Thursday, December 20, 2007

Air Canada – Canadian Airlines Pilot Merger, a chronology of events.

This should be the last update of a posting from October 2005 adding the more recent merger-related events.

With the recent dismissal of ACPA's case by the Supreme Court, no further avenue exists for appeal and the Keller award of June 2003 stands.

Air Canada pilots aka OAC (Original Air Canada) pilots are represented by the ACPA (Air Canada Pilots Association) merger committee.

The Canadian Airline Pilots aka OCP (Original Canadian Pilots) are represented by the ALPA (Air Line Pilots Association) merger committee.




November 29, 2007
The Supreme Court of Canada denies ACPA's application for leave to appeal from the judgments of the Federal Court of Appeal; Numbers A-144-06, 2007 FCA 241 and A-392-06, 2007 FCA 242, dated June 19, 2007, is dismissed with costs to the respondent Air Line Pilots Association.

June 19, 2007
The Federal Court of Appeal released two decisions in favour of ALPA:
  • The application for judicial review by the Air Canada Pilots Association (ACPA) is in respect of Decision no. 349 issued March 10, 2006 (Decision 349) by the Canada Industrial Relations Board was dismissed. (2007 FCA 241) A-144-06, Date: June 19, 2007
  • The application for judicial review by the Air Canada Pilots Association (ACPA) is in respect of Reconsideration Decision no. 360 issued September 1, 2006 (Decision 360) by the Canada Industrial Relations Board was dismissed. (2007 FCA 242) A-392-06, Date: June 19, 2007
Costs payable by ACPA to ALPA in both decisions.


September 1, 2006
The Canadian Industrial Relations Board issues Decision 360 dismissing an ACPA request to reconsider Decision 349 issued on March 10, 2006.

In part the Board stated:
  • [21] The original decision at paragraphs 106-108 gives some indication of what might result in a legitimate change to the collective agreement’s seniority terms. What, in the face of this request, perhaps needs greater emphasis is what will not. An integration of seniority lists involves competing interests, particularly where there is a majority group and a minority group. If the process simply involved letting the majority choose their preference without regard to the competing rights and interests of the minority, a solution would be easy to find, albeit one, in all likelihood, unpalatable to the minority. The reason why this matter was so complex, and why the parties ultimately decided to accept final and binding arbitration, was precisely because a “might makes right” majority rules approach was inadequate and unacceptable given the statutory scheme and the various competing interests.

  • [22] What follows from this is that “emerging labour relations difficulties,” that are little more than efforts to impose the majority will so as to diminish minority interests, will not serve as a sufficient reason to change the seniority provisions agreed upon by all (albeit through arbitration) and put in place to balance those majority or minority interests.

June 29, 2006
The Supreme Court of Canada denies ACPA's application for leave to appeal the February 15, 2006 Federal Court of Appeal decision upholding the Federal Court Trial Division's decision, which upheld the Keller award. Costs to the respondent, Air Line Pilots Association.

March 10, 2006
The Canadian Industrial Relations Board issues Decision 349 denying ACPA and Air Canada's request to consider whether the Teplitsky recommendations would violate the Canada Labour Code.

The Board stated that:
  • [101] In the Board’s view, the primary purpose of the Teplitskly mediation exercise was to undo in part the Keller award and to change the seniority rankings of the former Canadian pilots in a fashion that would be acceptable to some of the pilots in the protest groups. In the Board’s view, it was no coincidence that the mediation exercise took place shortly after the failed ratification vote and at the same time the aircraft acquisition arbitration took place.
  • [102] When reviewing the Teplitsky Report, one must keep in mind that the initiative was essentially a one-party mediation. ACPA and ALPA had been the main parties to the ongoing seniority integration conflict. However, ALPA was not present at the mediation table. Its reasons for declining to participate in the exercise do not appear to be unreasonable. Without ALPA at the table, Mr.Teplitsky did not have the benefit of receiving submissions from the party that had represented the former Canadian pilots for the past five years in proceedings relating to seniority integration.
  • [103] Similarly, the Board is satisfied that ACPA and Air Canada’s section 16(p) request is a disguised attempt to have the Board do indirectly what it has already said it has no jurisdiction to do directly. What the Boardis being asked to do is to consider whether recommended changes to the Keller award are in violation of the Code. Since the Board has already decided that the award is final and binding and that it has no jurisdiction to review any of the terms of the Keller award, it should come as no surprise that the Board is not prepared to review recommended changes to those terms.
  • [104] It is for all these reasons that the Board is of the view that section 16(p) request constitutes yet another attempt to undo in part the Keller award.
  • [105] The second reason it would not be a proper use of the Board’s discretion to embark upon the section 16(p) review is that to do so in this case would be to set a precedent that the Board is not prepared to set. Were the Board to undertake the review, it would: 1) be taking part in a process that could result in a final and binding arbitration award, involving three parties, being amended by recommendations from a mediation process that was initiated by, designed by, and had as participants, only two of those three parties; 2) be legitimizing a process that might ultimately be used to put in jeopardy the other post-merger arbitration awards that set the seniority lists for employees in other bargaining units at Air Canada; and 3) be providing its views on the legality of recommendations flowing from a private mediation process, that was neither authorized, nor ordered, nor sanctioned by the Board. The Board is not prepared to establish such a precedent.
  • [106] The Board’s dismissal of ACPA and Air Canada’s section 16(p) request should not be interpreted to mean, however, that the seniority list in their collective agreement can never be changed.
  • [107] What the dismissal means is that ACPA and Air Canada, acting alone, cannot change the rankings of the former Canadian pilots on the seniority list because of a perceived unfairness on the part of some of the other pilots in the bargaining unit. It means that the Keller award, which sets the post-merger seniority rankings for the pilots at Air Canada, is final and binding. It also means that the seniority integration list, now in the pilots’ collective agreement, will continue to determine the seniority-related rights and benefits that each pilot in the bargaining unit is entitled to.
February 15, 2006
The Federal Court of Appeal dismisses ACPA's appeal of the Federal Court Trial Division's decision to dismiss ACPA's application to quash the Keller Award with costs to the Air Line Pilots Association. Source:formercanadianpilots.ca

November 10, 2005
The Supreme Court of Canada dismisses ACPA's application for leave to appeal the Federal Court of Appeal decision upholding CIRB decision 263 with costs to the Respondent, Air Line Pilots Association. Source:formercanadianpilots.ca

October 12, 2005
Former Canadian pilots issue a news release confirming their refusal to participate in a new Air Canada mediation on pilot seniority issue:
  • "Re-opening the seniority issue is simply Air Canada responding to what amounts to blackmail by its former Air Canada pilots, who the company wants to appease so they will accept the acquisition of new Boeing 777/787's," Captain Robert McInnis, who represents 1,200 former Canadian Pilots and chairs the Former Canadian Pilots Integration Committee said. "In 2003, Air Canada management, original Air Canada pilots and former Canadian Airlines pilots all agreed that the pilot seniority award of Arbitrator Brian Keller would be 'final and binding'. This move shows a troubling disrespect for the law. We trust the CIRB (Canadian Industrial Relations Board) will unequivocally reject this appeal."
  • "In the unlikely event that the CIRB agrees to re-open the issue, it would be a dangerous precedent that could jeopardize the seniority awards of all other Air Canada unions, all final and binding arbitrators' awards, and all CIRB decisions," McInnis added.
September 29, 2005
ALPA issues the following discussion paper to assist xCAIL pilots in their lobbying efforts:
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September 25, 2005
ALPA issues a news release indicating:
  • ‘that Air Canada and ACPA both agreed in 2003 that their current seniority arrangement, known as the Keller Award, would be final and binding. "Both parties are being unethical and dishonest for their narrow self-interest; ACPA wants to push the OCP group as far down the seniority list as possible and Air Canada is pretending to assist ACPA so that they can re-activate their new aircraft order. This has nothing to do with fairness…’
September 23, 2005
ACPA issues a news release stating:
  • "The decision to begin the mediation process was approved by ACPA's Master Executive Council today," said Captain Kent Wilson, President of ACPA."We sincerely hope that, Mr. Teplitsky, and the mediation process can bring the seniority issue to a final settlement," said Captain Wilson. "For the pilots and for the Company, we must resolve the issue in a fair way that allows us to move forward."
July 2005
Contrary to ACPA's news release, a poll of Air Canada pilots indicates 83% are opposed to the 777 deal due to the agreement's concessionary nature, 17% due to seniority issues.

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June 20, 2005
Subsequent to the failure of the 777/787 ratification in June 2005 ACPA issues a news release indicating:
  • ‘The Association notes that the proposed contract amendment failed to gain support, in large part, due to the ongoing dissatisfaction of a number of ACPA members over how the Air Canada and Canadian Airlines pilot seniority lists were merged after the two pilot groups were brought together in 2001.
May 20, 2005
The Federal Court Trial Division dismisses ACPA's application to quash the Keller Award on grounds that the arbitrator had violated rules of natural justice. Justice Dawson comments that "there is a public interest in bringing finality to this dispute". Source:formercanadianpilots.ca
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February 14, 2005
The Federal Court of Appeal dismisses ACPA's application for judicial review of CIRB Decision 263.
  • 'Relying upon its expertise and experience and the wishes of the parties, the Board concluded that its intervention was neither warranted nor justified. I agree with this conclusion. I would dismiss the application for judicial review with costs [to the Air Line Pilots Association].'
January 28, 2004
CIRB Decision 263 unanimously dismisses ACPA’s application to reconsider the Keller Award.
  • CIRB finds that ACPA is bound by the ‘final and binding’ commitment it had made and that Keller properly considered Decision 183. Keller Award is sustained.

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November 20, 2003
Decision of the Supreme Court of Canada refuses leave to appeal judgment of the Federal Court of Appeal.
  • 'Air Canada Pilots Association v. Air Line Pilots Association and Air Canada (F.C.) (29781) (dismissed with costs to Air Line Pilots Association)'
July 8, 2003
Ronald Pink, ALPA Nominee of Keller arbitration issues document citing reasons for dissent of Keller Award.

June 25, 2003
Menno Vorster, ACPA Nominee of Keller arbitration issues document citing reasons for dissent of Keller Award.

June 16, 2003
Keller Award is implemented by Air Canada

March 27, 2003
Unanimous decision of the Federal Court of Appeal sustains Decision 183 with costs to the respondent Air Line Pilots Association.

February 22, 2003
Air Canada, ACPA, and ALPA formally execute the ‘Keller Protocol’ with the provision that the decision of the arbitration panel will be:
  • ‘for all purposes final and binding and the seniority list resulting from the decision will be the seniority list that shall be implemented by the parties’ subject only to the judicial review by the courts.
Keller protocol:

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July 10, 2002
CIRB Decision 183 quashes Mitchnick Award

March 31, 2001
Arbitrator Mitchnick issues his award to merge the two pilot groups.

January 4, 2000
Air Canada buys Canadian Airlines International

Thursday, November 15, 2007

Jazz and the capacity purchase agreement.


Airline analyst I am not. Add to the list of 'things I don't get' are financial statements of airlines. Here we look October 2007 airline revenue and costs for many of the worlds bigger airlines. The data is sliced and diced a couple ways that I hope is understandable.

Graphed are the airlines arranged from the highest expense per ASM airline to the lowest. Not surprisingly the 'low cost' airlines (L) are clustered at the bottom of the graph which indicates they indeed meet the definition 'low cost'. Easyjet is the exception but they likely are 'low cost' in Europe compared to their mainline European competitors.

The regional airlines (RE) are not in a cluster and spread out among the mainline carriers (ML). Not a surprise that some of the regional carriers have higher costs per seat mile than mainlines, they have fewer seats to spread their costs over so their costs per ASM are sometimes higher.

Looking at Jazz:

Air Canada pays Jazz via a capacity purchase agreement (CPA) for flights successfully flown on routes requested by Air Canada. And it looks like Air Canada pays very well.

Jazz's costs are 40% higher than the nearest regional airline in the US so Jazz needs lots of money thrown at it to keep it's operation profitable.

But at who's expense? Many AC mainline employees feel that Air Canada mainline revenues subsidize the Jazz operation on many routes. This isn't to say that Air Canada doesn't need a regional operation. Air Canada cannot serve every low-traffic market itself. It needs a regional operation.

But in many markets where Jazz competes directly with a Westjet 737 (think Toronto - Saskatoon) why not an Embraer instead at a lower system cost?

What about Calgary-Houston where your choices are a Continental 737 or a Jazz RJ 705? Is this good marketing or a stop gap measure?

Which leads me to this question. What is the incentive for Air Canada to pay Jazz so much for the CPA?

At one time Air Canada owned 100% of Jazz so paying Jazz was like moving the money from the left pocket of your jeans to your right pocket. Not so anymore. ACE/Air Canada has continually sold off Jazz to the point where in now owns only 20.1% of the regional airline.

This makes me wonder what lies ahead for Jazz and it's CPA with Air Canada. Where is the incentive to keep the CPA as generous as it is now?

Negotiations for the 2009 - 2011 CPA rates are scheduled to start next year between Air Canada and Jazz.



The table below looks at the same data plus the margin (rev-exp).

Jazz has a great margin because it's paid well for what it does. I'm not trying to run the airline and I'm sure I don't understand the 'big picture'. But what I do want to know is this. Who is paying for Jazz's continued success and is the deal fair to Air Canada and it's employees?



Related information:
Jazz Capacity Purchase Presentation

Wednesday, November 14, 2007

Still here...just busy

Yep I'm still alive but busy with other top secret 'net projects.

If you've stopped by for a read of something new I'd like to point you to this guy, Patrick Smith, who tells a great story about the wild and woolly world of airline pilotage.

Ask the Pilot - the archive

Monday, September 10, 2007

Where icebergs are born

Location: Approaching 73 degrees North/60 degrees West
Altitiude: 38,000 ft.
Route: London Heathrow to Vancouver, BC

As we approach Canadian airspace to the west the clouds below dissipate and we are greeted with a view of the northwestern Greenland coast and Baffin Bay beyond.

The view couldn't be prettier on this September afternoon. Below the Greenland icecap slowly moves toward the ocean to break into great chunks and eventually drift 2000 miles south to Newfoundland.

Its hard to grasp the scale of the icebergs or the glacier below from 6 miles above, harder still from a picture.



















Tuesday, September 04, 2007

Google Earth hides a flight simulator



I love Google Earth.

Not sure if I love it anymore because of this but it was surprising to discover there is a 'flight simulator' hidden in the coding. I recently downloaded ver 4.2 and it is indeed there. Haven't flown it yet. In fact I have to pack and go to work so maybe in a couple days.

To access the flight simulator:

1. Open Google Earth (duh)

2. In a windows system press CTRL+ALT+(Capital)A

3. Follow the pop-up menu instructions.

I tried the first time from somewhere far above the planet and nothing happened. So the trick must be to get down near the surface and then it worked for me. Also, to get the (Capital) A press 'Caps lock' then do the CTRL+ALT+(Capital)A thingy. It's more complicated than loading a plan into the FMGC but you can do it! I know you can.

Download Google Earth and other handy placemarks here.

Here are the keyboard shortcuts

Away you go...Have Fun and thanks Google!

Sunday, September 02, 2007

Vertigo is back



This video has been on and off the 'net a few times. Fly4Fun originally made this video "A pilots eye view of a 3 day trip". It's been reposted again on Youtube by another user.

All the elements of 'the trip' are there. Right down to the jetlag wakeup at 2AM when you really want to sleep for another 6 hours.

You'll want to turn the speakers up for this one.