Air Canada Jazz looking to cut costs by $90 million, president says MICHAEL TUTTON Canadian Press Monday, February 10, 2003 HALIFAX (CP) - The president of Air Canada's regional carrier says the troubled airline has to slash about $90 million in costs this year - equivalent to its losses last year. "Our challenge this year is we're looking to break even," Joe Randell, president of Air Canada Jazz, said in an interview Monday from his Halifax office. "There was a $90-million loss last year. . . We've got a $90-million gap we have to make up for this year." The airline doesn't publish its full financial results, but previous estimates have placed the airline's revenues at about $1.1 billion. Last week, Air Canada said it was considering selling Jazz, but analysts and potential buyers dismissed the idea, saying the airline wasn't making enough money. But Randell said Monday the hoped-for sale could still happen. "There needs to be some changes before a new owner would be attracted to invest in Jazz," he said. Those changes include a cost-cutting plan that will be unveiled in the months ahead. "We can't continue to sustain the costs," he said. "And we're going to have conversations with. . . our unions with respect to how we can lower our costs." A spokesman for the Air Line Pilots Association, which represents 1,200 Air Canada Jazz pilots, said the union will resist any calls for wage concessions in meetings set for Feb. 12. "We have a lot of problems with the numbers being thrown around with respect to the losses," said Vincent Charron. "Air Canada and Jazz are all the same company. . . We feel it somewhat unfair to be pointing at Air Canada Jazz as the unhealthy child of the corporation." Charron said the parent airline charges its regional affiliates too much for maintenance and ground services. He said by inflating these costs, Jazz's paper losses grow and unions face heightened pressure for concessions. Randell said other measures could improve Jazz's prospects, including having the parent company allow his company to fly a bigger fleet of jets. "Air Canada does operate regional jets. At Jazz we'd like to be in a position to operate more regional jet airplanes." Randell also said that similar carriers in the United States are prospering because their parent company guarantees the purchase of a percentage of seats on the flights - an arrangement known as capacity-purchase agreements. Aviation consultant Ray Kaduck said the measure would make Jazz more attractive to potential buyers. "It would give you automatic cash flow you could count on," he said. The Ottawa-based analyst said whatever changes are made at Jazz, the industry faces deep problems. "What they'd really love is for the industry turmoil to end and the passengers to come back. But that's not something in their control." *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@escape.ca Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.boogsie.com/ TnT Webdirectory: http://search.co.tt *********************************************************