TOO CHEAP TO FLY

Everyone is looking for a $99 fare, if they don't get it - they don't fly. How would you like to be an investor in a business that has rarely turned a profit in 80 years?

That's the crazy airline business and Air Canada shares with too many others the dubious distinction of its poster child. The Montreal based International Air Transport Association (IATA) notes that the airline industry has lost a total of $50-Billion since the business took a direct hit in the aftermath of the September 2001 terrorist attacks.

Because of the progressive rise in the cost of jet-fuel even some of the traditional "discount" airlines have found it more difficult to continue to offer low prices. For instance to shave costs, SouthWest in the U.S. has merged with Air Tran, and Ryanair in the United-Kingdom and Europe has grounded about 80 aircraft of its fleet.

Anyone remember "Tango" and "Zip"? A decade ago they were Air Canada's frontline effort to create 'airlines within the airline' to replicate and mimic the look and the feel of its upstart competitors; at that time primarily Calgary based WestJet which copied the successful SouthWest model from the United-States.

Air Canada Express (Sky Regional Airlines) Bombardier DHC-8-402 (Q400) N505LX (msn 4174) YYZ (TMK Photography) (new airline), a photo by Airliners Gallery on Flickr.

Despite the gloomy outlook, or perhaps because of it Canada's legacy flag-carrier claims to be positioning itself to buck the trend. Air Canada announced last spring that it would launch a discount airline that will provide cheap fares to holiday destinations. The surprise announcement seems to figure prominently in the company's labour turmoil which so far has involved customer service agents, flight attendants and which will likely soon also involve the company's pilots.

Speculating about forming a new company may have had more to do with pensions and work rules than lower ticket prices for customers. Which leads some pundits to speculate that the announcement was part of a scheme to advance the corporate agenda to negotiate different work rules, as it has since with the customer service agents where the salary scale for new hires was reduced by 20%; while the Federal Government's back-to-work legislation (which ended their June strike in less than 3 days) sent pension roll-back issues to binding arbitration.

Deep in the throes of its financial agony and bankruptcy reorganization in 2001 Air Canada split-off and downloaded regional operations by creating JAZZ, a company based in Halifax whose 5000 employees are represented by different unions and less lucrative wage scales. JAZZ has just started rebranding itself as "Air Canada Express" (see photo) to streamline operations with Sky Regional Airlines. Sky Regional is a non-unionized operator contracted to compete with Porter Airlines on the lucrative Toronto, Ottawa, Montreal routes operated from Toronto's downtown island airport. Lest I digress...Porter's response has been to open a new crew hub in Halifax leading to speculation that it will increase flights into Atlantic Canada and into the United-States through Boston, New York and Newark.

Following the threat of more back-to-work legislation from the Harper Government, this week's last minute agreement reached with Air Canada's 6000 flight attendants likely involves terms similar to those ordered in June for the customer service reps. It may force (at least strongly encourage) the company's pilots to follow the lead when their turn comes-up most any day now.

With a willing government and back-to-work orders at the ready: If Air Canada can achieve what it wants on labour and pension costs, then you may pretty well forget about their plan to create another discount airline altogether.

ISLAND OF THE ADVENTURE

Given the number of idled and idling shipyards and boat building enterprises along the eastern Canadian shore, one might pause to ponder why a previous Government of New Brunswick chose a Florida company to build its car ferry to the Island of Grand Manan.

Lest I digress; President Barack Obama's summer tour of several midwestern American jurisdictions was virtually derailed because he chose to travel in a state-of-the-art private coach manufactured in Quebec.

As for the Florida manufactured 400 passenger / 82 car, sixty-eight million dollar ferry "Grand Manan Adventure": No one doubts that it too is a state-of-the-art vessel. In fact it's precisely its onboard technology which has kept it tied-up at port for much of its short life. The ship was already several months behind schedule when it was delivered in August (Because it failed initial sea trials in the Gulf of Mexico) and it had operated for just 3 days before the bow thrusters failed on August 15.

The "Grand Manan Adventure" is going back into dry-dock in Florida later this week.

All of the hoopla surrounding the misadventures of the "Adventure" has
eclipsed what should have been a record setting tourism season for this island community sandwiched in the Bay of Fundy between the United-States and Canada. The "Bay of Fundy" itself is on the short list of finalists for the 21st Century's choice of the "Seven-Wonders of the Modern World" which will be announced early next year.

And...the well read international magazine "Reader's Digest" surprised islanders this past spring by naming Grand Manan third in its list of "World's Seven Best Small Islands."

(Ferry Dock / Not exactly as shown)

Grand Manan has long been known for its picturesque cliff faces, postcard perfect lighthouses, fresh seafoods and quaint villages. In the "Reader's Digest" poll it was ranked behind Santorini (Greece), and Key West, Florida. The locals, surely along with New Brunswick tourism officials, had hoped that having the island community on the international radar of the magazine's readers could enhance the economic outlook for the area, including much of southwestern mainland New Brunwick.

In nearby St. Andrews-By-The-Sea, the future of the Algonquin Hotel, since 1889 the historic mainstay of the once thriving resort community, is unclear as its operator, Fairmont Hotels & Resorts, has told the government that it's pulling-out in December.

While it's good to have others recognize what a terrific destination the Fundy Coast of New Brunswick really is...if travellers can hardly get there; they are most likely to choose more hospital destinations.

LINKED BY RAIL...

....Perhaps to digress: It's been suggested, tongue in cheek, that high-profile Hollywood personalities recently arrested at the White House protesting the planned Keystone XL oil pipeline from Alberta to the Gulf of Mexico did not travel cross-country on "electric" airplanes.

President Obama is scheduled once again to address the American people in a few days this time about major job creation initiatives, as the economy of the United-States remains mired in an endless and semingly bottomless recession. Pundits expect he will call on Congress to implement additional tax credits and bolster infrastructure spending to get the U.S. economy out of the doldrums.

Just a few months after Obama's swearing-in as President in 2009 he was in Tampa, Florida annoucing a cornerstone measure of his new administration plans to modernize transportation, reduce dependence on fossil fuels and create badly needed employment opportunities. Mr. Obama had earmarked more than $2-Billion for the construction of a "show piece" bullet train linking Tampa Bay and Orlando which would open a new chapter in modern, efficient rail transportation. The Tea-Party backed State Governor, Rick Scott, elected in the follow-up 2010 (mid-term) Gubernatorial face-off flatly rejected the deal. Some of the Florida money,to be specific $404-Million, is now headed to Amtrak in an effort to increase average speed on its rail service from Detroit to Chicago to about 110-miles per hour from the current 90 MPH.

Regardless of the environmental benefits, the plain reality both in the United-States and in Canada is that high-speed (downtown to downtown) train corridors make sense because they are substantially more efficient and less expensive than airplanes along short to mid-range routes...

VIA Rail Train #76, a photo by t47360 on Flickr.

...An argument of course which rings familiar to Canadians who have been advocating for a number of years seeking improved, faster and more efficient rail links along VIA Rail's lucrative Windor / Quebec City corridor. In light of the Amtrak project about to get underway thanks to the Obama "jobs" inititatives, some forward thinkers see an opportunity for a direct Chicago to Montreal rail corridor by way of Detroit and Windsor. Really a "no-brainer," for which the potential would be easily recognized both in Europe and in Asia where most developed countries are light-years ahead of the North American model for rail transportation.

Alas! That's not quite the perception at Via Rail which has received almost $925-Million in Federal stimulus funding to upgrade infrastructure and rail stations. It claims to be hamstrung by its "conventional" service because:"Any plan to move forward with high-speed rail would be a government prerogative."

Still, despite the Federal government's faltering initiative towards a "perimeter security" deal with our U. S. neighbour and, along with a deadlocked Michigan Legislative Assembly, 'Transport Canada' remains committed to, and adamant about, advancing funds to the Americans to build a second bridge over the Detroit River. It seems a rail-link could be a seamless logical extension and a substantial opportunity for this proposal. Since Denis Lebel the Minister of Transport, Infrastructure and Communities is "The" minister with responsibilities for every element of the file(s), he should be inclined (Nay!Encouraged) to reconsider.

DERAILING THE "TOMMOROWLAND EXPRESS."

From Woody Guthrie's hobo lullaby "The City of New Orleans", through Billy Strayhorn's "Take The A Train", and Glenn Miller's "Chattanooga Choo Choo"; musicians, troubadours and poets reflect the nature of their times with their compositions. Though troubling, it wasn't all surprising that songs performed during last weekend's "American Music Awards" in Los Angeles included "Times Like These" performed by Kid Rock; and "Pray" by teen-pop idol, Justin Beiber.

It was just about one year ago that U.S. President Barack Obama in a much publicized speaking engagement in Tampa, Florida rolled-out his Administration's plan to develop a nationwide multi-billion dollar high-speed rail system as a significant element of his nation's efforts to reduce energy costs; get cars off choked highways; and fight the release of CO2 gasses into the atmosphere. Florida was among the first state expected to benefit from the program with a 168 MPH train link between Tampa and Orlando, and future plans to extend the system south to Miami and then north along the Atlantic coast to Jacksonville.

Now Florida is on the verge of becoming the biggest train wreck yet along Mr. Obama's much touted plan. So far the state has received $2-Billion (70% of total cost) from the Federal Government for the rail link set to launch in 2015. But; brimming with confidence from this month's mid-term Congressional elections, and vowing to rein-in government spending; Republican conservatives have zeroed-in on "high-speed rail" as wasteful and too expensive at a time when all levels of governments are dealing with horrific budget pressures.

Critics claim the projects will only worsen the U.S. debt and will not attract sufficient riders in an American culture built around highways, automobiles and cheap gasoline. The backlash against rail projects as relief for congested roads and highways is rippling across the country. The "New York Times" has identified several projects already chopped: An $8.7 tunnel and rail line to connect New Jersey and New York has been cancelled by the Governor of New Jersey. - The Governor-elect of Wisconsin ran on a promise to kill a high-speed rail link between Milwaukee and Madison. - And; the Governor-elect of Ohio has promised to stop plans for a similar project in his state. As for Florida the Republican Governor-elect, Rick Scott, claims it isn't too late to knock the train off the tracks here as well.

In Canada, the government of Prime-Minister Stephen Harper has already signalled it plans to reign-in federal spending to slay our ballooning deficit closing-in on $60 Billion in the current fiscal year. It's already withdrawn funding for Edmonton's plan to host the 2017 "World Fair"; and may be setting the stage to kibosh the Quebec City bid for the 2022 "Olympic Winter Games" by denying funding for a new arena which might also accommodate a new "Nordiques" NHL franchise. If America is to set the trend: The City of Ottawa's plan for a $3-Billion underground "light-rail" system; VIA Rail plans for high-speed links in the Quebec City/Windsor corridor; and subway extensions in both Toronto and Montreal; might very well be tempting targets to "spread the pain" as pressure intensifies to control spending.

TORIES AND GRITS GEARING-UP FOR A NON-PARTISAN ELECTION

There was a hint of mischievous irony a couple of weeks back when Members of Parliament duped a pollster into believing John Baird was their choice for Parliamentarian of the year.

My Member of Parliament; the Conservative cabinet representative for Ottawa; Transportation Minister; and Stephen Harper's "Go-To-Bulldog" hardly personifies the ideals of representative democracy and federal parliamentary institutions.

Still there's growing anecdotal evidence that Ottawa's incumbent Mayor, Larry O'Brien, is once again counting on Mr. Baird's auspices to catapult him back into the city's highest office, come Ontario's fall municipal elections.

O'Brien hasn't yet thrown his hat into the ring; but he's expected to jump-in pretty much any day now. By doing so he'll be facing a couple of well organized opponents, each with a degree of backroom support from the other mainstream political parties : Alex Cullen with the backing of the NDP; and former Ontario Municipal Affairs Minister, Liberal Jim Watson. (Worth noting that Watson was Mayor of Ottawa about a dozen years ago.)

Back to Leepin' Larry and John Baird: The Minister of Transportation has just announced the Federal Government's contribution of $600-Million for the construction of a first phase 12-kilometer Light-Rail-Train system, which includes a subway tunnel underneath Ottawa's downtown core. The cost of the tunnel alone may reach $800-million, and the entire controversial project will likely top $2.5 Billion.

For Ottawa ratepayers, it's "deja vue" all over again! Back during O'Brien's 2006 election (The "Zero Means Zero" campaign), Minister Baird held-off funding on an original LRT (sans tunnel) until O'Brien's supporters kiboshed the deal. The City paid about $50-million in penalties for reneging on its contract with the German industrial giant Siemens to build the line...got nothing in return.

Nothing gained, three years later; and with City Council towing the line on O'Brien's new plan (with tunnel), Minister Baird pulled-out of a joint Ontario/Canada announcement on funding the project last December; holding things off instead until this week when His Worship is about to jump into the 2010 campaign. Through long time political affiliation; O'Brien, the millionaire businessman; and Baird, the perpetually angry federal politician have been friends for years. Locals will recall that Baird's name made the witness list at O'Brien's "influence peddling" trial a year ago. Since declared not guilty, he's been coy about re-offering for the 2010 election...at least until now.

Things though are different now: O'Brien's popularity is low; he still wears the mantle of his repeatedly failed "Zero Means Zero" tax promises of 2006; his transitional learning curve from businessman to politician has been long and excruciatingly costly for the City of Ottawa. Despite the now committed joint Federal/Provincial funding of $1.2 Billion for the LRT, ratepayers will be on the hook for another unfunded billion dollars. About $1000 for each resident of the city; and essentially the cost of the "damned" tunnel under downtown. Front-running candidate Watson says that's simply too expensive for the city to swallow.

Despite pledges of non-partisan municipal elections; like in a microcosm of Federal politics; the Grits and Tories are set to square-off in Ottawa's fall city council election over the same issue which divided the city four years ago. "Deja vue" all over again. Think I'll take the bus!

THE TROJAN HORSE IN THE CLOSET

Chapter seven of Ralph Nader's ground-breaking 1965 best seller is titled: "Damn the driver and spare the car." Forty-five years later and amidst the fall-out from Toyota's unprecedented 8 million plus vehicle re-call; Nader's chapter sounds all too familiar...

Those of my generation will know, of course, that Nader's book: "Unsafe At Any Speed - The designed-in dangers of the American automobile", shocked the world just as the North American boomer generation were about the purchase their first cars. "Nader's Raiders", as the hundreds of young activists inspired by the book became known, forced North American auto makers and Governments to confess and account for their collusion, abuse of power, and lack of regard for the safety and well being of millions of drivers and their passengers.

Lest I digress; Another of the book's keystone chapters - "The one car accident" - exposed the havoc and carnage of the Chevrolet "Corvair" (1960-63). Nader's work also led to the demise of the Ford "Pinto" and most importantly to the legislated requirement for seat-belts and other standard safety devices.

Which brings me back to Toyota. If the "Corvair" problem was its one-car accident factor (The suspension made it roll-over), Toyota's acceleration issue frequently involves collision's with others, which is all the more tragic. Koua Fong Lee is spending 8 years in a Minnesota jail after his out of control "Camry" killed 3 people in a rear-end collision with an Oldsmobile. Now even the District Attorney who successfully prosecuted Mr. Lee for vehicular homicide thinks the case was a miscarriage of justice.

A long time friend and university teacher who's opinion I value described Toyota's initial intransigence and its current responses as..."the classic issues management blunder of the 21st century". Toyota representatives; officials; and executives all the way up to the founder's grandson, the current President Akio Toyota, are sticking to the company script despite growing concerns and anecdotal evidence that the problem may be related to the electronics of the fuel injection systems rather than anything mechanical. Lest we forget: Toyota's track record in diagnosing the problem(s) is less than stellar: Ten months ago it blamed the runaway cars on faulty carpets getting caught-up in the accelerator pedal.

The Toyota Motor Company, now the world's largest auto manufacturer, was about five years old when Ralph Nader wrote "Unsafe At Any Speed". It's true that some in the American Congress may be on a crusade against Japanese auto makers now that the U.S. government is essentially the largest bailout shareholder in General-Motors and Chrysler...but perhaps that may be the most compelling reason for Toyota to remain beyond reproach in its response and corrective actions. There are many who believe the Asian auto sector is not quite there yet!

CAN'T WE "JETZ" GO?

The Prime-Minister's brief 36 hour visit to the USA provided several photo-ops for the folks back home but few tangible results on key areas of Canadian concern: Hardening of our mutual border; buy American provisions imposed by Congress; and Afghanistan.

Pretty much touted as the only significant achievement on the whirlwind visits to the White House, Capitol Hill and then on to New York; was a somewhat nebulous agreement so that Air Canada "Jetz" may continue to fly professional sports teams from city to city within the USA; a practice commonly known as "cabotage". In an unexpected turn of events, on September 4, the American Department of Transportation had banned Air Canada from the practice throwing the carrier's exclusive wholly owned subsidiary; "Jetz" into panic and chaos.

Though Prime Minister Harper is a devoted NHL fan and his love of hockey surely helped. The fix to the Air Canada malaise was more the doing of the Minister of Transport, John Baird; seconded by the Minister of Foreign Affairs, Lawrence Cannon: Both of whom (as is known in Ottawa circles) are adept at backroom arm twisting. It seems that there was a lot more than the practice of "cabotage" to the sudden surprising decision by U.S. Transport authorities to clip the Canadian bird's wings earlier in the month.

Lest I abuse of the birds and wings metaphor - I like to pigeon hole discussion points: First the background then the issue: For the uninitiated, Air Canada "Jetz" is a wholly owned subsidiary of the Montreal based Canadian flag carrier. It operates a fleet of five specially configured Airbus A-320 passenger jets exclusively for the high end charter business. In the case at hand, millionaire hockey playing members of the National Hockey League. Curious about how special the aircraft are? For starters, a regular Air Canada A-320 carries 146 passengers. A "Jetz" Airbus has 64 seats. "Jetz" has carried rock bands U-2, the Rolling Stones and several others on world and North American tours.

But - the main business of the charter carrier is professional sports teams. Its exclusive domain includes all six Canadian NHL franchises, the Toronto Raptors, the Boston Bruins and until the September 4th action from Washington was also about to include the Anaheim Ducks. And - Therein lay the problem! Legacy carriers, Delta, American, United, US Airways and several charter operatives south of the border have seen profits vanish and red ink flowing by the billions through the recessionary period. Predictions for this fall travel season are even worse.

Gary Bettman aside, the National Hockey League is a Canadian institution, and senior managers in most American franchises have connections to Canada. Our national carrier has been aggressive both in lobby efforts and in touting "Jetz" as the carrier of choice for NHL teams south of the border. When the U.S. Department of Transportation issued its edict against the carrier on September 4th, not only did it ice the deal with the Anaheim Ducks, but it froze confidential negotiations underway with the St. Louis Blues and the New Jersey Devils as well as an extended renewal deal with the Boston Bruins. Unprecedented pressure was being applied to transportation bureaucrats in Washington D.C. by airlines and their employee unions in the United States. Reflective of the American Congress desire to "Buy American", the Department of Transportation was only too happy to oblige and freeze the Canadian competitor all the way out of the USA.

When Ministers John Baird and Lawrence Canon were seized with the real motive behind Air Canada's clipped wings, the Transportation Secretary, Ray LaHood, though himself a Republican, albeit one with the same Illinois connections as the President, relented to avoid embarrassing Barack Obama during Harper's short 45 minute visit to the Oval Office. Obama's retaliatory message was clear when he sent an unknown underling to greet Harper at the front door to the White House. Diplomatic niceties aside: Now you know! Surely Air Canada will happily oblige if the Conservatives need a campaign plane for the next election.

"ZOOM" - YOUR BANKRUPT!

Whether it is to the family friendly resorts of central Florida or the beaches of Mexico, the Dominican Republic and Cuba, midway through the annual "March Break" pilgrimage south, Canadians have been flocking to the sun destinations through various tour packagers.

Just like last year, climate change has made for yet another cold, snowy, miserable winter from coast, to coast, to coast. Last week, a spokesman for Canada's other airline - Westjet - touted the company's southern destination packages for keeping aircraft full through our crashing economy and the waning dismal winter months.

Unlike some of its sun destination competitors, "Westjet" has obviously been immune to the cut-throat competition from tour operators who claim their rivals will go to any lenghts to choke them out of business.

Something rare in the highly volatile razor-close competitive "sun destination" industry: Southern Ontario based "Sunwing Vacations" has publicly accused its rival: Montreal based "Air Transat" of exploiting the economic downturn to justify irrational and predatory behaviour.

Look! Given the relatively short season: The winter southern travel vacation business is an enormously competitive industry. Canada's aviation graveyard is littered with failed operators - Wardair, Canjet, Zoom, Sunflight and countless others.

Montreal's "Air Transat" is one of the world's largest air charter carriers with operations in Europe under the Thomas Cook Travel banner, as well as in many other destinations from the southern U.S, the Caribbean, the Mediterranean region as well as elsewhere. In this faltering economy "Air Transat" has posted three consecutive quarterly losses, including a shortfall of almost $12-million in the first quarter of its current fiscal year.

"Transat's" critics claim the company is obsessed with maintaining a leadership position in sun destination charters - "at all costs" - and uses predatory practices to choke-off its competitors. "Sunwing's" public complaints bring to mind another operator, "Air Maestro" which flamed-out in March 2007 in a failed "head-to-head" battle against "Transat" for the lucrative Quebec City, lower St.Lawrence River Valley winter escape business.

"Maestro's" President, Michel Mordret, had been a Transat Vice-President who took-on his former boss, Air Transat's President, Jean-Marc Eustache, in a winner take-all struggle for the hearts and minds of vacationers in the under-serviced greater Quebec City area vacation business. "Air Mastro's" fourteen destinations service barely made it out of the gate before the rival slashed prices and was subsequently blamed for driving the up-start out of business. When it abruptly collapsed under an $8-million debt, on March 7, 2007; "Air Maestro" left a total of 1,645 stranded Canadians at airports all over the Caribbean and south Florida.

Yes! It has been a cold, snowy, miserably bad winter. Fortunately "spring" breaks-out this week. Though sun destination travellers should still beware of travel deals south that could leave them hopelessly stranded at strange destinations if/when the economy claims another tour operator's struggling business.