"Air Canada chief should be grounded"
http://www.nationalpost.com/financialpost/story.html?f=/stories/20010925/704454.html
AC put Canadian Regional up for sale at any price and there were no takers. There would still have been no takers if foreign investment were permitted. And even if Air BC and the other AC regionals were added to the package.
Yes, AC management ****ed up. They agreed to the government's scenario to save CP, and the 15,000 jobs that went with that carrier. They negotiated a rich set of labour contracts to buy peace with their unions until they could digest CP. When all this was happening, Clinton was in the White House and the economy was strong and everyone to a lock step tune forecast ongoing growth. Hence, AC management and board felt confident to agree with "no layoff" provisions with their unions and the government because the airline could finance it all through growth.
Just about everyone in the world accepted the growth scenario in just about every business. All the US and world carriers were forecasting similar rosy scenarios. Then Bush got elected and the economy tanked. Then Septebmer 11th arrived and just like during his daddy's Gulf War, passengers deserted the airlines and travel and all those rosy foecasts collapsed.
Yes, there is a lot of blame to toss around, but it can't all be placed in the hands of Milton and company. Even I have been a longtime critic of the way AC's managerment team is unaccountable because of the broad shareholder base and essentially closed board of directors.
But it is too easy to spread the blame as it has been in The Post and The Globe these days.
So FlyerAl, enough. Get your business degree, or whatever it is you are up to, and go run a company yourself to see what the real world is like. Meet a payroll. Go raise a few million. Go sell a product. But stop taking pot shots from the peanut gallery.
Remember -- he is building a great airline for Canada!!!
Don't you remember during all the Cdn Air kerfuffle? He kept reminding us that he is "building a great airline for Canada."
The man is a genius. He knows he is building a great airline for Canada! I am sure we will see it sometime!
We just don't know when. But when it arrives, it will truly be a great airline for Canada!
Robert Milton! The Man Who is Building a Great Airline for Canada (TM)
-- "our shareholders...will benefit from the strong growth potential of one of the world's great airline franchises." Air canada Press release, 11/8/99
-- "I still do not believe that it reflects the true value of one of the world's great airline franchises.." Robert Milton, the man who is building a great airline for Canada, Air Canada press release, 10/29/99
---"one of the world's great airline franchises..." Air Canada's president and chief executive officer, Robert A. Milton, Canada Stockwatch, 11/04/99
Foreign carrier finds a good "Joe Canuck" who wants to run an airline [there are lots of them around] and "loans" him/her the money to buy CRA in exchange for a service contract to feed their traffic to the Foreign carrier.
...
Mr. Milton then defied Ottawa in clinging to the networks of regional carriers that fed Air Canada and Canadian with passengers
As if waiting for CP to expire was an option. And he was going to do what, exactly, with the regional carriers?
I'm not Robert Milton's biggest fan, and I don't disagree with everything the author says, but this article does have a slanted view of how AC got into this mess. Of course we must remind ourselves that the Post is now Liberal Red, not Black.
andrew
[This message has been edited by Andrew Webber (edited 09-25-2001).]
Remember, Air Canada is reporting that advance bookings are down 30% and recent bookings are down 60%. They should be worried; they have long term labour contracts and lease payments to pay.
They do own a lot of older planes, and these can be parked at relatively little expense. It sounds like this is what they will do. Rather than counting on federal money to continue flying their current schedule, they should adjust their flights to meet the demand. At the same time, it never hurts to see if the feds will give them a handout.
[This message has been edited by StuMcIlwain (edited 09-25-2001).]
If I'm not mistaken the ownership rules cover the source of the money not just the name of the management. That's why the Onyx bid could only rely on less than 50% of AA's money.
The big question becomes, who will now put risk capital into the airline industry as it is currently constituted? Nobody [except governments, who have actually always done so under a variety of means]. Which means a major rethink is in order south of the border.
The trim back in capacity -- something AC management started months ago -- on both domestic and international routes will also mean less competition. Each carrier must now concentrate, not on taking market share from one another by flooding the market and cutting prices, but rather by courting its loyalist regular customers. There will be a stasis for a year or so, until things stabilize on the new level of realistic ops. This is why FF programs now become key to maintaining customer loyalty, and likely why AA decided to extend elite status another year.
What we have seen over the past decade is a situation much like the beer wars. A couple of major brewers selling the same product to fewer customers, trying to shift a percent or two of market share. It becomes a fools game when people stop buying beer, and the brewers keep on turning out more than they can realistically sell.
-- "our shareholders...will benefit from the strong growth potential of one of the world's great airline franchises." Air canada Press release, 11/8/99
-- "I still do not believe that it reflects the true value of one of the world's great airline franchises.." Robert Milton, the man who is building a great airline for Canada, Air Canada press release, 10/29/99
---"one of the world's great airline franchises..." Air Canada's president and chief executive officer, Robert A. Milton, Canada Stockwatch, 11/04/99
I see the word "franchise" kicked around so much by Air Canada that I half expect them to be selling red maple leaves and green paint, instead of tickets!
Check out our "franchises":
United Air(CANADA)lines
American Air(CANADA)lines
America(NADA) West
Air C(ANA)da
Mexicana(DA)
Lufth(C)an(ADA)sa
http://www.flyertalk.com/forum/smile.gif
If I'm not mistaken, several oneworld carriers - including AA and BA - were interested in buying Canadian Regional Airlines to be used as a feeder to major gateway cities, but the government was unwilling to change the ownership rules at the time.
The only mistake that I see him made was trying to grow too fast and incurring major costs while trying to merge 2 major airlines.
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