Biggles

Just listened to an economist on Newsworld regarding A.C. and its economic woes. He stated that if A.C. goes C.C.A.A. NO protection will be in place for Aeroplan miles. They will become worthless the moment the airline files. His advice "Get Rid Ot The Miles Fast" He also thinks that Shwartz is having second thoughts and may back out of buying part of Aeroplan.

Your Thoughts????

Biggles.

Ferrari

AP, being a seperate company is by far more valuable than AC.
The only way I can see things going bad is if AC goes bust and there is nowhere to redeem your miles...

I can't see the government letting AC go..

To much at stake.

Jobs etc....Agreed the unions need to smarten up.
But with the end of the two contract things can only get better.

StuMcIlwain

I am quite certain that AC will be around in some form or another for many years. No one is in a position to replace their international network, and I'd be very surprised if Ottawa lets them fail for that reason. They may shrink a lot, but they will still be around.

Given that US and UA have kept their frequent flier programmes while they reorganize under bankruptcy protection, I see no reason why AC would not if they are forced to seek bankruptcy protection. They claim Aeroplan is one of the few divisions at AC that is making money right now. Why would they discontinue it?

airbus320

Full bankruptcy is the only scenario that worries me re: my Aeroplan miles.

cattle

So what happens to reward tickets that have already been issued on another Star partner? Would you ticket still be valid since they took the miles out of your account already?(and presumably paid the partner for the seat already)

I have reward tickets on LH because I was just that bit worried about UA being around in the summer (just in case).

I'm not actually worried about losing my tickets anyway (aside from being ). Everything I have booked for my trip can be cancelledand I wouldn't lose a dime but others might be concerned under full bankruptcy.

Andrew Yiu

FYI - reward tickets are not paid for until you fly the flights. So the operating carrier don't get money from AC until you fly the flights.

cedric

Re: Aeroplan. UA and US are both Ch.11 in the US, yet their frequent flyer programs are still around. I don't see Aeroplan dissapearing anytime soon, *unless* the Onex sale does not go through (ie. something is very wrong).

Re: Air Canada (mainline). I'm not sure that AC won't dissapear completely though. I have a slight hunch that a Sabena-style bankruptcy might happen. Don't forget they have very few assets and an extremely high debt load. Maybe Jazz and Zip will be all that remain (I doubt that they have much debt compared with mainline). And that's exactly what happened in Belgium.

Gazou2002

Short term memory have we here?????
What happened to your CPlus miles when
CP went on CCAA? The answer is there....

Gazou2002

Yeah!Yeah! I know,we absorbed them. But they
still stayed there and even status was brought over.
With noone to absorb the miles except ClubZ
I can see why people are worried. Rupert always wanted you to redeem on toasters and such(ha!ha!)....
I can actually see AC coming out as a mean
lean machine if they file CCAA. However,RM is still trying to save face.

YYZC2

I think comparing the SN and AC situations is a bit of a stretch. Even if SN disappeared completely (and it hasn't), Belgium would still be very well served by a number of carriers, with non-stop service to most European centers and many North American cities. Hitching its horse to Swissair didn't help much either.

AC may be ailing, but I think SN was virtually irrelevant in the European marketplace. In it's latest incarnation, it is a much smaller niche player that has forged relationships with BA and AA, among others.

I think the odds of AC ceasing operations is less than 1 in 100, barring another spate of terrorism. I think AC will shrink, and that a major (top-down) overhaul is needed, but the government will prevent a collapse.

B767

I think you are being overly optimistic if you think AC is going to have a "smooth flight" in CCAA. If they do emerge from CCAA (not everyone does and much harder to do than C11 in the USA, they are going to have new owners most likely the bond holders and banks who are now owed billions. Don't look for any white knight to ride in save AC. The new owners are going to want to rip up all of the union contracts and force new ones on the employees. They will be looking for any way to reduce operating costs. Even if AP is a separate company I doubt they are carrying the liability of all the miles AC owes the FF, if so what assets do they have that makes them attractive to others. Let's face it, if you are a major creditor that is now an owner and has had to settle for pennies on the dollar, are you going to leave our AP miles/liability as is?

YYZC2

B767: I must admit, I am unfamiliar with the CCAA. Is there a "primer" on the web?

Believe, I am more aware than most that there will be pain. However, in this commercial aircraft market, wouldn't creditors and lessors lean towards letting the airline operate and let their ships earn what revenue they can, rather than turn to the moribund open market?

Ken hAAmer

This discussion is proceeding on the misguided perception that it is an economic issue. It is not.

As was the case with CP, it is a political issue. The political cost of AC going under is much greater than any dollar amount, so good or bad, the feds will never it let it go under, under any circumstance.

As for the points, "cancelling" them would be the one thing that could do more damage than any other action. As much as we all might gripe, including me, the points and benefits, watered down as they are, do cause some "loyalty." As the benefits have been reduced, loyalty has also been reduced.

But if Aeroplan collapses or otherwise disappears, loyalty will likewise entirely disappear. WestJet will see a massive increase in domestic travel from domestic travellers who will now have no "loyalty" program to belong to. WestJet will also accelerate plans for transborder business, to try to soak up as many of us cockroaches as possible, as we run for the cover of US airlines. And for international travellers, like us trans-border types, they can just pick whatever foreign carrier's program best suits them.

Airlines know this. Onex knows this. Unions know this. Shareholders and financiers know this. And even Colinette know this; the fastest way to kill an airline is to gut it's loyalty program.

Just ask US Airways.

[This message has been edited by Ken hAAmer (edited 03-12-2003).]

B767

Ken do you really think JC give a s***?

B767

Had a quick look around. Best I could do for now is;

www.fedpubs.com/subject/bankrupt_law.htm

I am traveling tomorrow and will see what I can dig up later.