On the topic of the Air Canada strike, it was pointed out that while the company did make over $400 million in profit last year, a large portion of this was from the sale of their interest in Continental. The current strike has already cost the airline about $150 million, so even if they are back in the air next week, with a slow ramp up to previous levels, the prospect for a similar profit for this year is not good. The flying Princess commented that the strike was a real inconvenience, and a councillor said that she had no sympathy for the pilots. She also reminded us that the regional pilots are not part of the same union and consequently earn far less.

The pilots in the room confirmed that the pilots earn their keep in the first and last five minutes of a flight, and the rest of the time is spent monitoring dials. They also underlined the fact that newer planes though larger are easier to fly. Pilots are now paid by the tonnage of the aircraft. The average pilot's income has increased by 36% in real terms.

At least one guest suggested that the Air Canada offer on the table is too generous. While nobody will argue that people do not have the right to withold services, but if unions can withdraw labor (and hold the public hostage), then why shouldn't management have off-setting rights.

"Things have come to a pretty pass", commented one guest "when individuals earning over $100 000 a year are unionized". Martin Barnes passed on a comment from a friend that the morale at Air Canada is low. According to a guest with considerable experience, USAir is really bad. With all the publicity focused on the pilots and the company, there is little mention of the hardships encountered by all the other employees who have been laid off because of the strike. The aftermath is not going to be pleasant. Many employees resent the power of the pilots and mechanics (unions). The latter contract comes up for re-negotiation in April.

The industry suffered $14 billion of losses in 91-93 due to a price war and an oversupply of seats. Then, following the standard economics laws of supply and demand, including computer based yield management, the industry rebounded in 94-95. The U.S. and Canada were slower to recover and returns were in the 6 to 7% range. Some shareholders did make a lot of money, but the Asian meltdown led to a switch to North Atlantic routes where no one is making money.

At this juncture Clarence Epstein arrived with a guest who is with Barclay's Bank. Therefore the discussion turned back to the Canadian economic situation - it was stated that while fruit and veggies will be more expensive, given the decline in the Canadian dollar, the inflation rate will still hover around the 1% mark - the best of the G7 countries. US wage settlements were in the 4% range.

David Marler reiterated that, Montréal is "a great place to live.We should prize and value Montreal." Misha, confirmed this point. Based on his own evaluation, which used 11 UN indexes, he created his own "Quality of Life Vector", and yes, Montréal came out to be his choice, not that there couldn't be improvements…. "It is the place to be now. The US is NOT Nirvana". Other comments on the US, included that it is a "rough society" (referring to the judicial and police systems), "they are maniacal about law and order", "Guns everywhere create an aura of violence". The United States was in 17th place in the same OECD evaluation that placed Canada first. Don't be too smug, however, the latest OECD results take into account the scale of poverty in Canada and we will see Canada's ranking drop.

Brian Morel pointed that there is a distinct difference in the cultural values between the two countries. Racial hatred still exists in the States to an extent that it does not in Canada.

The differences between the US and Canada are summed up in the their charters. The US Constitution sets as a goal "Life, Liberty, and the Pursuit of Happiness", while the Canadian Charter aims for "Peace, Order and good governance". Québec with its two cultures is unique and the two enhance each other in a synergistic way.

On Clinton and his problems, Brian said that the States is the largest purveyor of pornography - the young there accept sexuality, but it is clear that the sexual culture, and values need to be re-evaluated there. The minister commented that the problem with Clinton is not the sex, but the lying under oath. This may be grounds for impeachment. The fundamental problem, in the view of one expert is that Americans cannot deal with a President who lies - how, then, to deal with your own children? Will Congress reflect the will of the people? Will Larry King? The U.S. public is split and the media simply want to create stories; European attitudes are different regarding private life vs. public life - and Canada is fortunate that in this respect we are more like the Europeans. Meanwhile, will Clinton go quietly - will he jump or will he be pushed? Stay tuned. [we do not kiss and tell .. and if pressed fudg]

Back to planes - Air Canada has some $2 billion worth of new planes on order. These would be needed to be competitive, as yes - there is room for two airlines in Canada. There may well be an alliance between Air Canada and either Delta or United.

On the subject of SR111, our expert said that the wiring in planes is now the subject of intense scrutiny. The US Navy has decided that CAPTON, the lightweight electrical insulation used in planes, is a fire hazard, and has excluded this product from any new planes acquired. The MD11 uses this product, and problems have been detected with many planes carrying CAPTON, including the SR111 plane. The FAA has issued a number of service bulletins for specific corrections to be made on the fleet of planes. This applies to all US carriers, and also airlines that fly into the US. Swissair is known tobe very thorough in its maintenance practices. IATA acts as a coordinating agency to see that these service bulletins are distributed and applied. Other flying references included comments that many a ditching at sea had been successful. see #856 Air Canada Night with Robin Wohnsigl VP AC

Provided the pilot has control of the plane, and the angle of attack is moderate, then a sea ditching will work.

At the close of the evening David Marler thanked Stephen Poloz for the clarity of his explanations of the financial scene and the guests enjoyed a recess which included many good wishes on the occasion of Susan Eyton-Jones' birthday, including a burst of song and further celebratory activities!