24left

I posted the article because this FA chose to give an interview, not using her own name for obvious reasons.

We all know how contagious this virus is. We know not long ago, an AC FA was sick in HNL and had arrived there from YYC (IIRC) and prior to that, she had flown from FRA.

Of course none of us and likely even AC or the crews know who got what from whom, it's all a matter of perspective. Crews flying the repatriation flights (and even as far back as all my AC flights to and from HKG in February) had all volunteered. I assume AC advised them of the risks, maybe forms were signed.

Further, with poor to zero tracing and tracking and all kinds of privacy rules in Europe and Canada, we will never know. Alberta seems to be the only place that was publishing flight numbers dates and seat rows where an infected person may have sat. Could have been deadheading crew, could have been non-revs, could have been pax, could have been crew working the flights....the list is long.

Some believe that it is not just AC pax who might have been contagious on the repatriation flights, but flights going back into February. But nothing was done then.

There are many who think AC and other airlines should have shut down even a month ago. Well, the government and AC and other airlines made their own decisions. And here we are.

RangerNS

Ones mind hearkens back to the neither entirely fair, but also not wrong, history of AC FAs spreading viruses around the world. But then, Cortez's microscopic stowaways did more damage then his conquistadors.

Not-joke aside, its a statistical certainty that crew will spread disease. We have doctors at the cabinet table, so I'm sure the politicos are being told that reality.

Stranger

I don't think we really *know* either. All rumors, just with some basis but all unconfirmed.

Plus we still don't have real evidence that transmission on plane is significant. For instance if the deadheading pilots shared the same airport shuttle, I suspect contamination on the shuttle is much more likely than contamination from independent sources on ple plane. But sure, the story is sexy...

Hindsight is wonderful... But one could have seen these accusations of overreacting flying around if strong measures would have taken earlier. Whether by airlines or governments. Except, it's resonable for airlines to follow govt. Cruises is another story of course.

yulred

I can’t see a government owned airline offering a worse product than whatever constitutes (or rather constituted) AC Y long haul products until recently. Transport ministers would get hammered relentlessly over cleanliness, OTP, IRROPs handling. Might well be an improvement for the vast majority of AC pax. More costly to taxpayers? Perhaps? Or they’d pump those record profit into cleaning planes etc, rather than just pocket it.

Anyway, there’s reports circulating that the German government might take an equity stake in LH. So maybe that’s one way out for an “essential” service.

I honestly can’t see AC going under. Ottawa won’t let it happen. High regulatory capture and/or too many VIP cards floating around.

blue2002

Maybe true, but history teaches us such perceived "need for national security" still does not protect airlines from bankruptcies.
https://en.wikipedia.org/wiki/Air_Canada

s0ssos

I doubt AC advised them of the risks.
There is an article about a bus driver who has driver. He had posted a rant about a lady who got on his bus, coughing away, without covering her mouth. And how that is despicable.
And lo and behold, he got the virus and now is dead, 2 weeks later. He was 50.

I think FA's have a thought they are invincible. I think bus drivers know their job is dangerous (not just in this situation, but who knows who will get on). After all, they've flown thousands of flights and never had a crash.

tecate55

You've misunderstood. I understand that vouchers/gift cards come up in, well, every retailer/consumer bankruptcy in recent history. Sometimes they'll lump small claims together, other times, you can see every claim from $1 and up. I'm not saying small claims are immaterial and therefore ignored or paid-out automatically.

In bankruptcies, the creditors can be at war with other creditors to invalidate each other's claims to leave more scraps for themselves. Usually, voucher-holders are small potatoes and launching a legal fight against them will cost more than it gains. But an airline bankruptcy in 3-6 months would be a VERY different beast. Potentially $billions in vouchers at stake. What happens if one/more unsecured creditor (airport/fuel hauler/meal provider/pensioners/whatever) successfully files a motion invalidating the voucher-holder's claim because voucher-holders *did* get their promised voucher/TP?

I don't think this has come up in a bankruptcy before, because nobody has bothered to present it. But the value of eliminating a creditor group of this size in this scenario would be massive. Dunno why the confidence that they would stay intact, the fact that they're unsecured already leaves them with scraps if they can't get a chargeback in.

I suspect Amex is rejecting chargebacks because they fear becoming unsecured creditors themselves.

RangerNS

Air Canada never stopped operating, and wasn't actually bankrupt, anyway.

What would happen if any airline can't recover post bankruptcy protection, and gets to the point where even trustees and creditors stop the operations is an open question.

Stranger

What's the difference between being under bankruptcy protection and being bankrupt anyway?

As to airlines that did go belly up, apart from a bunch recent mostly British low costs (Monarch, Thomas Cook...), I can think of Panam, Sabena, Swissair, Varig, Viasa and surely a bunch more. Meridiana/AirItaly just liquidated OTOH.

RangerNS

When you are under bankruptcy protection you go to your creditors and negotiate with them, offering them somewhat less then they are owed because you are (nearly) out of money. I guess you can always negotiate, but under "protection" the ability of those who you owe money to is limited, and they all would get a seat at the table. Collectively, and with court supervision, different players might get paid on a different schedule then contracts state (an airline might be able to use cash to buy meals so they can keep flying, even if they have back rent to an airport, the courts wouldn't let the airport seize aircraft).

If your bankrupt, you're just out of money. You couldn't charge a case of peanuts if you wanted to, and no one will stop the airport from booting your jet.

Adam Smith

AC has provided the product that the market has wanted. AC didn't invent 10-across seating in 777s. It wasn't the first to start shrinking pitch.

Ministers are rarely questioned about the minutiae of Crown corporations.

Unlikely. The service would likely be the same and much of the former profits would be burned up in bureaucracy, bloat, bad union contracts, etc. Either that or AC would increase the service as you want, but still have to compete against WS, AA, LH, etc, and charge similar prices, meaning the profitability would be lost to an inefficient business strategy instead.

I've already suggested a structure, in this thread, in which the government could put money in and have a piece of the upside without having to involve itself in running the airline.

The following is attempting to reply to all of the posts above...

I'm going to caution against trying to give specific meaning to terms that don't necessarily carry it; RangerNS , "bankruptcy protection" isn't a defined term in the Companies Creditors Arrangement Act ("CCAA"), the law under which most restructurings (what you would think of as "bankruptcy protection") are carried out. The term "bankrupt" or "bankruptcy" is commonly used in everyday conversation for any entity that's insolvent, i.e. can't meet its obligations, although "bankrupt" does have a specific definition under the Bankruptcy and Insolvency Act ("BIA") that's close to what you're implying.

I would suggest the right way to talk about it is that an insolvency can end one of two ways, either in a restructuring, where the company continues operations and eliminates debt, amends contracts, etc, or a liquidation, where the business is essentially shut down and the assets sold off for cash. AC's 2003 insolvency was a restructuring - debt was exchanged for equity, and numerous contracts were renegotiated, but the airline continued to fly and operate as normal (pretty much) throughout. This was also the case with the last round of major insolvencies in the US - AA, UA, US, NW, DL, etc. In Europe, insolvency laws aren't as favourable to companies wanting to restructure, so it's much more common to simply end up in liquidation. Air Berlin, Monarch, etc were pretty much all liquidations. Companies also sometimes start out trying to restructure and end up having to liquidate because they can't get support from creditors and/or the necessary financing to restructure - that was the story at Jetsgo.

If AC were to become insolvent, it's highly likely that it would restructure, and use CCAA to do so (although some restructurings are done under BIA, they're almost always done in CCAA).

But whether a company is operating under CCAA or BIA, and whether it's trying to restructure or liquidate, the company is under the protection of the court in the sense that it's not a free for all for creditors to start seizing assets or filing lawsuits against the company to get their assets, it all has to be directed through that CCAA/BIA process.

Stranger

Sure, that was not my point. Except in the second case, not sure your definition is quite right. It's more like the creditor prefer to liquidate than agreeing with th company on some plan.

Both correspond to the company running out of cash to pay creditors today. Then it's up to the creditos one way or another.

EdmFlyBoi

It seems highly unlikely that AC would become insolvent as a result of this crisis. They had $5.8 Billion in cash, cash equivalents, and short term investments as of end of 2019. They also have about 75 unencumbered aircraft in the fleet, meaning they can park a good portion of the fleet with little cost. They also seemingly are in a good position due the Max fiasco that is turning into a potential positive with the settlement with Boeing and the ability not to take delivery (and therefore pay for) a good number of the aircraft they have committed to ordering.

There have got to be at least 10 carriers they compete with on routes that are likely going to bankrupt first, not least of which would be American, who seem to be in fair bit of trouble. A number of their Star Alliance partners are also likely in trouble, and one has to wonder if Lufthansa would sacrifice some of their underperforming entities (Brussels, Austrian, Eurowings) to unencumber themselves and come out of this in better shape. Etihad, Thai, Vrigin Atlantic and Australia, Alitalia, Norwegian, SAS, LOT, El Al, Transat (if they don't end up buying them), and a few others are more likely to go prior to AC. It seems likely that once this mess is done, AC will right the ship and carry on performing as well as they have financially the last few years.

24left

And change comes.....





QUOTES from article:

"Air Canada said Friday it would provide gowns and eyewear to flight crews to protect them from coronavirus.

The company said in a memo sent to staff and seen by CBC News that it secured a supply of plastic safety eyeglasses on Friday, and will provide workers with protective gowns to wear over their uniforms starting Sunday.

"We're also sourcing a protective item that can be worn over top of prescription eyewear and will report back soon," the memo read.

The announcement came days after an investigation by CBC News found Canadian airline workers and their unions have complained about lack of protective equipment — such as protective suits or gowns, and mandatory testing — and several flight attendants became sick with COVID-19.

"I've asked several times, 'Why are we not wearing hazmat suits?' Other airlines are wearing hazmat suits," a flight attendant who works for a major Canadian airline told CBC News.

"We are on the front line and we are exposed to people from all around the world. We have connections from all over the world."

....

In the memo, Air Canada said it chose gowns over hazmat suits "mainly because [they] can be removed quickly in the event of an emergency."

Canada's airlines are required to provide gloves, masks, wipes and sanitizer to employees. Wearing the gear is optional, except when handling food. "


Full article

https://www.cbc.ca/news/business/air...gear-1.5521769
.

Adam Smith

It's not that simple. The company is the one that goes to file for protection and that typically runs the process. Especially under CCAA, the company is usually granted some latitude to try to find a solution. If the company can't come up with a viable plan, including necessary financing, creditors will usually take over the process. But at the start, it's often not up to them.

Jetsgo is a good example, where the company initially filed for CCAA and was trying to restructure, and was granted several extensions by the court, but eventually certain creditors were able to prevail in their objections and have the company pushed in to liquidation under the BIA.

Yes, that's what I've been saying. But people keep wanting to talk about insolvency, so I'm trying to provide facts and informed analysis to counter the baseless conjecture that's often flying around

Don't forget the $1.2B or $1.3B in available credit facilities

Parking leased or financed aircraft doesn't cost any more than parking ones that are owned free and clear. The reason AC keeps touting the number of unencumbered aircraft is more that they're a potential source of cash, either through outright sales or sale/lease-backs. Although given the current state of the airline industry, I don't expect the terms on offer to be particularly great in either market. Interest rates are low, but credit spreads for airlines are getting much higher. Might even be more attractive to try to get a bank line, secured against the aircraft, than the traditional sale or sale-leaseback options.