AC creates LCC international carrier

Discussion in 'Air Canada | Aeroplan' started by milchap, Aug 8, 2012.  |  Print Topic

  1. milchap
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    milchap Gold Member

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  2. This will be a positive game changer for AC and have negative connotations for WJA.
     
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  3. mtlfire

    mtlfire Gold Member

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    It mentions they will focus on sun destinations in the US in most articles and above specifically mentions Las Vegas and Florida. Considering I can often do YUL-MCO for about $380 return all in, about the same for Las Vegas this past June, and about that once again in a few weeks for Phoenix... I'm curious just how much more "competitive" the fares can get. Or will this likely be about the same fares but more profit for Air Canada -- in which case, I'm not sure that's the customer benefit we were all hoping for.
     
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  4. canucklehead
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    canucklehead Gold Member

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    If they are going to go against Air Transat prices, prob a little cheaper than present. Wonder what the labour cost structure will be in comparison to Air Canada or Chorus.
     
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  5. mtlfire

    mtlfire Gold Member

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    Last year as I was waiting to board a US Airways flight, flown by one of their regional carriers, I had a chance to talk with one of the flight attendants. She was likely in her 50's and said he had flown most of her career with the mainline airline but after September 11th ended up being transferred to the regional carrier. She was expecting be be brought back to the mainline carrier in the next few months.

    I forget the exact numbers, but she made dramatically less with the regional carrier. I remember not only was it a lot less, but it was around the mid 20's and I actually felt bad hearing the story.

    Ultimately everyone one wants to fly for cheap, and everyone wants to save money, and there's not much pro union out there. Even I cringe when I heard those stories about 30$ an hour to pass a broom in a GM factory. But I don't think anyone wants their kids growing up making a fraction of what they made. There has to be happy medium for everyone.
     
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  6. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    LCC stands for Low Cost Carrier, which doesn't necessarily mean Low Fare Carrier :) Perhaps those $380 fares aren't exactly profitable with their current cost structure.
     
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  7. mtlfire

    mtlfire Gold Member

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    Exactly, but a lot of articles are spinning as a benefit of the customer. On many of the routes mentioned, I don't see how it can get much cheaper. Heck I can fly Montreal to Orlando on a T+ fare for less than Montreal to Toronto on most days.

    I think a lot of people might be disappointed as they equate good for consumers = cheaper. Granted, lower cost is good for the company which theoretically should be good for the consumer in the long run. I notice AC stock is giving back all its early gains over the last few days though, so the market doesn't tend to agree just yet.
     
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  8. I think we should wait for them to announce the exact business model they will pursue. I believe they will have a partner and they won't simply be focused on US leisure spots but also some overseas destinations.
     
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  9. southender
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    southender Silver Member

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    Game changer if you want the game to be fares and nothing else- I thought that was what charters were for? Little impact on my plans as the term 'leisure travel' is not in my lexicon...
     
  10. tomh009
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    tomh009 Gold Member

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    It appears that the 767s and A319s will all end up over at the LCC eventually. And Calin is saying that they might get rid of the E-jets as well (E-175s could go to Jazz). All right, they'll need fewer A/C as some of the destinations will be served by the LCC (New Tango? Tango+?) but they'll still need to replace most of the E-jets and A319s.

    Is the CSeries on the horizon? A319 NEO (as well as 737 MAX-7) seems too big to fit, not to mention that there are few production slots before the end of the decade.
     
  11. global_happy_traveller
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    global_happy_traveller Silver Member

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    I think the fleet transfer plan is to shift legacy employees away from the mainline carrier to lower cost carriers (in house or contacted)
     
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  12. It will be the other way around I believe. Legacy employees will stay at mainline and they will hire new non union employees under a new ownership structure
     
  13. global_happy_traveller
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    global_happy_traveller Silver Member

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    Actually i should correct myself..... "AC in its fleet redeployment plan is to layoff the legacy employees by reducing mainline service while expanding the LCC network with non union employees"
     
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  14. wrong again. They will not reduce mainline service. Part of the plan is to have two distinct levels of service.
     
  15. mtlfire

    mtlfire Gold Member

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    Other than a carrier that's based outside of Canada in some low unionization area of the globe, you won't avoid unionization up here. Its more likely that they will be unionized just with a lower pay scale, defined contribution pension or some form of group RRSP and less benefits. And especially a lot more management rights in regards to fleet and personnel flexibility.
     
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  16. Bear in mind that Canada has new temporary worker immigration policies that allow foreign worker to live in Canada as long as they have suitable employment and are sponsored. If they hire them as employees and then try to start a union they will be gone in a heartbeat. In any event there won't be DB pensions if any at all and wages will be lower for sure. As a lot of the flying in the LCC will be to seasonal locations watch for high seasonal turnover and possibly FA's from Countries that will be destinations for the planes.
     
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  17. global_happy_traveller
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    global_happy_traveller Silver Member

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    not reduce mainline service - we'll see...... they will sure say that now to keep peace amongst the workforce...but over time it will get adjusted as the market & cost structure warrants... will start chipping away to ACX and LCC......

    as for temporary workers...... the govt will also require the employer to tap into canadian talent first...and unless they are nowhere to be found then be able to import their own workers........
     
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  18. AC will use the mainline to increase service and fares and expand to new destinations with the 787 coming into service. The LCC will be a combo of WJA/Ryanair etc.
    As for temporary labor they nolonger need to prove the need. Canada has stated that we are undermanned in all occupations and the door is open. AC falls under federal legislation so no province can properly object to what thye might do. I'm doing some work in that environment other types of workers and know the rules reasonably well. Also Remember that the LCC may well be an offshore registered airline and not majority owned by AC.
     
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  19. global_happy_traveller
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    global_happy_traveller Silver Member

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    As per the newspaper interviews with AC, the 787 is to replace 767 and 330s. So by removing an additional 319s and E75/90 won't That be chipping away from mainline?
     
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  20. global_happy_traveller
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    global_happy_traveller Silver Member

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    Btw who on TOBB mention E's are going away? I don't see that mentioned anywhere
     
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  21. ACMM
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    This makes me shudder - it has created enough "work" for me to not fly Tango to Asia (and I have been very successful in that regard) but this LCC worries me if it takes over some mainline routes for cost effectiveness, It may be enough to have this kitty stop being a frequent flyer :) But then retirement is only a couple of years away given the markets so maybe I can relax with a keg or two somewhere :D
     
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  22. canucklehead
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    canucklehead Gold Member

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    the latter makes me shudder! I have never had as negative an experience as flying with Ryanair.
    I can only imaging the furor over being charged to checkin at the airport, printing of BPs, replacing BPs, shilling of magazines and lotto tickets on board.

    Hopefully whatever LCC forms is limited to sun destinations (or any destination I would not need to use AC)!
     
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  23. ACMM
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    I think you meant you would "not" need to use AC - like Saskatoon? :p
     
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  24. canucklehead
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    canucklehead Gold Member

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    corrected! :D
     
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  25. AC has clearly stated they will not reduce mainline flights. They may change from mainline to LCC for certain destinations in different seasons but the mainline would be going to other destinations that need more frequency at times.
     

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