D'Arcy from Winnipeg
Solution Architecture, Business & Entrepreneurship, Microsoft, and Adoption

Air Canada Will No Longer Be My Airline

Monday, March 19, 2012 6:36 AM

If the constant labour disputes at Air Canada (the most recent being a week ago where pilots were locked out and mechanics and bag handlers were poised to strike) weren’t enough to make me reconsider moving all my flights to West Jet, this latest twist definitely will.

CBC reported that Aveos, a privately held company that has the contract to provide maintenance for Air Canada, had suddenly and without notice shut its doors (read the story here)

There’s something missing from the stories currently online though. Months ago, Air Canada gave their Winnipeg based maintenance staff an ultimatum – stay with Air Canada but be forced to relocate to a different city, or switch from Air Canada to Aveos and stay in Winnipeg.

So all of those staff that Air Canada pushed into Aveos just so they could stay in Winnipeg are now out of a job with huge uncertainty around their future.

Labour disputes that rise up continually and hamper personal travel and business, questionable timing of business decisions and the resulting impact on individuals…there’s too much drama in that company for me to rely on it for my travel needs. WestJet it is moving forward until Air Canada gets their act together – which probably means its WestJet for the foreseeable future.

D




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# re: Air Canada Will No Longer Be My Airline

Perhaps you should petition the government to force the other Canadian airlines to play on the same playing field as Air Canada?

Did you know that AC has no choice but to have it's head office in Montreal? Even though they are a 100% private company (not government owned at all), the federal government has legislated the head office location. AC can't move their head office without breaking the law.

Did you know that AC is federally legislated to run their entire business (not just the customer facing positions) bi-lingually? Everything communicated in writing for internal consumption must be both in English and French. How many businesses, let alone other airlines must do that? Heck, the only organizations that I know of that do that are the Canadian Government and the Government of New Brunswick.

The fact AC told Winnipeg based mechanics to move to the spun off company or move to a different location is a fact of business. AC has a contract with Aveos until 2014 for aircraft maintenance. That's still 2 years away. If Aveos, a separate entity from AC, is filling for bankruptcy now I think that suggests more that it is a money losing business at its heart or a mismanaged business. AC is still willing, and contractually obliged, to give them business. If Aveos can't keep their own doors open, how is that any fault of AC?

I think you're barking up the naive business tree dude. 3/19/2012 12:52 PM | Donald Belcham

# re: Air Canada Will No Longer Be My Airline

No doubt Air Canada has a very different history than most companies, which plays into how they operate. Some of what you bring up is a little dramatic though. Even though they have HQ in Montreal, most of the staff has been moved to their Toronto offices (so Montreal is more a token HQ than anything).

Regardless, the issue is that AC forced staff to relocate or stay but become employees of an entirely separate company - a company that now has locked their doors and all those people are now out of work. This raises the question - how much did AC know about the state of Avero's business? Did they hang their staff out to dry, seeing this as an easy way to trim their numbers? I would hope not, but I also know how toxic the environment is there (a close friend was one of the ones that chose relocation).

D 3/19/2012 3:35 PM | D'Arcy from Winnipeg

# re: Air Canada Will No Longer Be My Airline

I hate air Canada. I hate their business practices and I hate the fact that our tax dollers have been used to keep them afloat. I have never had a good experiance on air Canada. 3/19/2012 4:53 PM | Ryan Gibson

# re: Air Canada Will No Longer Be My Airline

How is it dramatic? Every thing I said is a fact that can be confirmed by a little research. If you think that the comments about AC being federally legislated to HQ in Montreal and be 100% bilingual are overly dramatic, consider this: how much impact would legislation forcing your company's head office into an extremely high tax province and forcing bilingualism onto it have? Sure the office could be a shell, but the one you work at in Winnipeg would have to operate in the exact same manner. I suspect that even you can't justifiably say that there would be no impact to finances, operational efficiency and staff interaction.

I did leave out one thing in my initial comment. Aveos was spun off of AC and only a couple years later it was saved from bankruptcy by some investors (this is when it changed its name from ACE to Aveos). If the employees (yes they were ACE/Aveos employees at that time) hadn't seen some writing on the wall at that point, then isn't there a certain amount of "shame on them" to be had?

Let me ask you this. If your current employer spun off it's entire .NET practice and said, you either get to join that company in Winnipeg, or you get to move to our new base of operations for your skillset, would that be wrong? I highly doubt you'd say it was. It's not like they took your job away. You still have it, just for a different company...plus you get a choice; work for A or work for B. That, my friend, is the reality of business. If people continue to think that their employers owe them and try to force that thought, the employers will continue to slowly slip into oblivion. Ask the folks at the Cat plant in Ontario how that worked out for them.

If you really want to know the obligations that AC had to the folks at ACE/Aveos, read up on the agreement that was made when the entity was spun off. If AC initiated and early end to the agreement between them and Aveos which caused Aveos to go bankrupt, AC would owe every former AC employee at Aveos 2 weeks of backpay for *every* year that they were employed by AC *AND* Aveos. That really seems like a shitty deal doesn't it?

It's too bad that Aveos couldn't figure out how to be a business that needed to suck from it's former mother's teat. It wasn't able to land significant deals from other airlines. Why was that? Possibly they cost too much...possibly they didn't have the quality levels those potential customers wanted. Either way, it points back to the business model not working. That could be because Aveos was mismanaged or because it's workforce wasn't capable or affordable in the current market.

To the other people commenting about their hatred for AC...lemme ask this: when was the last time AC took a bailout from the federal government? Come on....point it out with hard fact. The last money they got from the Federal government was a loan that has been fully repaid. Yah...that means us taxpayers are out nothing...in fact we're ahead if you consider the interest included in repayment.

I understand that it's a national past time to hate Air Canada, but you people really need to get your fact straight before spouting off. 3/20/2012 12:51 PM | Donald Belcham

# re: Air Canada Will No Longer Be My Airline

One final note. If this isn't AC doing their part for a completely separate entity, then I'm not sure what is.

http://www.stockhouse.com/News/CanadianReleasesDetail.aspx?n=8456104 3/20/2012 1:24 PM | Donald Belcham

# re: Air Canada Will No Longer Be My Airline

"If the employees (yes they were ACE/Aveos employees at that time) hadn't seen some writing on the wall at that point, then isn't there a certain amount of "shame on them" to be had?"

You missed the part in my original post where I said "MONTHS AGO Air Canada gave their Winnipeg based maintenance staff an ultimatum"

I'm not talking about long standing employees, I'm talking about people within the last 8 months who were told "Look, you can work for AC but you have to move or you can stay in Winnipeg but you have to become Aveos employees."

In your example with the .NET work, I would have taken the local job but started looking right away. But our industry is different from AC in that employees there don't have the freedom of switching jobs as often as we do, primarily because their pension is tied to completing their career with AC.

And before you start, I *hate* the entire pension system built into large companies. I'm so glad that my daughters will grow up knowing that their retirement and general financial health is their responsibility and not their employers. However, we have some dinosaurs that are on the brink of extinction and need to be dealt with.

So that goes back to my original thought - did AC move their staff to a dying company knowingly? Considering the article in today's Winnipeg Sun, it appears that Aveos is blaming AC in part because they pulled back on the volume of business - I wonder if AC's support for them is just a reaction to the agreement you quoted?

Business is business, things happen, people need to be able to move on. But companies can't just screw people over in the name of business. If moving AC employees over to Aveos,knowing they were in financial trouble, was just a way to avoid paying out pensions and trimming their staff, then AC needs to be held accountable. If not and it was just "bad timing", then so be it. 3/20/2012 3:39 PM | D'Arcy from Winnipeg

# re: Air Canada Will No Longer Be My Airline

On a completely different note, WestJet is not a viable choice for biz travel for me because they have no loyalty/status program. Sure they have the equiv of "points", but they have no status tiers that make frequent travel much more bearable.

If I ever have to switch from AC (and I've been seriously considering it lately, but for diff reasons) I think United would be my new carrier of choice. 3/26/2012 7:42 PM | Dylan Smith

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