Air Canada: Fly it Right!

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Six years of non-stop restructuring has failed to produce a successful airline. Workers have disproportionately and unfairly borne the brunt of ACE and Air Canada's misguided efforts.

While Air Canada workers have sacrificed to make the airline successful, Robert Milton and investors have filled their pockets to the tune of $2 billion, money that came from stripping the company's most profitable assets: Aeroplan, Jazz and ACTS from its core business.  Milton personally has received   tens of millions of dollars   in compensation as well as multi-million dollar pensions.

Since the end of 2000, Air Canada has reduced its total full-time equivalent staff by 47%, resulting in a loss of over 20,000 jobs (from almost 45,000 jobs to 23,600 today). After entering CCAA, CAW members have borne a disproportionate share of job losses - a drop from 6,400 jobs in 2003 to 4,100 jobs today, equal to 36% of Air Canada CAW members. Airport terminals and reservation offices are now grossly under-staffed causing real hardship for the existing workforce and stress for the traveling public.

Dramatic action is needed to ensure our national carrier remains a viable airline and traveling resource for all Canadians. We need a flag carrier that Air Canada employees and Canadians can feel proud of.

The CAW is calling on the federal government to:

1. Block the wind-up of Air Canada parent company ACE Aviation Holdings.
Since its creation in 2004, ACE has irresponsibly sold off the profitable sections of the Air Canada group, including Jazz, Aeroplan and others, with no regard for how this would impact the core business. An ACE wind-up would move further funds out of Air Canada's reach, leaving the airline even more vulnerable.  The remaining assets of ACE should be invested back into Air Canada.

2. Stop further payments to Robert Milton.  Milton has already walked away with $50 million since CCAA - his reward for stripping and selling off Air Canada's profitable units and leaving the core business to flounder. Milton should give back his bonuses. If the ACE wind-up is successful, Robert Milton stands to gain another $10 million. Milton's payout must be stopped and his past excesses returned to the company.

3. Require Air Canada to fully fund its pension obligations, and establish a federal pension guarantee fund to back up pension promises.  Air Canada must be forced to fund its plan over the long-run - and it cannot "hide" the wealth (in ACE or the spun-off business units) to avoid its pension obligations. Like other jurisdictions (including Ontario and the U.S.), the federal government must establish a pension guarantee system to backstop pensions when companies are in trouble.

4. Re-establish smart regulations on airline capacity.  Canada's airline industry has been in non-stop crisis since the late 1980s, when the government deregulated the industry and removed any caps on flights, routes and fares. The result has been a destructive cycle of excess expansion, overcapacity, losses, and bankruptcy.  Until fair rules are in place which ensure a stable, reasonable growth of capacity, the overall airline industry will continue to falter.

5. Take an ownership role in Air Canada. Canada is one of the very few developed countries without a public ownership stake in its national air carrier. Governments in countries such as Demark, Finland, France, Sweden, Italy, Singapore, New Zealand have anywhere from a 17.8% share (Air France) to a 76.7% share (Air New Zealand) in its national airline. The Canadian government must take an ownership role in Air Canada to preserve our national carrier that links our communities.

Canadians need progressive, realistic solutions to the airline's major problems.