Originally Posted by
bid.shader
I mean, some of your questions have already been answered - they are being required to restart (in some fashion) those cancelled routes, so apparently that's unacceptable to you?
If the route is not profitable, then the airline should not be flying it (unless it funnels a sufficient number passengers to profitable routes). If the gov't wants to subsidize a flight in order to maintain air service to a smaller community, then go ahead. But taking an ownership stake in the company and mandating that the airline must fly to smaller communities at a loss is something very different.
Originally Posted by
bid.shader
If AC is the best carrier for me, I will continue using them. If not, I'll switch, but I won't make that call based solely on who holds voting rights for the shares.
As a shareholder, I would be very concerned about how much influence the government will have on the airline's operations. For example:
- How will this impact future labour negotiations with unions? Union leaders will cry to one of AC's largest shareholders (the government) if negotiations are not going their way. Will the government 'force' AC to pay higher than market wages?
- If a mayor complains that their city/town is not getting enough flights from Air Canada, will the government force AC to add flights - even if they are not profitable? If AC concedes to political pressure, how many other mayors will want their piece of the action?
- Even though the gov't has only a 6-10% ownership stake, will their influence be enough to consider them a crown corporation again?
As a customer, I am concerned that government influence will eventually impact customer service, and make AC a shell of what it is today. Gov'ts are notorious for giving into union demands. What will get cut if this happens at AC? Despite what the government will have you believe, money doesn't grow on trees.
As a competitor to Air Canada, Westjet, should be very concerned about the gov't's stake in AC. Will AC be favoured over WS? Or will it be the other way around? Will the gov't use it's influence over AC to help Westjet (i.e. approvals for certain international destinations), or force AC to stop serving a destination in favour of Westjet?
As you can already tell, I believe in the free market. I also believe the gov't must play a role helping companies that have been directly impacted by their decision to shut the economy down. However, I believe an ownership stake should have been avoided. It makes me wonder if Calin knew it could not be avoided, and jumped ship.
Either way, I feel AC gave up too much. I'm sure they could have survived on their own with a smaller bailout package. There are other ways the feds could have helped all airlines equally, such as lower airport rents (and lower landing fees), lower air traffic control fees, cut the carbon tax on fuel, etc.
To me, this just ushers in the return to the old Air Canada (MapleFlot).