Air Canada prepares to merge 4 regional airlines into one carrier April 7 ALLAN SWIFT Canadian Press Sunday, March 10, 2002 MONTREAL (CP) - Air Canada is close to launching a new airline that will combine its four regional air carriers into a single entity with its own name - still to be announced - and branding from coast to coast. The president of the regional unit, Joe Randell, said in an interview the official integration date will be April 7 as the spring and summer schedule begins. The move is several months behind schedule and required the airline to negotiate contracts with unions from the four airlines to merge them. The new carrier combines AirBC, Canadian Regional, focused on the West, Air Ontario and Air Nova, in Eastern Canada. Later this spring, it will hold a ceremony to trot out its new name and uniforms - chosen by a marketing agency. "With the effective date of April 7, our spring and summer schedule, we will finally be operating as one organization," said Randell, clearly relieved that the process is coming to a conclusion. The airlines were legally integrated Jan. 1, 2000, but were unable to function as one. "We've got a lot to look forward to celebrate," said Randell. "We've got our challenges, but from our own internal perspective we're feeling pretty good about this year as we've knocked down a number of challenges and obstacles along the way." With 4,420 employees and a fleet of about 120 turboprops and small jets, Randell says it's among the five largest regional airlines in the world, and the one covering the largest territory. Under the new summer schedule, it will reach 80 destinations from Sandspit, B.C., to St. John's, Nfld., and Richmond, Va., with 777 departures a day. Halifax-based Randell said the challenge now will be to effectively integrate on an operating basis four airlines that have their own history and markets. "It's not just a matter of putting a new name on an airplane, it's far deeper than that. It's changing the thoughts and hearts of our employees." Part of this challenge went to Target Marketing and Communications of St. John's, which took four months to produce a name, colour scheme, logos, interior decorating, advertising and uniforms. "Our task was to find what was common in all four airlines and develop a name and a positioning that would work within the Air Canada brand portfolio," said president Noel O'Dea. "Uniting the four workforces into one and uniting the fleet - which now has four different brand names - is important from both a consumer and a staff point of view." Collective agreements were completed by December with pilots, flight attendants and maintenance personnel. Customer service agents have yet to sign, but Randell said this won't delay integration because there is no overlap. "Crews and aircraft will be able to flow freely across our network, without regulatory or collective agreement issues," Randell said. "That's a pretty significant milestone for us and that flexibility is one of the major benefits we're hoping to derive from the integration." Having a self-contained unit would make the regional airline, with revenue of $1.1 billion last year, easier to sell. Air Canada chief executive Robert Milton said in February this is one option to help his money-losing airline (TSE:AC) pare down its debt. Selling the regional business could also help relieve Air Canada of some of its domestic market dominance, which causes it grief with the federal government and its own image. Transport Minister David Collenette has made it clear he would prefer Air Canada to focus on its cross-border and international business and drop some secondary markets in Canada to make room for smaller airlines. Despite Randell's euphoria, airline analyst Jacques Kavafian says he sees "no huge advantages" to having a single regional entity. Nor does he see an outside buyer coming to acquire it, adding that any buyer would have to strike a co-operation agreement with Air Canada. "The regional's out there to feed the mainline carrier," said Kavafian. "It's worth a lot more to Air Canada than to someone else." 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