Strangely, the company refused to elaborate on its original press release, letting the talking heads speculate endlessly about how it's going to get impossibly expensive to get anywhere, if you can get a flight at all -- and all because of the new bane of our existences, super expensive oil.
But none of these so-called journalists referenced a story that has been getting a lot of coverage in Europe, Asia and Australia, but oddly enough is barely on the radar here -- a story that might offer a far different explanation for what's happening in the airline industry.
Since 2006, there's been a major investigation into price fixing among many of the world's airlines, specifically in the realm of air cargo. So far, four carriers have pled guilty to manipulating such things as fuel surcharges, including Quantas, Air Korea, British Airways and Japan Airlines. Quantas paid a fine of $61 Million and its boss went to prison. JAL just handed over $110 Million for its involvement and British Airways may have to fork out 10% of its annual sales or $850 Million.
That's because in addition to BA's $300 Million fine, each of the convicted airlines are facing class action suits to the tune of hundreds of millions of dollars. That'll buy a lot of those little bags of peanuts -- or maybe pay the salaries of a few thousand Air Canada employees.
You see, back on Christmas Eve, Air Canada was put on notice by investigators in the EU that they were under investigation and in April announced they were setting aside $125 Million to deal with the problem. They haven't been convicted yet, but so far the guys going after the airlines are batting a thousand.
You can read their full scorecard here.
Interestingly, that money was set aside just a few days before Air Canada announced their most recent fuel surcharge and an additional fee for those traveling with a second suitcase. Perhaps coincidentally, there was also a further devaluing of Aeroplan points. Now those two lonely seats available on the Toronto-Windsor red-eye next November will take even longer to save up for.
So, the question that's been bugging me all day is -- are 2000 people losing their jobs because the price of oil is too high or because the guys who run the company might be crooks?
We've been through an incredible series of corporate financial disasters from Enron and Worldcom to the current sub-prime mortgage fiasco in the US. And you've got to wonder if this white collar crime spree has more to do with the overall downturn in the economy than how much a barrel of oil costs.
It just seems to me that you can't make billions of dollars of people's savings go away and not have a profound effect on everyday life.
I've heard theories that because nobody trusts corporate accounting anymore, most of the market players have shifted from trading stocks to speculating in commodities, thus driving up the price of oil, corn and gold beyond what they're really worth.
I don't know enough about economics to know if that's true, but I sure know how much the shenanigans that have gone on in the Canadian TV and film industries have done to devalue our situation, so it sorta makes sense. And if there's a conviction in the Livent trial, I fear the small pools of private money still available to the arts will dry up even further.
I used to like Air Canada and flew them as often as I could. But several years ago, they started to change. The staff felt surly and glum and little by little the nice things about traveling with them disappeared. I honestly can't remember the last time I was on one of their planes, let alone the last time I even considered checking what they had to offer when I'm booking a flight.
And it's hard to come to grips with the fact that an airline that's considered the national carrier and paints the name of your country on their side may have been involved in criminal activity and screwing you more than by showing "Big Mama's House -- 1 & 2" as their transcontinental double feature.
I know it's probably hard to run an airline and I'm sure paying for jet fuel is a bitch. But I also wonder how many of those 2000 soon to be unemployed people you could keep if you didn't have to set aside $125 Million to cover a fine.
Or maybe you could keep them all and simply get rid of the handful of guys at the top who fixed prices in the first place.
4 comments:
To add to that is the continuing investigation into oil price fixing. The demand for oil is down while the supply has not been materially effected by the continuing conflicts around the world. The industry oil supply is building up and they will probably run out of storage capacity within a year or two at the current rate. The market price for oil would be about half what it is but for the "fear of war" profiteering.
So the airlines are blaming their price fixing on the price fixing of another industry?
I note this just as an intellectual exercise since I am pretty much laissez-faire in my economic policy. The airlines and oil companies espouse that for their pricing as well... they just want us to ignore them being bailed out, subsidized and protected by the state okay?
See this is what happens when we all don't do our jobs.
And I almost can't even blame these fuckers - they screw with the system a bit and don't get caught so next time they do it again but on a bigger scale. By the time they get caught they're so far up their own asses you have to pry them out with a crowbar.
Yet each and every time they give us that look like 'what?!'
If there's one thing that's becoming desperately apparent here it's that we (I mean as as species) have been letting unchecked greed run rampant, nestled in our soft comfy beds of easy food and instant gratification. We've been put to bed by these bastards while they went to town.
Only thing is now they're hooked to their own product and they can't stop. They've made the big bucks but are now trapped by it and the seams are starting to split.
Even worse, they're getting caught - not by the system that they know how manipulate - but by ANGRY, ANGRY people who're just waking up to find out that someone swiped their wallets while they were dozing.
It's going to get much, much worse as the truth starts to come out and people realize just how royally they've been fucked.
What's funny is it's not even the first time this has happened.
This is just the latest incarnation of the same beast.
Unfortunately Darth Helmet had it somewhat right when he said "Evil will always triumph because Good is dumb".
Of course the word 'dumb' needs to be changed to 'lazy' or 'apathetic'.
Pop some popcorn guys, the next 3 months are going to be quite a show. The global market is going to tumble in a big way - if you've got stocks and shit, I'd start clearing house now.
Good luck (and yeah, I brought my cup :P)
They aren't screwing the system, that is the system. Our job is simply to pay or not pay the price they are setting and we do that as a matter of course.
And please remember that "greed" isn't limited to the corporations. If someone can explain to me how a union isn't labour price fixing I would appreciate it. Any explanation that is based on the worker "deserving" anything is an argument based on greed since it has been a long time since any labour dispute in a developed country has been for a need rather than a want, and by definition greed is a desire to acquire more than one needs or deserves.
We need air, water, food and shelter enough to keep the elements from killing us of exposure. Of course that doesn't mean the universe (or society) owes us any of that.
"Deserves" is a subjective value that would be set by the market if it wasn't interfered with through laws that regulate price fixing by corporations or unions.
Hey Clint,
Well, you're certainly right in a sense that some Unions do take advantage of the system - hell, talk to anyone who works for the government (or the TTC) here and they'll tell you what their job entails.
However, there are some unions that are needed because it's proven - time and time again - that given the choice between treating their employees right (giving them a fair deal) or outright screwing them over most companies - especially the larger ones with less of a personal attachment to their workforce - will do what's right for the shareholder and not for the employee.
Perfect example: say someone's mom dies and they're told 'you have to choose between your job or your family'. In a unionized situation, that would never happen.
Do things get out of control? Absolutely and that's why I originally said:
"If there's one thing that's becoming desperately apparent here it's that we (I mean as as species) have been letting unchecked greed run rampant"
As far as society goes, we all pay our taxes into it - the system - because we all want or EXPECT something in return: That they will take care of us in exchange for our money. And as long as I'm paying into the system then I damn well expect something back for my money.
Though, honestly, nothing's stopping you from quitting the system - you can move to the mountains and be free of society all you want - many have done it. But then you lose all the perks.
The root problem is that a lot of people try to create this 'mound' of crap once they start a family. They want to have 'stuff' to leave for their kids, they need to have a house and a car and a legacy. Is it wrong? No, not in theory, but now you've got millions of people all scrambling to grab all they can and keep it from one another. The more money you have, the more crap you can grab for yourself because that's the power we allow 'money' to have.
If we had infinite resources, this wouldn't be a problem. But we don't and thus it is. Now imagine that on a Global scale - unchecked ambition with mass amounts of hoarded power granted to small amounts of people.
That, in theory, is why we have laws. To ensure that all people get a fair shake, that no one's just going to come along and murder you and take what you have or steal what you've earned. Do they work? Well, that's a whole other story - sometimes. Laws only work when the masses stay informed and an active part of the system (though sometimes not even then).
At the end of the day, we are all interconnected - and not in some silly, stoned-out hippy kind of way I mean that our actions affect each other directly proportionate to the amount of power we have. When we work together with a common interest - well, that's when shit gets done. That's when COUNTRIES are formed or wars get ended (or started...).
It's not easy to keep the system in check but it's not easy because the system is way out of whack. We have a few trying to watch the many - as opposed to the many trying to watch the few.
Most people just want to do their thing, live their life, be happy. When we stop looking out for one another, that's when this shit starts to take root. That's when people stop looking out for one another, that's when we stop communicating and that's where corruption thrives.
The saddest thing is that it's the easiest thing in the world to fix. You just have to give a damn and convince the person beside you to give a damn.
Easy-peasy, right?
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