Mon, Jun 20, 2005
Air Canada Notifies Boeing of Aircraft Order Cancellation
Following Results of Pilot Vote
Air Canada has
disclosed that it has been informed by the Air Canada Pilots
Association (ACPA) that the tentative agreement on costs and other
issues relating to the Boeing order has been rejected by the union
membership. ACPA leadership had recommended ratification of the
tentative agreement which had been negotiated with the assistance
of Mediator Mr. M.G. Mitchnik. The Company accepts the pilots'
decision and has notified Boeing of the order cancellation.
The agreement with Boeing announced April 25th was subject to
the successful completion of certain conditions including the
negotiation of satisfactory terms by the airline with its pilots.
The order is subject to cancellation without penalty.
"We are naturally disappointed at having to cancel the wide body
aircraft order but these aircraft can only be brought into our
fleet on a pre- determined economic basis. Despite best efforts on
the part of ACPA, the agreement has been rejected," said Montie
Brewer, President and CEO of Air Canada. "Following a successful
restructuring, Air Canada has been transformed into a viable
carrier. We cannot lose sight of the effort it took to get to where
the airline is today and while the cancellation of this aircraft
order will be disappointing to our employee group at large,
including many of our pilots, it is the right decision given the
circumstances.
"The cancellation of
the order is not material to our business plan over the next few
years. There is no longer a requirement for a cash outlay to secure
the order and we will seek to find alternative aircraft (of types
covered by the current collective agreement) in the used market for
the three 777-300ER aircraft contemplated for 2006 delivery under
this order (two for Q2/06 and a third during Q4/06). We will adjust
our plans and it is anticipated that the company will continue to
grow on an unaltered basis. The critical component of the Boeing
order were the 787 aircraft scheduled for delivery in 2010 and
beyond to replace our Boeing 767 fleet. In time we will re-address
this requirement.
"I thank ACPA's leadership for their efforts to secure an
agreement which would have allowed us to go forward with ordering
new aircraft at this time. It is naturally my hope that in time we
will find ways to bring new aircraft into the fleet in a manner
acceptable to the company and our pilots," said Mr. Brewer.
The agreement with
Boeing included firm orders for 18 Boeing 777s, plus purchase
rights for 18 more, in a mix of the 777 family's newest models: the
777-300ER, the 777-200LR Worldliner, and the newly announced 777
Freighter. Air Canada's 777 deliveries were scheduled to begin next
year with the arrival of three 777-300ERs in 2006. The renewal plan
also included firm orders for 14 Boeing 787 Dreamliners, scheduled
for delivery in 2010.
Montreal-based Air Canada provides scheduled and charter air
transportation for passengers and cargo to more than 150
destinations on five continents. Canada's flag carrier is the 14th
largest commercial airline in the world and serves more than 29
million customers annually.
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