Air Canada ads target anxious travellers: 'we are not going out of business' GILLIAN LIVINGSTON Canadian Press Wednesday, April 02, 2003 TORONTO (CP) - Air Canada, now operating under bankruptcy protection, took out conspicuous newspaper ads Wednesday to reassure customers that it's business as usual. But once the airline restructures, travellers can expect to find fewer flights on fewer routes with fewer employees. For now, Air Canada continues to operate as before, including its Aeroplan rewards program, the ads stated. "It is important that you understand that we are not going out of business," the ad said. "You can continue to book your travel with confidence." The airline reported "business as usual systemwide" with over 1,400 flights on its first full day after filing for court shelter under the Companies' Creditors Arrangement Act. But Air Canada is likely to look and operate much differently when it emerges from bankruptcy protection in three to six months, because it has to slash all its costs. "We're likely to see capacity cuts, certainly in the domestic market," said Rick Erickson, an independent airline analyst in Calgary. He estimated the airline might reduce the number of seats it flies by as much as 30 per cent. For example, daily flights between major centres - such as Calgary-Toronto which has about eight per day - could be reduced by several a day, he Erickson said. Smaller centres, such as Saskatoon which now has about two flights a day to Toronto, could lose one of them. That's "where it really hurts," he said. And short routes between smaller cities could be eliminated entirely, Erickson added. Air Canada could also transfer some routes to its lower-cost Tango and Zip operations. Under bankruptcy protection "you can bet these creditors are going to be ferocious in their efforts to cut costs," Erickson said. The airline's workforce is "going to take some very serious cuts," Erickson said. "We could easily see 20, 30, and maybe even 40 per cent cut as they get furloughed off." Canadian Auto Workers president Buzz Hargrove, whose union represents ticket agents and other Air Canada workers, is resigned to major staff cuts. "There's going to be a lot less jobs, there has to be," Hargrove said. "If you're going to have a smaller airline with less planes and less service, you're going to have a lot less people." The void left as Air Canada eliminates routes is likely to be filled by short-haul competitors, said Lesley Paull of Paull Travel in Edmonton. "The smaller carriers have been coming in to take those routes" already, she said. But Hargrove called the dominant airline's expected service reductions "terrible for Canada," making travel more difficult and leaving "no national flagship carrier and no ability to knit the country together from coast to coast to coast." Air Canada will also likely slim down its flights to the United States and examine its overseas service, flying only routes where it makes money, Erickson said. Overall, "there's going to be a cheapening of service," said Harry Gow, former president of the Transport 2000 lobby group. No decisions have been made so far on how the restructuring will affect specific services, said Air Canada spokeswoman Laura Cooke, but reviewing labour costs, routes and all operations "is part and parcel of this process." Air Canada has already said it needs to eliminate $650 million a year in labour costs, and announced 3,600 layoffs. The carrier has already cut capacity because of softening demand attributed to the war in Iraq and to severe acute respiratory syndrome. As well, Air Canada plans to sell its Jazz regional operations and 49 per cent of its technical services maintenance outsourcing division, along with a "significant stake" in its ground services unit. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx 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.ttsailing.org/ TnT Webdirectory: http://search.co.tt *********************************************************