Why is Air Canada losing so much money and what can done about it?
 

Air Canada lost 1.03 Billion dollars in 2008.

Air Canada appoints Calin Rovinescu as president and chief executive

That comes out to 2.82 million dollars a day. This is despite rather high load factors.

What, if anything, can be done to save the airline and bring it back into the black ?

To start with get rid of the ACPPA the Air Canada ACT.

CCAA:uhoh:

Unfortunately CCAA does not get rid of ACPPA as was shown in the last round of CCAA. Westjet and Porter no longer need protection

Acppa ?
 

For those of you not familiar, its here to read:

Air Canada Public Participation Act

A short history of the company
 

Trans Canada Airlines Act. They are a creation of the Canadian Gov. Always had all the best routes , equipment ,facilities , and were protected by the gov. Operationally felt they were the best , even though they had a poor safety record until recently .They went public in the late seventies with a clean sheet...equipment, facilities, routes , no debt, and managed to end up bankrupt. And here we go again .

A corporate culture who still lives in the good old days of the Trans Canada Act.

Yabbo
I'am afraid you will have to review how Air Canada went public in 1989. With the ACPPA I might add .

Rovinescu should land Air Canada on CCAA tarmac

"In 2008, Air Canada's costs per available seat mile, outside fuel, was 12.4 cents. WestJet's was 8.3 cents."

Air Canada has to reduce costs . Start with ACPP pensions will be next due 4 billion dollar shortfall. Contracts with Jazz and Aeroplan I'am sure are in Calin's sights .

Yobbo wrote-

"Trans Canada Airlines Act. They are a creation of the Canadian Gov. Always had all the best routes , equipment ,facilities , and were protected by the gov. Operationally felt they were the best , even though they had a poor safety record until recently .They went public in the late seventies with a clean sheet...equipment, facilities, routes , no debt, and managed to end up bankrupt. And here we go again .

A corporate culture who still lives in the good old days of the Trans Canada Act."

a) as EA340 wrote, Air Canada act was passed in 1989, not 70s, and puts several caveats on AC that are NOT applied to other airlines.
b) Poor safety record ? Where is your head at man ? There has been no significant incident at AC since 1986 -- a far far better record than, say BA.

ACPPA
 

I quickly read the ACPPA and I don't see anything there that can be interpreted as being financially detrimental to the company, other than the obligation to maintain certain maintenance bases and the headquarters in Montreal. I agree that these clauses and all others like it should be eliminated. A company must be free to manage itself as required by its management without having a hand tied in its back.

lets start with translating every piece of paper in the company including all aircraft manuals. The cost of language training for F/A's and agents .Manitoba is suing Air Canada under the ACPP for closing the Winnipeg F/A base . Requirement to have a maintenance base in YWG. Is it cheaper to have your Head office in Montreal or Calgary. The list goes on. It would be interesting to have Westjet come under the Offical Languages Act a reqiurement of the ACPPA and see what the cost is

I think our fine, upstanding representatives in Ottawa may have to be convinced to let Air Canada out of ACPPA this time. Or, take some of the money that it's printing and pay for it.

Why Air Canada is Sinking
 

As a regular user of Canadian Air Lines I have a challenge. If you ever meet an Air Canada employee that does not hate their job and everyone thet meet on their job please introduce me. It will be a first.

KUBE,

I'll introduce myself to you, An AC pilot one of the vast majority who are truly 100% dedicated to the success of Air Canada, are proud to represent our country as the national carrier and enjoy being part of AC. Yes the people I work with, again the vast majority front and back end are fantastic to work alongside.

Kube
Another problem AC had was the Liberal merger of AC and CDN . Air Canada only wanted the overseas operations. It appears there was a lot of unhappy campers on both sides. As a result of that merger Australia allowed Ansett to die.

I would have to agree with Kube. Although I don't travel frequently with AC when I do it is in business class. The standard of service in both the lounges and in the air are far from satisfactory. Recently I have encountered rude and unhelpful staff in LHR and YHZ and in the air even a simple request for a drink of water can bring an exaspirated look from the cabin crew member. Thank goodness most of my other trips are with Singapore Airlines: now they really do know how to look after their customers.

Efficiency
 

Talking to people about this problem, I heard all sorts of stories. Within Air Canada, there is a deep rooted sense of Government bureaucracy inherited from the days when AC was a Crown Corporation. A few examples.

How many times does it happen every day that an aircraft arrives at the gate on sched and has to wait, engines running, 5, 10, 15, 20 minutes, for the ground crew to show up before it can be parked. When they do arrive, look out the window. They are never in a hurry, quite the contrary.

Recently, I was on an Air Canada flight. The front end put the parking brake and waited a short time for the ground crew to show up (less than 5 minutes, but we did wait) and when the aircraft was finally parked, the bridge put in place and the door opened, there was no ground agent in the bridge. Air Canada rules state that there must be a ground agent in the bridge before anyone can be let out. We waited in the aircraft at least 10 minutes after the door had been opened, until the captain got out of the cockpit, went into the terminal and came back two minutes later with a ground agent in tow. When I walked out, there were several ground agents milling around the gate desk, chatting.

Another case I heard about. An airline employee goes to buy a car. At the dealership, he recognizes a senior Air Canada ground agent. This AC ground agent also works full time at the dealership. The airline employee enquires on how this person can find the time to work full time at the dealership and at Air Canada at the same time. It turns out this AC ground agent who makes a high hourly pay and has full time shifts can sell his shifts to junior ground agents who have low salaries and part time shifts. Air Canada pays the shift to the senior agent at the seniors' salary, who in turn pays the junior agent the shift at that agents' lower salary. The senior makes $100 per day profit on the junior, while working full time at the dealership. It seems that Air Canada attempted to stop this practise but ran into the opposition of all union groups involved. This seems to be widespread.

A new aircraft technician gets hired a few years ago. He is given a work order to go fix an aircraft in the hangar. He completes the job in 30 minutes and comes back for more work. His supervisor tells him the job he was given was a two hour job and instructs him to go have coffee with the others for 90 minutes before coming back for another work order. At night, the Air Canada maintenance hangars are full of pick nick tables with Air Canada technicians killing time for their next work order. When a technician works efficiently and quickly, he is quickly warned by the senior technicians to slow down, less the junior make them look bad. I was told it is a common sight to see aircraft technicians sleeping in Air Canada aircraft in the hangars at night.

Talking to people, one hears dozens of such stories, all of which are part of the overall Air Canada problem.

As long as a large proportion of Air Canada employee will continue to have that mentality that Air Canada is Canada's flag carrier that the Federal government will never allow to go under, things will not change.

Like Sabena, Swiss Air, Eastern or Pan Am, Air Canada can and will go under if it doesn't become a model of efficiency at all levels of the company. Having most seats sold on a fleet of modern fuel efficient aircraft is not enough. All involved have to pitch in. This is not what is happening.

Air France and BA were able to turn a profit despite very heavy Collective Agreements and High salaries. Air Canada can do it too. If not, it will follow the example of Swiss Air and Sabena, whose employees, all thought until the very last day that their governments would never allow their airlines to fold, yet fold they did.

Dismantle it...
 

Force it into bankruptcy, dismantle the unions, cut the pensions and medical benefits, change the hours of service provisions and get real with the organization. No fancy 'buy outs'. There is so much dead wood in this outfit, its pathetic, it makes it impossible to operate efficently.

Quit the bickering if it was AC/CDN or any other component. The game has changed. Best to start working together.

Been there, done that.