Air Canada responds to Jetsgo challenge by offering half-price Tango tickets DAVID PADDON Canadian Press Friday, June 13, 2003 TORONTO (CP) - Air Canada has responded to the latest challenge from a smaller rival with a week-long seat sale at its Tango no-frills service, a move the insolvent airline says is necessary despite losses of about $150 million a month. An undisclosed number of Tango seats will be sold at half price until Thursday, subject to various conditions. One-way tickets between Toronto and Ottawa will go for as little as $12 - plus fees, surcharges and taxes. The Tango seat sale was announced immediately after Jetsgo, a year-old discount carrier which has been growing while Air Canada shrinks, announced $1 tickets as part of a one-week seat sale. Jetsgo previously caused a stir with a regular $19 one-way fare between Ottawa and Toronto on early-morning and late-afternoon flights, in addition to a number of two-for-one and other promotional gimmicks. Asked if Jetsgo was the reason for Tango's latest seat sale, Air Canada spokeswoman Laura Cooke said: "You could characterize this as a competitive response to activity in the marketplace." She dismissed concerns that the Tango sale could jeopardize Air Canada - which has been losing an estimated $5 million a day. Cooke noted Tango, set up in November 2001 as a no-frills service to compete with discount carriers, has lower operating costs than the main airline. She also said only a limited number of seats are available at the sale price. The CEO of the Association of Canadian Travel Agencies agreed that Air Canada had little choice but to match its competitors' prices despite operating under court protection from creditors. "The purpose of their restructuring is to become lean and mean and to be able to offer the kinds of low-cost products that the competition has been offering for quite some time," Mark-Andre Charlebois said from Ottawa. "In the meantime, we're happy the carriers are doing whatever they can to put bums in seats because that's what we need." Nav Canada, operator of the country's air navigation system, said Friday that plane traffic in Canadian skies fell in April, ending months of recovery from the volume losses since the September 2001 terrorist attacks. Air Canada president Robert Milton said earlier this week that May revenues were down about $200 million compared with the same month last year, mainly due to the SARS outbreak, and that June looked just as bad. Milton also said he expects Air Canada's revenues will be more than $1 billion lower in 2003 than the $9.8 billion it took in last year. The SARS crisis has prompted Air Canada to speed up plans to reduce its fleet, cut thousands of jobs and otherwise cut costs under its court-supervised restructuring. But ratification of a key agreement with the airline's main pilots union remained up in the air Friday - with a June 30 deadline looming for Air Canada to have all its labour-cost accords in place. Under the Air Canada Pilots Association's current contract, members are entitled to a 15-day review of a "bid book" containing the assignments available for the coming months. However, Cooke said the latest bid book hadn't been released to the union as of noon Friday. In addition, there was no word on a report by a federal arbitrator who has been asked to resolve an internal union rift over seniority. The two related issues - seniority determines pilots' bidding rights - have complicated the union's ratification process. However, another union representing pilots at Jazz has ratified its agreement - although the union's executive council used its power to agree to the deal without a membership vote. "Now we can concentrate on other things," said Vince Charron, a spokesman for the Air Line Pilots Association. "We've planned for all contingencies," Charron said, adding that one possibility is that Jazz may survive on its own if the main airline dies. The Canadian Auto Workers announced Friday that its 7,000 members at Air Canada voted 71 per cent in favour of a cost-cutting agreement. Air Canada has said its restructuring depends on agreements with all of its unions, which have tentatively accepted $1.1 billion in concessions to cut annual labour costs by one-third. Anne Davidson, president of CAW Local 2002, said the positive vote by members "reflects a deep resignation" that many will lose their jobs and others will take a step backwards on working conditions. *************************************************** 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/ Mas Site: www.tntisland.com/tntrecords/mas2003/ Site of the Week: http://www.carib-link.net/naparima/naps.html TnT Webdirectory: http://search.co.tt *********************************************************