Air Canada Wins Toronto Gate Dispute With WestJet

[Rebel]

Right Seat Captain

I guess time and market conditions will tell. In the long term I'm not very optimistic about young people choosing aviation for a career. No corporation can survive very long on a profit margin of 1% and the world's airlines try to do this. The majority of companies couldn’t survive on a 10% margin so why do the airlines think that they can do the impossible.

This subject always reminds me of the old airline millionaire joke. Start off with a billion. lol


N2

You have a problem, seek help..

[Right Seat Captain]

Rebel,

That profit margin depends on your total revenues. For example, a 1% profit margin for a penny candy store is pocket change, yet 1% of large revenues collected by airlines is a fair chunk of money. In other words, 1% of $100 revenue is $1. 1% of $1 billion is $1 million. For many airlines, this is enough to sustain itself.

In Canada, the problem is that companies like WJ, JetsGo, CanJet have found ways to reduce their costs drastically to attract customers. AC has had no choice except loose money on selling tickets trying to keep up with these companies. When a serious price competetion comes around, WJ will probably lower their prices to the extent that they would loose money too, except they have the assets and the credit to get away with it. AC on the otherhand, currently in bankruptcy protection, cannot do this. With growing players like WJ and JetsGo, AC is doomes. It's only a matter of time. AC cannot survive on a negative profit margin.

I am in the belief that Canada's aviation industry is in need of a major overhaul. Meaning AC the leading problem in the industry, since it is incapable of managing its money properly, and incapable of expanding or growing, or even maintaining itself at a stable level, must go. Look at how many times they've changed their plans over the last year with Jazz, Tango, Zip, et al., just shows the acts of a desperately falling company. I'm sorry for all the pilots and others that will go down with the ship, but I'm confident they'll find a place in any new or expanding company that will take over.

[Rebel]

Right Seat Captain

I don’t think that you will find many economists or for that matter shareholders that would agree with your take on a 1% profit margin for the airline industry. The infrastructure costs are just too high. For example a new A340 costs approximately $135US with a flyaway package. I would think that the lesser would expect a return of approximately 20% on their investment. That works out to a pretty steep monthly lease package for the lessee. This amount has to be paid regardless of the yield of the airline. The same is true for just about every other aspect of the infrastructure cost except labor.

So labor is the variable, therefore working conditions and remuneration go down.

The industry is now operating in an environment that it has never experienced before. An abundance of good used aircraft available on dirt-cheap leases. This situation will not continue forever so a reckoning time is fast approaching.

In my opinion only..

[N2]

Yep I do have a problem and it's called Rebel at the moment! Why don't you do the honourable thing and retract your comments on me personally? Takes a bigger man to admit he stepped out of bounds and apologize. Not once did I make any mention of you directly yet you feel the need to spout off on a personal level about me. If I did mention you directly then I would say your comments to me would be fair but since none were made I would have to say that, you my friend have the problem.

Mr. Rebel I am even keeled and man enough to apologize for my out burst of temper directed at you should you decide to apologize for your personal attack against me. If you did so nothing further would be mentioned of it and I would forget the remarks you have made. I have no problem with you pointing something out to me or correcting me should I be in error, in fact I welcome it. However personal attacks are not the way to invoke an intelligent conversation would you not agree? Should you see fit not to do so then I will not extend my apology either and let things stand as they are.

There now I have extended the olive branch first. Should you decide to act in a professional manner and retract the personal statements great, if not then so be it.

[Big Pistons Forever]

At the end of the day an airline provides a service to its customers. If there is a wide spread feeling in the customer base that they are being poorly treated then they will take their business to the competition. As a regular airline passenger ( Once a month on average during the winter months ) my feeling is that there is a growing unhappiness with Air Canada's service. Whether or not this is fair ,or even true, doesn't matter because the perception will become fact in the minds of the travelling public. This has very troubling implications for the future and frankly I see a lot of Air Canada employees in denial. I very much hope for the sake of a lot of great people who work at Air Canada , that the airline can turn it self around but from my single POV, it doesn't look good.

[...]

This is thrilling...

[JayVee]

I'm not handy enough to do a quote, but Right Seat Skipper said 1% of a billion is a million...

Dude, it's ONE HUNDRED TRILLION DOLLARS!...er I mean $10 Mil

[Right Seat Captain]

You're right...sorry, my bad. I must not have beenn thinking!

[2low]

Air Canada Wins Toronto Gate Dispute With WestJet (Update1)
Feb. 23 (Bloomberg) -- Air Canada won rights to the most desirable gates at a new Toronto airport terminal, shutting out WestJet Airlines Ltd., after an Ontario judge ordered the airport authority to live up to its contracts.

The Greater Toronto Airports Authority must give Air Canada, which has been in bankruptcy protection since April 1, preferential use of 14 gates linked to the terminal via a bridge, Ontario Superior Court Justice James Farley said in a ruling e- mailed to Bloomberg by Air Canada.

``I regret to say, that I think it's a fair observation here, that trust and respect does not flow in either direction between (Air Canada) and the Authority,'' Farley said in a 29- page, hand-written ruling.

The airport authority agreed last month to give WestJet access to six of the gates at the new terminal after concluding that Air Canada wouldn't have enough flights to gain exclusive use of all 14 gates.

Air Canada changed its schedule and boosted the number of flights after it learned WestJet planned to move to the site.

Burn

[RatherBeFlyingInCanada]

Take it easy N2.........it's just the internet.

[thatdaveguy]

this post is older than i am

[C-FCFL]

Speaking of the gating issue.

The Article in the Star yesterday didn't mention Westjet moving to Terminal 1's new pier after Terminal 2 is demolished.

Are they going back to Terminal 3?

[ACAV8R]

They've been back at 3 for at least a year.

[the_professor]

Air Canada changed its schedule and boosted the number of flights after it learned WestJet planned to move to the site.

If they didn't have the flights scheduled there to begin with, presumably it was because there was no demand for the flights? Now they're adding flights simply to fill the gates, probably running way under on some routes.

Isn't that what got AC into bankrupcy in the first place? Filling gates for the sake of doing so is like the the clutch & grab plays of the NHL in days past -- dirty moves to make up for an inability to compete. Sad.

[the_professor]

Some of you complainers, perhaps you should try Ryanair..All their new aircraft are coming minus the window shades and no reclining seats.

That's f'ing stupid. I'd never fly them.