Is Air Canada on borrowed time?

[STOLskunkworks]

I am not sure if I have this correctly but here is my understanding.

ACE aviation became the parent company of Air Canada and they have since been selling off everything they can and stripping the company of any value.

Having been looking at some articles and I have some questions.

MONTREAL, Feb. 10, 2012 /CNW Telbec/ - ACE Aviation Holdings Inc. (ACE) today reported full year and fourth quarter results for 2011 and announced its intention to seek shareholder approval for its winding-up, the distribution of its remaining net assets and ultimately its dissolution in the future.

Air Canada estimates that it will have pension funding obligations of $341-million this year and $393-million in 2013.

So between the losses Air Canada are posting and the work disruptions etc. it looks quite scary. I wonder where they can continue to find money to operate.


So a few questions:

1) Does this mean they (ACE) have picked the bones clean and they see no further value in the airline?

2) Do they have any control of Air Canada's Management team, cash flow etc?

3) If AC continues to loose money can they raise capital somehow?

4) And I guess lastly should a guy with a wife kids and mortgage be leaving a turboprop job to go fly for them?

[Mostly Harmless]

The answers below are strictly the opinion of the poster, not those of the management or owners of this station:

1) Does this mean they (ACE) have picked the bones clean and they see no further value in the airline?

Yes. It sure looks as though they have done the vampire thing and drained the company of any actual assets or strength.

2) Do they have any control of Air Canada's Management team, cash flow etc?
Depends on what you mean by control... no direct control that I am aware of, but I'm sure all the boys on the board meet for drinks and golf.

3) If AC continues to loose money can they raise capital somehow?
Perhaps... tough to say. In this case, only time will tell.

4) And I guess lastly should a guy with a wife kids and mortgage be leaving a turboprop job to go fly for them?
It depends upon your long term goals but, I would say yes. Here's my reasoning; Once you have a type rating on a large (705) aircraft, you will never fly a small plane again (advice given to me by a friend a few years back when I was facing a similar decision that has held very true). If AC survives, you have a good job with a good career ahead of you, if they fail your options are broader than if you stay where you are... you could go international contract or you go to the top of the resume pile in the companies that will spring up to replace AC.

[Left Coaster]

Only partly true regarding the contract/overseas positions...It's mostly a Captains world in that part of aviation. Emirates, Etihad and Qatar all hire FO's with an upgrade program of a sort (they ALL hire Direct Entry Captains ahead of potentially upgrade-able FO's) so expect delays for a command. Asia hires mostly DEC pilots and most do not have any upgrade policies...careful about taking any advice unless it's from someone who has any actual experience in the contract world...plus once a move is made to leave, it's not as easy to get back...the three carriers mentioned above all used to require a resignation of a seniority number before they hired and may still require it...and we all know how much fun it could be to go back to the bottom of a list..unless of course there isn't a company left!:\ (imho AC will drop farther into the red and file again...)

[GMC1500]

I think your info regarding EK's hiring practice is a bit misleading. I can only speak about them as they are the only one I'm familiar with.
EK primarily hires FOs, the DEC thing has only very recently been reinstated and as far as I know, no DECs have been hired yet. Since I joined 3.5 yrs ago they've hired about 1000 pilots, all of them FOs. There's no way that DECs will ever be more than a tiny percentage of the total pilots hired.
So your statement that they have an upgrade policy of sorts is completely incorrect. I've been here 3.5 yrs as I stated and I'm getting my opportunity to upgrade now, and my only prior jet experience was right seat on an RJ in canada.
I can't speak for the others, maybe others who have direct experience can, but I believe if you are hired with any of these as an FO, you will be upgraded to capt at some point, depending on company growth and needs.

And, not to be guilty of thread creep:
I do believe AC is on borrowed time. They barely ever "show" a profit. Makes one wonder where all the money is going when the planes are mostly full. The current labour problems are causing them enormous pr problems in canada, not to mention lingering bad feelings when its all settled from the workforce.
Another point worth mentioning is that the salary and benefits for an FO are so far above what they are in canada that it really doesn't matter that much how long it takes to upgrade.

[Flytdeck]

Five things to consider with the current AC:


Financials. Not pretty and no improvement in sight.
Imposed contract will place a cap on current wages and reduce benefits.
The maximum flying age changes to 65 this December.
Pay/fleet grouping will reduce training (and number of pilots required).
Combination of previous two items alone will severely stagnate career progrssion for the next number of years.


The risk of going through bankruptcy proceedings again are fairly high. This would be a good excuse for the government to be able to discharge the maintenance facility obligations while eliminating the pension deficit (assuming the court would permit it this time around). Whatever emerged from the other side would be a sad reflection of a once proud airline.

Regarding the middle east carriers. Many of the Direct Entry Captains being hired at Qatar Airways are at the more stately end of the age curve and will be coming up against age 65 in short order. This has been done on purpose by the airline to allow the current crop of pilots the ability to move upward in relatively short order. Retirements combined with fleet expansion are guaranteeing a stellar career for those jumping into the fray during the next two years or so.

Get some jet experience, fast. Air Canada is hiring and gives excellent training. But the company that once valued employees is no longer there, and should be treated accordingly. Eyes wide open for other opportunities and jump ship before your craft submerges completely.

[Left Coaster]

Hey congrats on the upgrade...when I said be careful with the contract pilot world, I did say that most of the ME carriers hire FO's mostly but will salt the ranks from time to time with DECs...and the changes in working conditions (mostly arbitrary) will bother lots of staff as well...the other side is you probably had to resign your seniority number at your previous company right? Asian carriers will only rarely upgrade FO hires (except CX) and for sure hire DEC anytime they want. (And let those same ones go at will) All are guilty of changing the work rules to suit them at will...so all I mean to say is be very careful of the contract world...it can bite if you aren't on your game. EK et al might be included in that statement, if the intel is right! Have fun with the new seat and fly safe!

[rigpiggy]

The Execs will let it die an ignominious death, buy the landing slots, and open under another name.

[BizAvIntl]

The Goverment will never let it go bust. Although in the long term that would be the best thing. Although I hope it doesnt for all the guys and gals working there.

I just wish they would offer a proper Flag Carrier scheduled level service. Charge more than west jet but put things back to the old days two bags, free drinks and meals, Headphones etc. People would pay for service. I just wish worldwide BA,AA,AC and the like would stop pretending to be low cost carriers. Charge more but offer something in return.