Monday, May 30, 2011

Air Canada Discount Subsidiary – Does Anyone Really Believe it Will Ever Take Flight?

Earlier this year Air Canada announced their intent to launch yet another discount carrier, under an as yet to be determined name.  Apparently, they have not learned their lesson from their past failed attempts to launch and run a discount carrier.

After I initially rolled my eyes in disbelief, and stopped laughing, at the fact that Air Canada seems bent on their own self-destruction, (I mean really, how many times can the Canadian Government bail them out), I read the rest of the announcement and noticed what I consider the clincher, as it relates to why this venture will never take flight.  

Air Canada announced that the launch of their discount carrier would be contingent on the Air Canada Pilots Union agreeing to certain concessions and a two-tier arrangement, as it relates to the pilots of Air Canada and the pilots of the discount carrier.

As soon as I read that, I knew the deal was dead.  There is no way that the Air Canada pilots union will agree to anything out of the ordinary.  They have a long-standing history of drawing a line in the sand and then standing on “their” side of that line and daring you to cross it, at your peril.

Arguably, the Air Canada pilots union has not been the only Air Canada union body that has come close to forcing the airline out of business, on more than one occasion.  Flight attendants and customer service representatives’ unions have contributed equally to the near failure of this airline, but it has always been the pilots union that has been the most steadfast and obstinate in past negotiations aimed at keeping the airline aloft.

And then, just the other day, there was a story in the Globe & Mail (Labour dispute threatens to delay Air Canada discount airline), in which they stated; “Air Canada’s plans to launch a discount leisure airline next winter is at risk of being delayed after pilots rejected a tentative labour pact.”  “The rejection of the tentative deal casts uncertainty over the carrier’s proposals for starting a low-cost carrier and introducing pension reforms.”

Gee, what a surprise.

It’s a shame, because as a consumer I would love to see another discount carrier, to increase competition and maybe, just maybe, give us some addition cost-effective options when we’re planning that next trip.  And as a business person, I would love to see an opportunity to potentially make Air Canada’s business model more successful, and competitive as a carrier, not to mention creating hundreds if not thousands of jobs in an economy that could dearly use them.

But don’t hold your breath.  I’m laying odds that this discount carrier will never take flight.  Air Canada’s pilots union will make sure that this subsidiary stays grounded for the foreseeable future. 

It’s a perfect example of everything that is wrong with unions.

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