RE: A question Hi Check,
I think after the merge, with all the regionals from both AC and Canadian it was probably unmanageable. Put them all under the same umbrella. simplified routes, ticketing, supply, etc.
I really don't think that AC will buy back Jazz. Why would they? They spun it out with much forethought and purpose. It was part of breaking up the different units to monetize them.
I was surprised when the spun out the maintenance division and then told them to bid on the chance to work on Air Canada planes. They found out that these planes can fly, and they can fly them to Asia and South America to get them worked on cheaper. Much was made of how the maintenance division was top notch trained and equipped, and they still could not land the contract to work on AC planes.
Jazz is in a similar boat. Yes they have the CPA. The year 2020 is mentioned when it will run out. AC wrote up the whole thing. They have clauses written in to specify what would happen if AC or Jazz went bankrupt. If the Arb ruling goes against them that may be used. I also think they have clauses in there to break it up sooner if either side wants. more like an agreement to agree than a contract. Again it was written up by AC.
Jazz was in a much better position when it was the only supplier of regional service to AC. When AC gave the Embraer jets to someone else to run I think that was a grave blow to Jazz.
There are other divisions that can be spun out as well. I used to work at YVR, left it about 4 years ago. Even at that time the ground handling unit was being put into it's own division. No longer just Air Canada. They are now Air Canada Ground Handling Services. Even the orange cones they put around the planes have the initials ACGHS on them. I think it is just a matter of time until they are spun out and will have to bid against the local ground handling firms at the local airports to service the planes.
Cabin cleaning and ticketing are also jobs that other local ground handling firms already do for other airlines. How long until AC spins them out?
I am sorry to sound so glum and dark about this, but I think that this is where it is all heading. AC will keep in house the flight crew and cabin crews. All others will be put outside the company and all non flight jobs will be put out for tender to the lowest bidder. They will not keep them in house or buy them back. They can contract it out cheaper. There always seems to be someone who will come along, willing to do it cheaper than the guy doing it now.
I was happy to hold CHR.B for the dividend, until they did not get the Embraer jets. When that happened I got out. I took a loss, but for myself I think it was the sign to move on.
Sorry to ramble, this post became really long.