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Air Canada says cancelled airplane deal no setback to expansion plans
Air Canada cancelled a $6 billion Boeing 777-787 order it placed in April.
The order was cancelled after pilots rejected a new agreement last weekend. The order was contingent on several stipulations, including a new contract with the pilots.
The massive order included eighteen 777s, plus purchase rights for eighteen more of a mix of 777’s and others. Deliveries were to have started next year.
The airline had counted on the deal to open new routes and cut flying costs. But CEO Montie Brewer said the transaction was “not material” to the company’s growth strategy.
“We will adjust our plans and it is anticipated that the company will continue to grow on an unaltered basis,” he said.
He said the airline would find alternative aircraft, probably in the used market.
“This does not change our plans, our vision or our potential; we will just have to do it differently,” he said.
One option for Air Canada to continue expansion plans would be to order more Airbus A 340s from European aircraft maker Airbus.
The airlines, 3,100 pilots rejected the deal in part because of growing dissatisfaction from members over seniority conditions, according to media accounts.
The airline said the new Boeing planes would have saved up to 30% on operating costs.
Air Canada is raising fares to offset spiraling fuel prices.
Base fares for flights within Canada are being raised each way by $8 Canadian on short-haul flights and $10 on long-haul flights. The increases just went into effect.
Report by David Wilkening
David
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