Originally Posted by Ken hAAmer
On the other hand they were responsible to anticipate and prepare for such eventualities, even if they didn't know specifically what the eventualities would be. That's why they get the big bucks.
It would appear that they neither anticipated or prepared for anything other than business as usual. Something that a McDonald's fry cook could just as easily not anticipated or prepared for.
If I ever meet the McDonald's fry cook who could have predicted that an unknown disease called SARS would leap out of Asia and establish itself in one city outside of Asia - which just happened to be AC's world hub - and in the process destroy most overseas and US travel to Canada for almost a year, well, I want to make that fry cook prime minister.
Listen, Milton has responsibility for the merger. I think AC should have let CP die. And when Milton completed the deal, he did a poor job of managing the service issues. Not that the unions didn't hold a gun to his head, demanding big cash bonuses (extortion money) for integrating the work force. Fact is, the feds made it impossible for AC to do what it has now done under CCAA - open up labor agreements to make them more productive and to cut tens of thousands of jobs. If memory serves AC had about 46,000 jobs in 2000. Now it has about 28,000, I think. That's revolutionary. But it wasn't going to happen without a crisis because first the feds and then some of the unions (read CAW) had no layoff clause that could only be broken under threat of liquidation. So the truth about Milton probably resides somewhere between "it's all his fault" and "none of it is his fault".
What I do know is that AC has gone from a laggard into the forefront of online booking. That's taking out thousands of CAW jobs at an accelerated rate. Ditto with Kiosks. AC's fare structure, if not its cost structure, is now very much like the low cost carriers in both dollar terms and in how fares are priced and booked. There are a lot of good values out there and I am enjoying them.
Moreover, AC can't be such a bad airline because the public hasn't abandoned it despite all of the dire predictions and media bashing. Look at WJ's May numbers out today. A big load factor drop attributed to chasing higher yield. In other words, WJ gambled that travellers would abandon AC during the latest crisis, pay more to fly WJ, and it didn't happen.
Since the Onex bid, I can't think of a single quarter in which AC has been operating under normal business conditions. The merger was followed by the economic meltdown and then September 11. Things were still in recovery mode in the summer of 2002 - with everybody edgy about flying - when the buildup for the Iraq war began, to be followed by SARS. All the while, WJ and SG are growing like weeds.
We may get a truer test of what AC can do when it emerges from CCAA. If the intl travel market doesn't get beaten down by more terrorist trouble - a big if - and the stronger economic period we appear to be entering is a good solid one, it will constitute "a normal market". Business travel may not be as robust as it was in the late 1990s, but I would expect in a normal market that it will be stronger than it was the past couple of years.
At that point, I'll be looking for three things in particular from AC
1. A commitment to regain the confidence of employees with the quid pro quo emphasis on good service.
2. A commitment to the customers in the form of a major investment in the product, including cabin interiors, maybe inflight TV in economy, etc. I want to see the A340-500 product go across the international widebody fleet
3. A further round of intercontinental expansion beyond what has already been announced for 04.
I'd also like to see a bold, positive TV image campaign and perhaps a new livery. I don't expect all of these intiatives to be completed in the next 12 months, but I'd like to see action initiated in all of these areas by late 2005.