CANADA NOT LEADING THE WORLD WITH SOPHISTICATED INVESTORS 

A column "Look Internationally for Flying Financial Fitness", I wrote two years ago, pointed out that while Air Canada's net profit was $46 million dollars for the year, with 109 planes (or $422,000 per plane), Cathay Pacific made a $500-million-dollar net profit with just 25 aircraft (or $20 million per plane).

About that time stock brokers and Air Canada began beating the drums and hyping the forthcoming partial privatization of our national airline. Stock sold at $12. It has now dropped to $7.50. This year Air Canada has made a net profit of $44 million from their 107-plane fleet. That's $411,000 per aircraft. Meanwhile Cathay Pacific's fleet of 39 aircraft made $425 million or $10,897,436 per aircraft... almost $11 million per plane.

Recent Cathay profits are down slightly, not because of operating losses but because they have acquired and already have in operation more new planes, including the finest passenger plane flying: the Boeing 747-400 series that allows non-stop flights - in either direct - from Hong Kong to London or Vancouver without refuelling!

What has Air Canada done to counter their miniscule profit? They have allowed salaries to rise ten percent in the last quarter alone. If only their services could keep going upward. There is no comparison between passenger service aboard Air Canada and aboard a Cathay Pacific flying machine. With the former, passengers are treated like cattle. Air Canada flight attendants wearing union buttons -- even while flying -- berate the carrier. On the other hand Cathay Pacific understands what good service really means.

Canadian investors who have been taken in by the roll of nationalistic drumbeats and patriotic fervor have only themselves to blame when, as the world globalizes it is apparent that in the field of efficient management Air Canada is out to lunch. They are not alone. Many, large Canadian organizations are in the same bureaucratic cubby-hole, restricting incoming information until their cubby-holes are plugged and nothing gets in or out. The luxury to make such leisurely decisions by alleged business executives is over. Dependency on education and experience from another time and world just doesn't cut the cookies in today's fast-moving environment. No longer can a national carrier lumber along like an elephant with arthritis. An efficient executive today must move like a gazelle and be able to change directions quickly. Air Canada seems unsure of even the direction it's going.

I suggest they get a new president, and if they want to be alive much longer -- hire a woman for the position. It's obvious that many executive decisions can't go by the book anymore. That system is obsolete. Fast decisions are better made with intuition. Many men haven't even yet learned how to spell it.

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