Neha Jain: http://canadaaviationnews.blogspot.com/10

1. Air Canada unions want wage hike after airline posts profit
One of the biggest unions representing Air Canada workers said it’s time for the company to improve wages after announcing a return to profit in 2010.
The airline, which came close to bankruptcy in 2009, reported a net profit of $107 million last year, compared with a net loss of $24 million the previous year. For the fourth quarter of 2010, Air Canada posted an operating income of $85 million compared to an operating loss of $83 million in the fourth quarter of 2009.

Air Canada also announced a $14 million special equity grant to employees worth $14 million, on top of the $13 million cash payments that were agreed upon in 2009.

The improved profits come as the airline is about to start negotiations with unions on new contracts. A collective agreement with the Canadian Auto Workers union lapses on Feb. 28 and talks on a new agreement will begin on Friday. March 31 is the expiry date for contracts with four other unions.

“Frankly we’re not big fans of one-time bonuses,” said Leslie Dias, national representative for the airline industry at the CAW, which represents 3,800 Air Canada workers. “Wage increases are what the goal is as at the end of the day. If people get a pay cheque they meet their ongoing needs, not just on a one off.”

“There has been little improvement from a financial point of view since 2002/2003. We expect to see some progress this time around.”

In 2003, the hourly wage at the airline was $23.51, according to union figures. Union members saw their pay cut in 2003, 2004 and 2005 and saw no increase in 2009 and 2010. In 2006, 2007 and 2008 wage increases were less than 2%.

To help the company stave off bankruptcy the union also agreed to concessions on the group pension plan after it warned that a July 2009 pension payment would have triggered bankruptcy.

"Looking ahead, we will be in negotiations with our unions this year as all of our Canadian collective agreements are up for renewal in the first half of 2011,” said Calin Rovinescu, president and chief executive. “In 2010, we have seen first-hand the results we can achieve when we work together. I believe we have a good foundation to find common ground and achieve a satisfactory outcome. “

In the fourth quarter, passenger revenue rose 11.2% to $226 million, excluding a $40 million one-time gain. Traffic growth was up 8%, while the yield gained 2.8%.

Air Canada also noted an improvement in the high-end segment, which helps drive profit at airlines. Premium cabin revenues rose $88 million, or almost 21% from the same quarter of 2009 on a 16.9% rise in traffic and 2.2% improvement in yield.

Operating costs rose 4% to $100 million from the fourth quarter of 2009, in part because of higher fuel, wage and commission costs. However, the strong Canadian dollar helped keep foreign currency costs down, it said.

"While there are encouraging signs the economy and our industry are continuing to recover, this remains tentative and fragile,” Rovinescu said. “Fuel price volatility continues to be a significant challenge. “

2. UPDATE 3-WestJet Airlines profit more than doubles

Canada's No. 2 carrier, said on Wednesday a rebound in travel demand, tight cost control and new partnerships helped it more than double quarterly profit and positioned it for more profitable growth.

The low-cost airline, which is aggressively seeking new sources of revenue through alliances and expansion, also said it would defer delivery of six Boeing (BA.N) 737 planes to give it greater flexibility as fuel costs rise.

Shares of WestJet, which this week announced a commercial pact with Delta Air Lines (DAL.N), soared 8.7 percent on Wednesday to C$14.35 on the Toronto Stock Exchange after its fourth-quarter results easily beat market expectations.

Calgary-based WestJet said it expects first-quarter revenue per available seat mile, a key measure of top line performance, to mirror the 6.8 percent gain it posted in the fourth quarter. It said capacity will increase by 9 to 10 percent in the first quarter and by 6 to 8 percent on a full-year basis.

The airline, whose main rival is Air Canada Inc (ACa.TO) (ACb.TO), the country's biggest airline, said it is earmarking the bulk of the capacity expansion for fast-growth transborder and international markets.

WestJet said the new reservation system it launched last year, which allows revenue-generating alliances with other airlines, will continue to pay off in 2011.

As it looks to branch out in the U.S. market, WestJet said it wants to secure three to four code-share deals with other carriers this year and strike "additional" interline deals. Last October, it signed an interline deal with American Airlines, its first alliance with a U.S. carrier.

Code-share deals allow carriers to sell tickets on each other's airlines, while the interline deals that often precede them allow customers of both airlines to purchase connecting flights on one ticket.

"As WestJet continues to grow its capacity, these U.S. airline commercial pacts will fill more seats," said Robert Kokonis, managing director of airline consulting company AirTrav Inc.

"More importantly, the traffic base that Delta and American will bring to WestJet will have a stronger corporate business component than that of WestJet's traditional source of transborder traffic."

WestJet also said this week that it will boost its flight schedule at Toronto's Pearson International Airport in May in an effort to lure more high-profit business traffic.

West Jet says a rebound in travel helped boost profit.

West Jet says a rebound in travel helped boost profit.

3. WestJet Airlines profit more than doubles

WestJet Airlines Ltd. said its fourth-quarter earnings soared 138 per cent, doubling analysts' expectations for the quarter as the airline industry continues to recover and its "pricing power" returns.

But the carrier, which is stepping up service between Toronto, Ottawa and Montreal, said it would rein in its aggressive plans for capacity growth in the coming years in order to ensure that pricing power -- or the ability to enforce price increases without significant loss of business -- remains.

Canada's second-largest airline reported record fourth-quarter net income of $47.9 million, compared to $20.2 million for the same period last year.

Excluding one-time items in the fourth quarter of last year,

WestJet said its net income grew nearly 217 per cent.

4. Bombardier Works With NZ Aviation Authorities
The Canadian aircraft manufacturer reported to have been plagued by a growing list of landing-gear failures on its Bombardier planes says it has a field representative working with New Zealand authorities.

In a repeat of an incident last September, a Bombardier Dash 8-300 aircraft crash-landed at Blenheim yesterday after its nose landing-gear failed.

An amateur video showed the Air Nelson 50-seater turboprop approach the landing strip and land on its two rear wheel-sets as the nose falls forward and scrapes along the tarmac. There were no injuries reported, but the airport closed for the day as the runway was blocked by the disabled plane.

Bombardier Aerospace spokeswoman Marianella de la Barrera told the Montreal Gazette: "In relation to previous incidents, all I can say is that the design and manufacturing of the landing-gear systems for the Q-300 (50-seater) ... and all our other aircraft are designed to be robust and reliable,"

She declined comment on the latest landing gear failure in New Zealand, other than to say a Bombardier field representative was at the scene and working with authorities.

But the newspaper said the event was an "eerie repeat" of September 30 last year, when a plane of the same type, operated by the same airline, suffered a similar failure at the same small airport.

"The incident is the latest in a growing list of landing-gear collapses that have plagued Bombardier planes, notably its Dash-8 Q series of turboprops," the newspaper reported.

The latest Blenheim landing was the third instance of a Bombardier plane crash-landing in a five-day period, it said.

Two of its jets crash-landed in the days preceding that incident, one at New York's JFK airport and another in Wisconsin.

In 2007, at least five crash-landings of various Bombardier turboprops in Japan and Europe, some of them within days of each other, prompted the grounding of some airlines' fleets. And Federal Aviation Administration documents reveal at least three other landing-gear incidents with Bombardier jets since 2008. No deaths or serious injuries resulted from any of the incidents.

Ms De la Barrera said that the Q-300 and Q-400 (70-seater) are "among the highest-rated aircraft for safety ... when compared with other aircraft" and there had been a complete endorsement of the aircraft design by Transport Canada and European regulators following thorough investigations.

There are 1000 Bombardier turboprops in service worldwide operated by 100 airlines, and Bombardier has sold 23 Q-300s to Air New Zealand, which has Air Nelson as a regional partner flying under the Air New Zealand Link banner.

Federal Aviation Administration spokeswoman Alison Duquette, of Washington, told the newspaper that among the US aircraft manufacturers, "the bottom line is that we average two cases per year in which gear fail to come down and lock. On average, one of the two qualifies as an accident and one does not".

Bombardier officials warned that linking landing-gear systems and repeated failures was "circumstantial" since they were supplied by different manufacturers.

Air New Zealand has said the Dash-8 will be flown to Nelson -- with the landing gear locked in place -- for repair, once a special flight permit has been provided by Bombardier and the Civil Aviation Authority.

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