Originally Posted by LO 044 (Post 8929319)

Two recent interesting stories:
1. WestJet - https://www.cbc.ca/news/business/wes...irus-1.5578719
I didn't even know this rule existed. So any company in Canada that lays off 50+ people is required to give 4 months notice or essentially pay?

2. Air Canada - https://business.financialpost.com/t...old-says-union
Not surprised here but wouldn't the same 4 month rule apply as above for WestJet.

I'm curious what people think about this around the country. Frankly i don't know what to think about the above. It is not unexpected. I don't think my (publicly traded) company would even keep me around for 2-3 years. In fact some of my coworkers are on temporary lay off but from what i understand you can only do this for 6 months. After that, "decisions" will need to be made from what i have been told.

I don't think taxpayers money should bail out people that literally won't be working 2-3 years. EI is one thing but the CERB and wage subsidy is a bottomless pit. It is well documented. Being based in Alberta, i had read someone saying "hey when my i lost my oil job, all the environmentalists told me to go work at a wind farm or solar plant, why don't we do that to the airline workers" which i thought was an interesting point. Did the fisherman out east or the forestry workers in BC get 2-3 years in free pay for not fishing? They got money for retraining. Perhaps that should happen to the airline employees i dunno. I guess the auto workers got bailed out and how has that turned out. Off to Mexico. I haven't seen Elizabeth May or Yves Blanchet come out and say stop bailing out the airlines either although no one is surprised by that.

I'm curious what people's perspectives are on this. I'm still an avgeek at heart. To be fair i don't think the CFL should get government money either.

Originally Posted by casper (Post 8929434)

Nearly all of these companies are associated with critical infrastructure that other unrelated aspects of the economy depend on.

It requires 16 weeks or permission from the minister to use a shorter period.

Originally Posted by rbt (Post 8929389)

If you disallow loans or leasing aircraft, there will never be another new Canadian airline ever again.

Originally Posted by nname (Post 8929385)

If the company is financially responsible, they will need to cut cost and lay off every employee who is no longer needed. If the company is socially responsible, then they will be financially screwed. You can't have the best of both worlds.

Originally Posted by LO 044 (Post 8929439)

But the point is no one (ok mostly no one) is depending on airlines at this moment that's why the airlines schedule sits at 5% of what they provided pre-Covid. It's simply supply and demand. As soon as the 737 is overbooked, more flights and larger aircraft will be added. We're not funding a war effort. People simply aren't using this product so is it really critical? In fact cargo capacity was needed so many airlines around the world obliged with cargo flights using passenger planes no?

Originally Posted by LO 044 (Post 8929435)

Any government getting equity in AC or WS is not a good idea let alone any private company. Think of it, the government as any typical investor would want to maximize their return or at least get their money back. Since they control policies that limit or allow competition it is about as big of a conflict of interest as possible. But as is typical with any government entity it's easy to make decisions of "investment" because it's not their personal money.

Originally Posted by Truenorth00 (Post 8929444)

There is nothing irresponsible about loans or leasing aircraft. There is something to be said for companies in a sector so prone to disruption maintaining strong balance sheets and not prioritizing share buybacks and dividends over paying down debt. Seems to me that the equity holders got their rewards. Time for them to swallow the risk that goes with it.

Originally Posted by casper (Post 8929465)

I will give you the bad news. A substantial portion of publicly traded companies in Canada are owned by government controlled pension funds.

It is possible for the government to create firewalls between the political aspects of the government and the investment aspects.

I don't like the idea of the government just giving money to the airline without there being a requirement to pay it back or the current owners equity being diluted. They should not get a free ride.

In this case no reasonable investor would buy into an airline. Who is going to buy into an industry that has historically had marginal returns, is going through a massive downsizing and is unlikely to be profitable for the next 3 years. No one. If the government buys in its doing so to ensure there is an air transportation network to support a recovery when things open up again.

It is the same thing as the federal government buying trans-mountain pipeline. The government did it ensure the thing gets built not because it wanted to be in the pipeline business.

Originally Posted by casper (Post 8929467)

WS is in a weird situation. ONEX owns both WS and a major aircraft leasing company. You can guess who is going to underwrite any new leases that may come along.

Originally Posted by Djeffery (Post 8929529)

Yeah, there's a move Gerry probably wishes he could have back. He probably wakes up every day saying "Shit, I could have had the airline I actually wanted" lol.

Originally Posted by LO 044 (Post 8929470)

Do you believe that other companies that will not be profitable for even the next year will be bought into by the federal government? Is Trudeau buying into Reitmans and Aldo? Of course not. The government will say no because those businesses will not survive long term even with cash from the government. Well maybe that's something that should be thought about the airline business.

There will be an air transportation network regardless of government money whether that is AC or WS or someone else, that is for the market to decide. If the demand is there, supply will come from somewhere. As with many airlines around the world, leasing companies and aircraft manufacturers will not go after airlines as doing that will make things even worse for them with bankruptcy and returned planes that now no one wants or will take at a lower price.

As for Trans mountain, oy, let's not bring that up. The federal government has provided so many hurdles to the project that no private investor wanted to touch it and then Trudeau was forced to buy it. No one in Alberta was asking for this. The Trans Mountain owners laughed all the way to the bank with that one. Canada is the only country that shoots their own industries in the foot. Norway, US, Russia and Saudi Arabia are laughing all the way to the bank as well.

But good discussions and really interesting points of view from all. Good point about the pension fund. I think the Ontario Teachers have a hand in a lot of things. I wonder if they have stock in airlines though lol.

Originally Posted by hollywoodcory (Post 8929889)

Also AC put out a revised summer schedule press release. Curious if WS will do similar in the coming days.
https://aircanada.mediaroom.com/2020...oodwill-Policy

Originally Posted by hollywoodcory (Post 8929889)

Condor appears to have cancelled all Canadian routes, except for FRA-YYZ for 2020. [/url]

Originally Posted by nname (Post 8929947)

FRA-YXY is still bookable.

So 2 Canadian destinations remains... YYZ and YXY.

Originally Posted by casper (Post 8929592)

Consumers will still be able to buy clothing if a retail chain goes under. If the transpiration, communication, electricity/energy infrastructure is compromised the impact on a host of other industries is dramatic and will become a major problem.

Originally Posted by Truenorth00 (Post 8929980)

This is fearmongering. Air Canada or Westjet could declare bankruptcy tomorrow, zero out the shareholders and have the bondholders take over the airline and relaunch in weeks.

Originally Posted by craneSpotter (Post 8930049)

I don't believe passenger airlines are 'essential' services. They are mostly used for convenience and leisure.

Originally Posted by craneSpotter (Post 8930049)

Airport authorities have a reckoning coming, too. Many will soon run out of operating funds for the year and have to decide on how to significantly cut costs - they can't borrow for long to keep excess operations going. Many are carrying large debt, too. Maybe result in some airport terminal and operations downsizing.

Originally Posted by hollywoodcory (Post 8929889)

Condor appears to have cancelled all Canadian routes, except for FRA-YYZ for 2020.

Also AC put out a revised summer schedule press release. Curious if WS will do similar in the coming days.
https://aircanada.mediaroom.com/2020...oodwill-Policy

Originally Posted by nname (Post 8929947)

FRA-YXY is still bookable.

So 2 Canadian destinations remains... YYZ and YXY.

Originally Posted by casper (Post 8929434)

Key thing to remember with labour law is there is federal and provincial labour law. Depending on the the industry an employee falls under the federal labour code or they fall under the provincial code. They don't fall under both.

Federal labour law only covers around 10-15% of workers in Canada. Basically federal government, federal crowns, and anyone working for chartered banks, nuclear, cable TV/phone companies, pipelines, ports or transpiration (airlines, railways, trucking) if the company operates across provincial boundaries.

The definition of what is federal vrs provincial comes down to being in the "national interest". Nearly all of these companies are associated with critical infrastructure that other unrelated aspects of the economy depend on.

It requires 16 weeks or permission from the minister to use a shorter period.