Air Canada has refused to reopen labour talks with its pilots, which has triggered a ratification vote on a tentative deal that calls for a new discount leisure airline (The Globe and Mail/CTV, 29-Apr-2011). The Air Canada Pilots Association (ACPA) will announce Monday that it will forge ahead with the vote because management declined to discuss revisions sought by union negotiators. ACPA stated it is unanimous “in the belief that the tentative agreement must be sent to the pilots for a vote so that the democratic process is upheld. Therefore, the ratification vote for the tentative agreement will commence May 9.” Air Canada’s proposed LCC offshoot is planned to launch in winter and will target vacation destinations in Europe, Mexico and the Caribbean.
Air Canada pilots’ contract uncertain with discount carrier
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Airline strikes: 2016 a peak year for Europe's legacy airlines. Wakeup time, as LCCs pick them off
Pilot strikes at Lufthansa. Again. A strike ballot among British Airways cabin crew. A guilty verdict for Air France workers who assaulted an executive during a union protest. These were all headlines in late Nov-2016, following Air France pilot and cabin crew strikes in summer 2016. Labour relations at Europe's three biggest legacy airline groups are an ongoing challenge.
A CAPA report in Jun-2016 highlighted the growing number of articles on CAPA's website mentioning the word 'strike'. It raised the possibility that if the rate continued through the year, 2016 could be the biggest year for strike-related articles since before the global financial crisis. With a little under a month still to go, this year has already comfortably passed this milestone.
To a large extent labour unrest grows as airline industry profits increase. However, rather than hoping for an industry downturn to reverse the rise in the cycle of strikes, airline CEOs are talking tough – a line long taken by IAG's Willie Walsh. Lufthansa's Carsten Spohr has said that taking on the pilots is "about the future of Lufthansa", noting that it has “no chance of survival" if it gives in to pay demands (Bloomberg, 24-Nov-2016).
Canada’s government paves the way for ULCCs Enerjet and Jetlines to jump into the marketplace
Two of Canada’s aspiring ultra-low cost airlines made a major breakthrough in Nov-2016 after they were granted exemptions from foreign ownerships restrictions, which allow foreign entities to hold up to 49% of Enerjet and Jetlines. Now Enerjet has taken on some heft by partnering with the global ultra-low cost airline investor Indigo Partners, which was instrumental in Spirit Airlines’ ULCC transition and now owns the ULCC Frontier Airlines. Another new Canadian ULCC, NewLeaf Travel, boasts former Spirit Airlines CEO as chairman of the board.
It is tough to predict how those influential backers will affect the outcome of efforts by the new crop of ULCCs to successfully execute the model in Canada. Although Canada is one of the few mature aviation markets without a true ultra-low cost competitor, the nuances of the Canadian domestic market could create challenges for the long-term viability of NewLeaf, Enerjet and Jetlines in the marketplace.
Jetlines and Enerjet, operating as FlyToo, aim to debut in Canada’s market during 2017. Unsurprisingly the country’s two airlines Air Canada and WestJet plan to compete vigorously with the start-ups, with WestJet vowing to defend its franchise and match the fares of its new competitors.