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26 245 Boeing or Airbus? in 1979 the air canada fleet was showing signs of fatigue. Many aircraft were more than twenty years old. With the globalization of airline activities in the offing, Pierre Jeanniot, who was then first vice-president of marketing and planning, had to look ahead at how Air Canada could technically and effectively be offering long-haul flights three or four years later. He felt that because the company was semi-public, this decision, which would involve costs close to a billion dollars, had to follow from a rigorous and transparent process. He still remembered the popular uprising and the student demonstrations in 1963, when the dc9 was chosen over the French Caravelle. Besides, given his training in Operations Research and his interest in technical matters, the dossier associated with the renewal of Air Canada’s fleet was particularly dear to his heart. He wanted things to be done properly, using the proper procedures. It was important to renew the fleet of long-haul planes, made up primarily of Lockheed l-1011 200s and 500s. Threemanufacturerspresentedthemselves:theAmericancompanyMcDonnell Douglas with its md11, the American Boeing with its 767 and the French Airbus with its 310. The first was quickly eliminated because it represented little improvement over the older model md10. And so there was a face-off between the Boeing 767 and the Airbus 310. Three teams were assembled: a commercial team, a technical team and a financial team. The three groups had to work in isolation from each other and to submit separate reports with recommendations backed up by data that was precise, detailed and objective with regard to their respective goals. The commercial team analyzed each aircraft from the point of view of its potential for generating revenue in various competitive situations, compared with other companies operating internationally: cp Air, obviously, but also the charter airlines, the low-cost airlines and other companies serving the same present and future destinations. The marketing specialists did market research and sketched out a profile of the consumers who would take these planes, how they would view them and what prices would correspond to their needs. In short, the team would have to make its choice between the two aircraft from the point of Taking Aviation to New Heights 246 view of their commercial viability, the attractiveness of their marketing image and the revenues that could be expected from them over five years. The technical team had a more precise mandate, which was to compare the reliability of the airplanes, their fuel consumption, their manoeuvrability, as well as the guarantees on their engines and parts. The technicians had to see how the maintenance crews in place could adapt their work to the constraints of each aircraft being evaluated: the budgeting for maintenance equipment and computers, additional training that would be more or less complicated, and the required adaptation of the workshops in Montreal and Winnipeg. They also had to compare the guaranteed availability of parts and components. Added to all this were the training costs for pilots and cabin crews unfamiliar with the new planes. As for the financial team, its task consisted in calculating the operational costs, the expenses, the profits or savings that would result, as well as the interest charges at one or another level, averaged over the next five budgetary years. The lawyers weighed the pros and the cons of different kinds of contracts, their methodology and their terms and conditions, according to different calendars. The amortization expenses, as well as the guaranteed resale price over the short or long term, were the object of detailed projections and several pro forma budgetary scenarios. The advisory report had to explain and justify the choice of the aircraft, bringing together all this data to the best advantage of Air Canada in the medium or long term. The three reports were presented at about the same time. Pierre Jeanniot was agreeably surprised to find that they were unanimous: the Boeing 767 outstripped the Airbus 310 in all categories. Pierre Jeanniot put together a fourth team, made up this time of close assistants whose role was to incorporate all the separate reports into a single one with an action plan. After having submitted a succinct version to the board, Pierre Jeanniot went to discuss it with his minister, Otto Lang, who in turn advised the Cabinet and the prime minister of the study’s conclusions. For reasons of international politics, it would seem, the prime minister, Pierre Elliott Trudeau...

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