WJ vs. AC......performance

[True North]

Supposed to get 2 More 767's,deal didn't go through so won't be getting anymore, it will just be the 4 for now for WJ.

I was told that's because the agreement with the pilots is only for 4 widebody aircraft and the company was not able to renegotiate the LOA in time to make an offer on the available aircraft. Please tell me that's not true.

[altiplano]

[
Is there a Canadian flag on AC's livery? There's always been one on WJ's....

Just sayin'......

What are you just saying?

You guys are pieces of work. Circle the wagon and misdirect all you like. The fact is the crippled AC of years past is turning around and the narrative you're hanging into is one from 15 years ago. Yet with recent problems, a mature workforce and the end of growth at westjet you'll be wondering what happened...

3 ex-Westjet pilots in Air Canada ground schools last month...

Realitychek/bean your analytics are flawed and you certainly don't reveal the entire picture. Clearly your horse can do no wrong and with your personal grudge with Air Canada due to a history resulting in resignations, law suits, settlements and apologies, I doubt they can ever do right in your eyes...

[Realitychex]

[
Is there a Canadian flag on AC's livery? There's always been one on WJ's....

Just sayin'......

What are you just saying?

You guys are pieces of work. Circle the wagon and misdirect all you like. The fact is the crippled AC of years past is turning around and the narrative you're hanging into is one from 15 years ago. Yet with recent problems, a mature workforce and the end of growth at westjet you'll be wondering what happened...

3 ex-Westjet pilots in Air Canada ground schools last month...

Realitychek/bean your analytics are flawed and you certainly don't reveal the entire picture. Clearly your horse can do no wrong and with your personal grudge with Air Canada due to a history resulting in resignations, law suits, settlements and apologies, I doubt they can ever do right in your eyes...

The bottom line has always been and always will be the bottom line. Focus on verifiable data, not anecdotal stories and spin.

[mbav8r]

Realitychex, your entire argument is based on the fact WJs margins are higher and if oil has a significant rebound AC is doomed. Are you saying that WJ would let oil erode those margins? Just sit by and watch their profits plummet?
I find it humorous that with all the "growing" pains WJ has been experiencing as of late, anyone would try and compare a nearly 80 year old former crown corporation to one whose starting captain pay was 55.00/hr, have I thanked you for that lately, you better get your cost creep in line.
How long before Saretsky adds E175s or Cseries to Encores operating certificate? After all it was modelled after Horizon, almost identical, only a matter of time I suppose.

[altiplano]

Good point mbav8 -

and when Boeing pulls the plug on the max-7, which has only 2 customers including westjet, there is going to be a gap to fill.

I wonder where those RJs or whatever will go? Then 4 types on the card? Maybe 5 if the 787 ever shows up...

Starting to sound familiar...

westjet wants into the 'big leagues' and wants to be an international network carrier... gonna show everyone how it's done. LOL.

[YYZSaabGuy]

Is there a Canadian flag on AC's livery? There's always been one on WJ's....

Just sayin'......

That's a spectacularly stupid question, equivalent to "Does the word 'Canada' appear in WJ's name? Because it's always been part of AC's.... Just sayin' "
What the hell do you plan for an encore? "My old man could beat your old man........."?

[Transonic]

Mostly just tired of Realitychex.......his/her argument did nothing to explain why Air Canada still exists today......and in it's current form.

I think he has explained that tirelessly. A low interest rate environment combined with cheap fuel is funding an irrational expansion. Why is it irrational? Growth is sacrificing yield for marketshare. Why do I care? Our WS stock price, which is now only rising after a year of decline. Why did that happen? The street became concerned in 2014 that our competitor is engaging in destructive completion for marketshare. (Our stock started its decline prior to the Alberta economic concerns) Does ESPP align the interests of the employee with the interests of the company? YES!!!!!!

Realitychex, I suppose AMS would be also be grouped with CDG as an over serve market?

[Transonic]

Good point mbav8 -

and when Boeing pulls the plug on the max-7, which has only 2 customers including westjet, there is going to be a gap to fill.

.

If they do, then the "MAX 7.5." It would be a shrink of a MAX 8 sharing the same wing structure, fuel capacity and uprated engines resulting in a 4000nm 150 seat aircraft. Boeing is looking to make a pivot due to the loss of sales to the NEO.

http://www.wsj.com/articles/boeing-cons ... 1461259670

[fish4life]

One of the Max 7 orders is from southwest so I'd imagine it's safe. SouthWest can get anything they want from Boeing

[groundpilot]

Mostly just tired of Realitychex.......his/her argument did nothing to explain why Air Canada still exists today......and in it's current form.

I think he has explained that tirelessly. A low interest rate environment combined with cheap fuel is funding an irrational expansion. Why is it irrational? Growth is sacrificing yield for marketshare. Why do I care? Our WS stock price, which is now only rising after a year of decline. Why did that happen? The street became concerned in 2014 that our competitor is engaging in destructive completion for marketshare. (Our stock started its decline prior to the Alberta economic concerns) Does ESPP align the interests of the employee with the interests of the company? YES!!!!!!

Realitychex, I suppose AMS would be also be grouped with CDG as an over serve market?

I guess all the new hires that got on the B777 recently should just quit and apply to Encore to get on those Dash 8s...to then maybe hope for a prayer to fly a B737

[fruitloops]

Thought I would look at a longer term chart of both WJA and AC and it reveals that both companies are pretty much trading identically. So market sentiment and reactions to both companies have been similar over the past 3 years. I'm talking trends not specific stock prices of course.

WJ was in an uptrend through the end of 2014 and so was AC that lasted just a few months longer. Thereafter, both began downtrends which both ended in Feb/Mar 2016.

Are the airlines really performing that differently? Not really when you look at the directions and timing of these trends.

One thing to note is that the price of oil traded somewhat proportionally to these stocks, not inversely as one would think. I think that demonstrates that the overall economy is a much greater factor on airline trends than the price of oil itself for both WJ and AC.

[True North]

Thought I would look at a longer term chart of both WJA and AC and it reveals that both companies are pretty much trading identically. So market sentiment and reactions to both companies have been similar over the past 3 years. I'm talking trends not specific stock prices of course.

WJ was in an uptrend through the end of 2014 and so was AC that lasted just a few months longer. Thereafter, both began downtrends which both ended in Feb/Mar 2016.

Are the airlines really performing that differently? Not really when you look at the directions and timing of these trends.

One thing to note is that the price of oil traded somewhat proportionally to these stocks, not inversely as one would think. I think that demonstrates that the overall economy is a much greater factor on airline trends than the price of oil itself for both WJ and AC.

Oh come on fruitloops, you're applying metrics and common sense. Way to hijack the thread.

Diatribes only!

[watermeth]

that's interesting to see they both follow the same path.
do you have events for March & october 2014 besides quaterly reports ?

[altiplano]

You've got to look closer at the chart though to see really what the market is saying.

west jet peaked up ~50%, and now is back down to where it was 3 years ago.

Air Canada peaked up ~1300% and back down to being up overall about 900% in that same period.

[aerobod]

A view of share prices over the past 10 years:

[watermeth]

to stick to the basics, cash per share, net margin ratio and long term debt over equity are key elements to determine a company's health and capacity to make money.
stock price doesn't mean much compared to value. price is only the mirror of what investors are willing to pay to obtain this particular stock. it comes and goes with good or bad news, newspaper's front page, media coverage, etc... just look up bbd. price is more or less bs because it will always have a tendency to go back to its value when tough times show up UNLESS the company is in a solid good economic health.
however a significant drop or rally has its reason. It's interesting to know why.

[Duke p]

Mostly just tired of Realitychex.......his/her argument did nothing to explain why Air Canada still exists today......and in it's current form.

I think he has explained that tirelessly. A low interest rate environment combined with cheap fuel is funding an irrational expansion. Why is it irrational? Growth is sacrificing yield for marketshare. Why do I care? Our WS stock price, which is now only rising after a year of decline. Why did that happen? The street became concerned in 2014 that our competitor is engaging in destructive completion for marketshare. (Our stock started its decline prior to the Alberta economic concerns) Does ESPP align the interests of the employee with the interests of the company? YES!!!!!!

Realitychex, I suppose AMS would be also be grouped with CDG as an over serve market?

"Irrational growth".........irrational based on what exactly?? You know nothing of the go forward strategy....it doesn't "look right" to you, and you don't understand it, hence.....???

CEO's, brilliant CEO's I might add, care not what you deem "irrational".

There is a plan......just watch, and quote me later.

DP.

[Fanblade]

A low interest rate environment combined with cheap fuel is funding an irrational expansion. Why is it irrational? Growth is sacrificing yield for marketshare.

Air Canada and US airways were the only two airlines in North America to follow the Seabury plan of chasing yield following the bankruptcies of the early to mid 2000's. Use of smaller aircraft to attempt to right size a market. Keep supply tight and yield high. It doesn't work. US Airways went bankrupt twice. Air Canada went bankrupt almost twice. US Airways started their upguaging and densification process ( chasing CASM) by the end of last decade. Air Canada not wiping their balance sheet clean a second time, took well into 2012 to begin the upguaging process. This is a transition that continues today and will not be complete for a few years to come.

A couple of examples.

5 years ago YYZ - YVR was almost entirely narrow body. Today the route has five flights a day less, yet an increase of seats available as the route has transitioned to far more wide bodies. Remember many of these wide bodies coming into the fleet are narrow body replacement, rather than fin growth. AC has shed 35 narrow bodies in the last 4 years.

5 years from now AC's tier two feeders will be the same size as they were 5 years ago. But they too are going through fleet renewal and upguaging. Same amount of aircraft but twice the amount of seats.

The vast majority of AC's growth is not flights or destinations. It's mostly seat growth through upguaging, densification and better utilization. AC's overall fin count has barely changed. Pilot numbers are up but only by a couple hundred. Normal retirement rates of 100-150/year are transitioning back, so although hiring is strong attrition is increasing.

So what is actually going on? What does upguaging and densification do to yield/revenue/CASM? The densification happens in cattle class. This drives down the yield/seat mile of the entire aircraft because the percentage of cheap seats increases. This creates a situation of decreasing yield/seat but an overall increase in revenue. Upguaging and densification also drive CASM down. So although yield/seat is dropping, revenue/flight is climbing and CASM dropping. So long as CASM drops faster than RASM all is good. This isn't Majic. AC is simply following the lead of the America legacy carriers, albeit 10 years behind.

Why do I care? Our WS stock price, which is now only rising after a year of decline. Why did that happen? The street became concerned in 2014 that our competitor is engaging in destructive completion for marketshare. (Our stock started its decline prior to the Alberta economic concerns) Does ESPP align the interests of the employee with the interests of the company? YES!!!!!!

Your competitor is not behaving in a destructive manor. They are evolving into a better competitor. Slowly moving away from one business model in the direction of another. That won't change. I admit there has been a lot of misunderstanding about how and why AC is transitioning from one business model to another. However if you understand it, you quickly realize why it makes sence. The model in simple terms is to gauge match or out gauge your competitor.

The small jet purchase was probably one of the biggest gaffs in AC history. Notice how I can be critical yet at the same time supportive of the company I work for. They made a large error. WJ has benefited from that error. As the error gets corrected competition will increase.

WJ is also evolving. I suspect they too will start to follow suit with larger aircraft. That's what competitors do. You have already started with dumping some 600's in favor of 800's. I wouldn't be surprised at all to see an increase of widebody transcon. I don't believe WJ might make a widebody order soon. I believe they have no choice but to make one. I suspect those Max-7's might become -8/9's as well.

Cheers.

[Airbrake]

"WJ is also evolving. I suspect they too will start to follow suit with larger aircraft. That's what competitors do. You have already started with dumping some 600's in favor of 800's. I wouldn't be surprised at all to see an increase of widebody transcon. I don't believe WJ might make a widebody order soon. I believe they have no choice but to make one. I suspect those Max-7's might become -8/9's as well."


WestJet has not offloaded any -600's yet. Attempted but found no takers.

[Fanblade]

I thought Southwest took a half dozen 600's?

Not that it makes much difference. There is no difference between actually of loading, and attempted offloading, when both speak to the lack of desirability of a smaller narrow body.