Go to article index for other editions of Bob Orrick's IN RE (In the Matter of).
An Airline That Cannot Fly Versus One That Can
By
Bob Orrick
By now, all of Canada and much of the world know that Air Canada has filed for bankruptcy protection from the Companies Creditors Arrangement Act [CCAA]. On the same day that Air Canada was begging not to die dishonourably, upstart WestJet Airlines Ltd., out of Calgary, announced that it had had its best day ever. As the youth of this land are wont to say, "Go figure."
While Air Canada struggled with a $12.9 billion debt load, WestJet enjoyed 24 straight quarters of profitability. The thanks for this happy note go to the company's 40 per cent lower cost than Air Canada's. Again, as the youth are prone to say, "Go figure."
When companies such as airlines face bankruptcy, governments, particularly in Canada, become a bit anxious. For some reason yet unexplained fully, Ottawa cannot cope with the idea that Canada's primary airline, Air Canada, should be allowed to operate or fail like any other private company that has to operate in the heat of competition. It is said that competition is good, that competition tends to create a stronger market and that consumers are the winners in a competitive market. If that is so, and I truly believe that it is, why then does Ottawa jump into the mix and insist that Air Canada cannot fail?
The Air Canada unions were not overly anxious to accept Air Canada's demand that they cough up almost seven hundred million dollars in order that the company could find the cash necessary for its operations. Why would the unions agree to such an offer when the federal minister of transport had stated publicly that the government would do whatever it takes to ensure the survival of Air Canada? Clearly, Ottawa has it in its pointy head that Air Canada must survive despite the constant bleeding, brought on in the main by the company's ego and its self-appointed view that it is the only carrier worth consumer support. WestJet has shown the folly of that idea; Air Canada is a predator airline that gobbled up Canadian Airlines International [CAI] in an attempt to stand tall atop the Canadian airline mountain. Had Air Canada stuck to its business of providing quality service on manageable routes with a reasonably sized workforce, it might not have arrived at its destination, filing for creditor protection.
WestJet flies along smartly with a workforce suited to the airline's needs and without the fancy frills that Air Canada deemed were necessary to attract customers. Recently, WestJet expanded its service to Hamilton and just the other day began service to Windsor. Not bad for a little airline out of the West that has nipped at the heels of Air Canada to the point that the predator airline has seen fit to nip back with its own discount airlines, Zip and Jazz. Both fancy named airlines are covered under the terms of the bankruptcy filing.
Given the option, I prefer WestJet to Air Canada and would not be disappointed if the overly stuffed airline bit the dust sooner than later. The current protection that will allow Air Canada to continue to operate will not last forever and sooner or later we will face this day again; Air Canada will go hat in hand to Ottawa and on bended knee ask to be protected, again, from its creditors. I appreciate that Air Canada employs 40,000 people and that all should be able to seek employment in a field of their own choice; however, if the demand for air travel is there, the demand will be filled. Where is it written that Air Canada must fill the demand? Air Canada, as structured, is truly a dinosaur in a modern airline world.
Bob Orrick is a private tutor of English grammar, literature, poetry and Canadian history to off-shore youngsters. His pupils hail from such places as Taiwan, China, Japan, Hong Kong, Korea and Venezuela. He was previously in international marketing, was a ministerial assistant to a provincial cabinet minister, spent a few years as a reporter then editor of a community newspaper and enjoyed a career in the Royal Canadian Navy.
Advertising Information 
