is Transat, which I understand is bringing their narrow body flying in-house, but what concessions did the pilot group make to 'secure' that flying? What are 737 Captains going to earn at Transat BTW? To me it seems pilot groups are either selling scope for raises or taking pay cuts to bring flying in-house.

Your altruistic opinions are no doubt going to be well received on a pilot forum, but you're preaching to the choir here. We don't run the industry, and our current government has no interest in adding any regulations that doesn't benefit corporations.

I think about this quite a bit and the one question that keeps coming to my mind is "who's investing in this"?

So lets step back a bit and think about this from a different perspective. The whole idea behind running a business is to make money right? Well let's assume I'm a half-savvy businessman running a small successful airline and I see Air Canada wanting to adopt this model of pitting carriers against themselves to wring the most money from the feeders as possible. This works for Air Canada right? They have lower costs and make more money. Sure it works fine for them but then they come knocking on my door. What about my airline though?

So, consider my little airline that Air Canada wants to use to pit against their current customer. Thinking as a somewhat savvy businessman once again, how is this deal in my best interest? From the get-go, I'm having to undercut my competition and accept less money than what they're getting. After all, if I demanded what they're already getting Air Canada wouldn't even be looking at me.

Next, look a little into the future. My employees are going to want raises, and if I comply, my costs go up. Fuel, maintenance, etc.......it's all going up. What usually follows is very high turnover. Next thing you know Air Canada is looking to dump my company. Seriously, how is this a business model and why would these companies go for it in the first place? Why would any investor go for this deal? It's a pointless battle where everyone loses.

So ultimately, who stands to gain here other than Air Canada? That's the heart of the issue here to me and I figure there must be some shadiness beneath it all. Seems to me that there must be quick easy money to be made and then to bolt when it's convenient.

TheStig wrote:Do you really think Encore is the same as Westjet? I don't disagree with anything you've said here, but it certainly seems that the industry is headed in the opposite direction. The exception, I'm sure will be pointed out is Transat, which I understand is bringing their narrow body flying in-house, but what concessions did the pilot group make to 'secure' that flying? What are 737 Captains going to earn at Transat BTW? To me it seems pilot groups are either selling scope for raises or taking pay cuts to bring flying in-house.

Your altruistic opinions are no doubt going to be well received on a pilot forum, but you're preaching to the choir here. We don't run the industry, and our current government has no interest in adding any regulations that doesn't benefit corporations.

Encore is the same as Sky Regional, Rouge or Georgian. I'm not attacking any specific company by the way. It's the legislation that allows the companies to do this which I think needs to be modified. The reason I think government and not Unions should get involved in this is to create a level competitive field where all companies are subject to the same rules and restrictions. Scope clauses that prevent one company from doing certain things do not prevent its competitor from doing it.
We must never reach the level where pilots will have to pay to sit in the right seat of a feeder and pay for their type ratings out of their pockets. If we don't reverse this trend, this is where we will end up.

Air Transat is bringing its 737 flying in house. To obtain that, we accepted another pay scale for the 737 for until then we had a unique pay-scale regardless of aircraft type.

The salaries for the 737s go from 90,5 to 157.2 for the Captains, and 50 to 81.7 for the SIC over a 10 year pay scale. I must state that even though our first 737 arrived in Feb 2014, this pay-scale was negotiated by our Union in 2009, but it took that long to finally get the flying. The current contract is to be re-negotiated later this year. However, our 737s will be flown under our own Certificate, not under a separate one like Encore and Rouge, and with the same collective agreement as the other pilots. The flight attendants will be the same. The majority of the 737 pilots will have dual qualifications 330/737 or 310/737 and those who do will remain year round on the wide-body pay. Those that are forced on the 737 full time will also keep the wide body pay. Only those that willingly bid the 737 full time or new hires hired on the 737 full time are subject to that pay scale. So far, it seems that recent hires are all dual qualified......
And there are no barriers preventing someone who was hired on the 737 to move over to the 310 or 330 when his seniority allows it.

Why the sudden concern about Jazz. Perhaps it is being used as an excuse for a different concern. What might that be? Looks like somebody has started to realize that there is a bigger threat to AT than Sunwing. AC Rouge. It is a steamroller coming into the charter market.


What will be the top level pay for a Rouge captain?

The good news, lots of job opportunities for all Canadians at Rouge with few artificial hiring barriers. Awesome.

Gilles Hudicourt wrote: It's the legislation that allows the companies to do this which I think needs to be modified. The reason I think government and not Unions should get involved in this is to create a level competitive field where all companies are subject to the same rules and restrictions.

What legislation are you referring to? I wasn't aware any exists. If you think our current federal government is interested in anything of the sort, you haven't been paying attention.

Gilles Hudicourt wrote: The salaries for the 737s go from 90,5 to 157.2 for the Captains, and 50 to 81.7 for the SIC over a 10 year pay scale.

rouge hourly rates from 2013 are from 122 - 197 for Captains and from 48 - 120 for FO's, these pay scales were simple copies of AT's (for the 767) and WJ's for the 319 (which I should mention start higher than 767's...) when the contract was written. They'll increase by 2% this April and 2% again the following year. Captains carry their years of service as Captains at Air Canada to rouge. I wish they were the same as Air Canada's mainline rates, but its hard to argue that they're dragging the industry down.

Gilles Hudicourt wrote: However, our 737s will be flown under our own Certificate, not under a separate one like Encore and Rouge, and with the same collective agreement as the other pilots.

Pilots at rouge are on the same seniority list, there are a few restrictions between bidding between the two that exist to prevent junior mainline pilots from bidding to rouge to take advantage of the social vacation bidding, then bidding back to mainline, but nothing else really. The differences between rouge and mainline collective agreements introduced at rouge, aside from lack of augmentation on overseas flights, have made rouge positions quite popular, the big downfall for the group as a whole has been that the routes being flown by rouge were very popular and have been missed by the senior pilots.

Old fella wrote:The Joe blow flyers/passengers/guests haven't a clue about wet/dry lease, what airline doesn't have its own reservation system, ac type, crew etc. etc. Nor, I hasten to add do they care one iota. What concerns us is “how much will it cost me”. The method used to get a reasonable “how much will it cost me”, we leave that to the industry to come up with that requirement aka business model. It's working so far.

If your argument is true, and I pray it is not, then the Ryanair model, or worse, is what we all have to look forward to.

Business owners like to talk about return on investment.

There isn't a single operator in this country that can get away with operating aeroplanes that don't have a properly licenced pilot or pilots sitting up front with the right amount of experience. An investment they make which is no different than any other asset that company might require. Including the very aircraft that make it an airline.

It's time to understand that fundamentally, the cost of an airline ticket has gotten to the lowest it's likely to get. It might also be time for some of these companies to accept the limitations of the airline business, especially in Canada, and focus more on product, quality and service. When they do they will most likely attract the passengers they deserve. Not the sense of entitlement passengers they're stuck with.

If you can't afford to run a business then get out of the business or go broke.
If you can't afford to buy a ticket. Take the bus or the train.

I paid for my licences by investing in myself as did many other Canadian pilots.
It's time they got a return on their investments.
No, it's beyond time.

Are we to believe airline business owners understand the value of an asset like an aeroplane but NOT the value of assets like the pilots required to operate them?

....apparently not. It's a one sided conversation no matter what side of it you're on.

Gino Under

TheStig wrote: What legislation are you referring to? I wasn't aware any exists. If you think our current federal government is interested in anything of the sort, you haven't been paying attention.

In the winter of 2013/2013 when Sunwing began using foreign wet-leases as a business model, all major airlines in Canada protested. Sunwing lawyers argued that there was no regulations preventing them from wet-leasing foreign aircraft as a business model and the CTA agreed with them and allowed it. The companies then all lobbied the government that this Regulation had to be changed and surprisingly, amazingly, the government listened. The Minister of Transport came up with a new policy that limited the amount of foreign aircraft that a Canadian carrier was allowed to wet-lease to 20% of its fleet.

The rules that govern what I am talking about are Article 60 of the Canada Transportation Act and Article 82 of the Air Transportation Regulations.

Provision of aircraft with flight crew

60. (1) No person shall provide all or part of an aircraft, with a flight crew, to a licensee for the purpose of providing an air service pursuant to the licensee’s licence and no licensee shall provide an air service using all or part of an aircraft, with a flight crew, provided by another person except
(a) in accordance with regulations made by the Agency respecting disclosure of the identity of the operator of the aircraft and other related matters; and
(b) where prescribed, with the approval of the Agency.
Marginal note:Conditions and Ministerial directions

(2) Approval by the Agency under subsection (1) is subject to any directions to the Agency issued by the Minister and to any terms and conditions that the Agency may specify in the approval, including terms and conditions respecting routes to be followed, points or areas to be served, size and type of aircraft to be operated, schedules, places of call, tariffs, fares, rates and charges, insurance, carriage of passengers and, subject to the Canada Post Corporation Act, carriage of goods.

Provision of Aircraft with Flight Crew

8.2 (1) For the purposes of section 60 of the Act and subject to section 8.3, approval of the Agency is required before a person may provide all or part of an aircraft, with a flight crew, to a licensee for the purpose of providing an air service pursuant to the licensee’s licence and before a licensee may provide an air service using all or part of an aircraft, with flight crew, provided by another person.
(2) The person who provides an aircraft to a licensee and the licensee shall apply to the Agency for an approval referred to in subsection (1) at least 45 days before the first planned flight.
(3) The application shall include the following:
(a) in respect of the proposed air service, evidence that the appropriate licence authority, charter permit and Canadian aviation document and the liability insurance coverage referred to in subsection (4) and, where applicable, subsection (5) are in effect;
(b) the name of the licensee;
(c) if applicable, the name of the charterer or charterers and the charter program permit or authorization number;
(d) the name of the person providing the aircraft with flight crew;
(e) the aircraft type to be provided;
(f) the maximum number of seats and the cargo capacity of the aircraft to be provided and, where applicable, the maximum number of seats and the cargo capacity to be provided for use by the licensee;
(g) the points to be served;
(h) the frequency of service;
(i) the period covered by the proposed air service; and
(j) an explanation of why the use by the licensee of all or part of an aircraft with a flight crew provided by another person is necessary.
(4) The licensee shall maintain passenger and third party liability insurance coverage for a service for which another person provides an aircraft with flight crew, at least in the amounts set out in section 7,
(a) by means of its own policy; or
(b) subject to subsection (5), by being named as an additional insured under the policy of the other person.
(5) Where the licensee is named as an additional insured under the policy of the person referred to in subsection (4), there must be a written agreement between the licensee and the person to the effect that, for all flights for which the person provides aircraft with flight crew, the person will hold the licensee harmless from, and indemnify the licensee for, all passenger and third party liabilities while passengers or cargo transported under contract with the licensee are under the control of the person.
(6) The licensee and the person who provides the aircraft with flight crew shall notify the Agency in writing forthwith if the liability insurance coverage referred to in subsection (4) and, where applicable, subsection (5) has been cancelled or altered in any manner that results in failure by the licensee or the person to maintain the coverage.
SOR/96-335, s. 4.

It's under the above laws and regulations that companies like Air Canada and Westjet, can create and use the likes of Rouge, Sky Regional and Encore. Legally I might add.

But like I already wrote on this thread, I think that these regulations need to be modified or a policy put in place, that would, like the Minister of Transport just did for the foreign wet-leases, limit the number of aircraft an airline could wet-lease.

Rouge, Jazz, Georgian, Sky Regional and Encore are nothing other than wet-leases flying on behalf of Air Canada and Westjet.

Let's compare with American Airlines for example. The mainline operates 627 aircraft. The several feeders operating on behalf of American Airlines, operate a grand total of 291 smaller aircraft. AA has 2.15 more aircraft than its combined feeders.

Air Canada which has about 182 aircraft, wet-leases 176 aircraft from Jazz, Rouge, Sky Regional and Georgian. And this proportion may increase to where there will be more sub-contracted feeder aircraft flying under the Air Canada banner than real Air Canada aircraft. How many more aircraft can Air Canada transfer to its feeders before we say enough!

Right now Air Canada has just 57 wide bodies. What if they decided, like someone suggested on this thread, to just keep those 57 wide bodies on their fleet and have 301 aircraft or more, operated by sub contracted feeders flying on the Air Canada licence ? Would that be acceptable ? It might help Air Canada bring costs down and provide even cheaper tickets to the grateful Canadian Public.

The current laws and Regulations allow it. Only Scope clauses stand in their way. Is that enough ?

When Westjet pilots and flight attendants begin to earn too much money, what will prevent Westjet to create a new company called Westjet Green, and put all its new 737 Max on that certificate, but tell the CTA that the new company will fly on behalf of Westjet on the Westjet licence. Then they can hire new non-unionized pilots at lower salaries, base them where they want, hire fresh 19 year old flight attendants than can work 15 hour and 8 leg days and still smile and tell jokes, which will cut costs drastically and kill several birds with one stone. Next thing you know, Westjet Green will be twice the size of Westjet and have all the new aircraft. And it's legal. It's under the same laws that Rouge was created. Are there any scope clauses at Westjet preventing this scenario ? Someone let me know if there is.......

Gilles Hudicourt wrote:

Old fella wrote:The Joe blow flyers/passengers/guests haven't a clue about wet/dry lease, what airline doesn't have its own reservation system, ac type, crew etc. etc. Nor, I hasten to add do they care one iota. What concerns us is “how much will it cost me”. The method used to get a reasonable “how much will it cost me”, we leave that to the industry to come up with that requirement aka business model. It's working so far.

If your argument is true, and I pray it is not, then the Ryanair model, or worse, is what we all have to look forward to.

My commentary(not argument) certainly is true. Why, because they(RyanAir) are still in business due to the fact, despite it all, people use their service because of"how much it will cost me". By some commentary( not mine cause I have never flown with them) RyanAir may not be the best/highest model to set standards by but it is working....... I don't know what else to say.

I am trying to figure out the point of your presentation other than that for internal consumption amongst the airline personel(pilots) that populate this site to generate discussion - and it has done that. To an outsider like me, having flown Jazz, do I really care about their Air Canada relationship, the fact they have no reservation system, tis all AC or whatever. The "outsiders" are the people who pay..........

Defense rests!!