Neha Jain: http://canadaaviationnews.blogspot.com/11

Air Canada is slated to begin talks Friday with the union representing 3,800 of its sales and service agents.

1. Air Canada earnings lifted by gains
Air Canada delivered a fourth-quarter result Thursday that fell just shy of analyst expectations as the country's largest carrier braces for collective bargaining with its various unions.

Labour negotiations are slated to begin with the Canadian Auto Workers, which represents 3,800 sales and service agents at the airline, in Toronto Friday.

The CAW, whose current contract expires on Feb. 28, rejected what it called a "meagre" one-time $27-million performance incentive offered to Air Canada employees in the fourth quarter, saying they will seek "a real wage increase" in bargaining.

"Our members' wages have not even kept pace with half the rate of inflation since 2002," CAW president Ken Lewenza said in a statement. "This is deplorable."

Discussions have already commenced with the pilots union, whose contract expires on March 31, but no dates have been set with its flight attendants' unions or the machinists' union, whose contracts expire on the same day. All five of Air Canada's unions have placed wage increases at the tops of their agendas after agreeing to a 21-month wage freeze and moratorium on the airline's pension contributions over the same period in July 2009.

Calin Rovinescu, Air Canada chief executive, said he has made a concerted effort to keep Air Canada's unions abridged on the airline's finances over the past two years.

"I sincerely believe we have a good foundation to find common ground, and achieve a satisfactory outcome," Mr. Rovinescu said on a conference call.

The news comes as the carrier reported a net income of $134-million, or 42¢ a share, in the fourth quarter -- compared to a net loss of $56-million (25¢) for the same period last year -- aided by a onetime $111-million foreign exchange gain.

Excluding that, and other one-time items, it reported a 6¢-a-share loss, steeper than the Street's consensus of a loss of 4¢ a share.

Analysts tend to measure their expectations for Air Canada on its earnings before interest, taxes, depreciation and rent [EBITDAR] due to the volatility in its numbers and numerous one-time charges. The airline said its EBITDAR doubled during the quarter to $334-million from a year ago, on improved demand, higher airfares and better cost controls.

Revenue rose 11% to $2.6-billion for the quarter. Unit revenue, as measured by revenue per available seat mile, improved 3% system-wide, primarily due to higher fares.

Management said they were also on track to improve their balance sheet by $530-million by the end of 2011 through various revenue and cost initiatives. "The results reported today confirm that we are indeed headed in the right direction," Mr. Rovinescu said on a conference call.

Meanwhile, Air Canada continues to try to secure terminal space at the Billy Bishop Toronto City Airport in talks with Robert Deluce, who is chief executive of both Air Canada's rival, Porter Airlines Inc., and the airport's terminal operator, City Centre Terminal Corp.

Air Canada already has its planes parked at nearby Pearson International for the new Air Canada Express service from the Island, and is "ready to go" once a deal is stuck.

"We are operationally ready to resume service at the Island airport," he said, but added he had no timeline for when the talks would be completed.

Air Canada had originally planned to launch service from the Island in February. Mr. Deluce would not comment Thursday on the state of the talks.

Geoffrey Wilson, chief executive of the Toronto Port Authority, which oversees the operations of the airport, said, "We will facilitate the discussions to a successful conclusion as requested and appropriate to the parties' needs."

2. WestJet makes Delta connection

New revenue, profit sources and destinations within reach under pact
WestJet Airlines Ltd has entered into a partnership agreement with Delta Air Lines Inc. as the Canadian carrier seeks expansion avenues in the large U.S. market.

WestJet, Canada's second-biggest airline, said Monday it has signed an interline agreement with Delta, the second-largest carrier in the United States, that will allow customers of both airlines to purchase connecting flights on one ticket.

The agreement -the latest of several such deals for WestJet -helps the carrier in its quest for new sources of revenue and profit, while trying to attract lucrative business passengers.

WestJet's shares were 20 Canadian cents, or 1.5 per cent, higher at $13.40 on the Toronto Stock Exchange on Monday morning.

"In the long term, this is a good growth opportunity. In the short term, it will generate some traffic," said Canaccord Genuity airlines analyst David Tyerman.

"But to me the big prize (for West-Jet) is flying into the huge number of cities that they are not flying into that are more business-orientated . . . like Chicago," he said.

Calgary-based WestJet, which began operating in 1996 as a lowcost carrier, is slowly adding services to attract nonbudget passengers. It flies throughout Canada and to the Caribbean and Mexico. In the U.S., it flies mostly to sun vacation destinations.

The company has made partnership agreements a central plank of its expansion strategy.

The Delta deal is its second U.S. interline agreement in the past four months, after it partnered with American Airlines in October.

WestJet also has interline deals with British Airways Plc and Air France-KLM. In October, it struck its first code-share arrangement with Cathay Pacific Airways.

Interline deals are often precursors to code-share deals, in which carriers sell tickets on each other's airline.

These pacts boost revenue because airlines can offer more destinations, while keeping a lid on costs, as they don't need to service all the planes themselves.

The agreement with Delta, effective immediately, allows customers to receive boarding passes for all segments of their trips at their first check-in and to tag bags through to their final destination.

Passengers now can connect between WestJet and Delta flights at more than 25 gateways in Canada and the U.S., the airlines said in a statement.

3. Delta Air Lines (NYSE:DAL)’s Canada Deal, Eh?
The second largest airline in the US, Delta Air Lines (NYSE:DAL), has signed a interline partnership agreement with Canadian carrier WestJest Airlines.
This partnership will allow customers to get connecting flights on one ticket and to receive boarding passes at their first check-in for all the segments of their trip. The passengers can tag their bags to their final destination.
Delta Air Lines (NYSE:DAL) will soon start to sell seats for WestJet Airlines. Customers can connect between airlines from about 25 gateways in Canada.
Delta Air Lines (NYSE:DAL) shares are currently standing at 11.74.

4. WestJet opens throttle in Eastern Triangle

WestJet Airlines Ltd. (WJA-T15.330.281.86%) is mounting a multipronged attack against Air Canada (AC.B-T3.410.020.59%) and Porter Airlines Inc., declaring war against its rivals in an ambitious gambit to woo business travellers in the crucial Eastern Triangle battleground of Toronto, Montreal and Ottawa.

Calgary-based WestJet will ramp up its flight schedule at Toronto’s Pearson International Airport in May, while dangling an array of incentives designed to boost its ticket revenue in the country’s busiest corridor for passenger traffic.