Most profitable Airline in Canada

[Tango Romeo]

l was reading a post the other day in a WestJet forum and one of the replies to a comment said that WJ was the second most profitable airline in Canada. l really don't know if this is true at all. Can anyone provide feedback to that assumption?

Usually when l'm reading the news l see that WJ and AC both report "Record Loads For The Month of ..." ls this an actual indicator of the companies profitability? l mean if both these airlines are selling tickets for 5.00 a seat then the loads will certainly be higher but not making money.

What about other carriers accross Canada such as First Air, Porter. Canadian North, Sunwing, Skyservice, etc..?

Tango-

[_dwj_]

Just go to finance.google.ca and you can get all the information. Just to compare: Westjet had a net income of $178m in 2008 compared to a loss of a billion dollars by AC, whereas AC had a gross profit of $5.7B compared to $597m by WJ. So AC is more "profitable" if you just look at gross profit, yet they lost a huge bundle of money.

As for the other airlines, I don't think they are listed on the TSX so it is hard to get accurate info. But doing a google search for "skyservice revenue" turns up "Skyservice has revenue estimated at $500-million a year" in 2007, which is less than Westjet's gross profit.

[20DMEYYZ]

wouldn't one of those "native" or "tribe" owned operators have the most % profit of all , that would be my guess .

[Charles the Equestrian]

I think Canadian North has to be up there.

They seem to have landed a contract to provide warm air to all of the Northern Communities. When they land and open the doors all I usually see get out is a blast of warm air. And what community doesn't want warm air? They'll make millions, I tells ya, MILLIONS.

[oates76]

TR, if we read the same post, it was quoted as second most profitable in North America, not Canada. Not sure who #1 in NA is though? Southwest?

[W5]

Allegiant.

[MUSKEG]

AC is bleeding 10 million dollars a day right now. Those who seem to be in the know (from past experience) say july or august and then thats all folks. We will see.

[tonysoprano]

2003 was also "that's all folks". Everyday is "that's all folks " from the rejects. So let's wait and see and wait and see and wait and wait and wait....When will you guys ever learn? Gotta love it. The company that was so supposed to be long long gone is still a thorn in so many asses. I want it's survival just based on that factor alone. But please don't stop . This is just too much fun.

[MUSKEG]

Don't think AC will get much in the way of sympathy from the public or the government this time around. Don't bite the hand that feeds you is a lesson often not learned.

[tonysoprano]

"Don't bite what hand?" WTF? Sympathy is not required. Necessity is the name of the game. The crisis (and yes, it is coming) will rehash historical terms such as "deregulation", "crown corp", "essential service", "jobs", "the Air Canada Act" and many more. Tell me, with your best guess, who will take over? Will it be WJ? Sunwing? Air Transat? Skyservice? British Airways, American? Oh ya no problem. I don't know how long you guys have been in this business but in the very near future you will learn something that has been a part of Canadian aviation for a long time. Pay close attention and then get back to us with what you have learned. Oh I know you won't like it. Life isn't fair when you don't agree with something. No, not arrogant. Just been there done that, here we go again, nothing's changed. AC has been the feeding ground for vultures and punching bag for many for a long time. Not many would be able to take it.

[MUSKEG]

First of all I was only passing on info from what I consider a reliable source. Secondly I said "we will wait and see". And in case you don't know the hand that feeds you is the public which right now I think could care less if AC went under. As for who takes over I don't know and I don't care. The industry is as screwed up as the auto industry and most think we should let them fall. Why not the sacred cow?

[tonysoprano]

That's your opinion. I don't think you speak for the 70,000 passengers we serve everyday.

[yfly]

Tony, by trying to be fair in your your first post on this, you derailed your argument.

If I had been asked 10 years ago what I thought of Air Canada, I would have spewed the "crown corporation, tax payers money, blah blah". Back then, Westjet was 2 bit player operating against a very large monopoly. The Air Canada Act as you know would somewhat enable the success of the Westjets and financially penalize AC.

Things however, do need to change and change now. Westjet can stand on their own. There is no need for an "Air Canada Act". AC needs to be freed of the chains that prevent it from competing in an open market. I personally think there will be another bankruptcy protection spell. It will no doubt cost employees again but out of that will rise two very strong airlines and our traditional Canadian duopoly will be back and healthy. So says my crystal ball. Personally, I hope AC does well. Once freed of the greed oriented management and debt/expense and revenues fall in line, the people will once again love (east) and love to hate (west) a great airline.

[...]

There are very different 'niches' of companies that do very well in their specific market of choice.

If you look @ the structure of Groupe Transat...you'd be surprised at what you'll find.

In my humble opinion...Groupe Transat has been doing it right for years. They seem to always be overlooked by many here.

[MUSKEG]

tonys. Please read for crying out loud. No where did I say that what I said was my opinion. I clearly stated that I was only passing on info I had heard. Secondly, please take an educated guess as to the number of pax you haul daily who are there because they have to be not because they want to be. That is something alltogether different.

[...]

Hey "tonysoprano", although I truly love reading your high level of enthusiastic counter-postings about your place of employment...blow it out your ass...it's just as effective.

Much Love

The Dawg

[tonysoprano]

yfly.
The Air Canada Act is actually a very small part of AC's problem. AC's management and the model itself are the problem. However every major economy on earth has a hub and spoke carrier very similar to AC. We can sit here and argue whether or not they make money consistently or whether or not they are popular. One thing is for sure, they are needed and having many airlines with "niches" does not solve a county's transportation needs. I predict that by the end of the year some of the so called backups or "niches" will be gone. And thus the question of AC's survival becomes one of essential or non essential. But that might have to be be up to government and Canadians to decide. Let's hope not. I'll put my money on an in house recovery plan which may or may not include another round of CCAA with a huge possibility of an acquisition from another carrier.

Musk.

Secondly, please take an educated guess as to the number of pax you haul daily who are there because they have to be not because they want to be. That is something alltogether different.

Doesn't make any difference whether they like it or not. They still need it. And trust me, despite what you may have grown up thinking, it's a very popular service. I get to hear it all the time first hand.


Deleted.

[tonysoprano]

...

[yfly]

There are very different 'niches' of companies that do very well in their specific market of choice.

If you look @ the structure of Groupe Transat...you'd be surprised at what you'll find.

In my humble opinion...Groupe Transat has been doing it right for years. They seem to always be overlooked by many here.

I agree, but when I need to fly Halifax to Victoria, Toronto to Regina etc, Air Canada is the niche player. Transat may be a great Tour type carrier but as Tony suggested, the entire group of niche operators don't meet the needs of the travelling public in Canada. From a business travel perspective, AC wins hands down and those Aeroplan points prevent me from having to fly the tour operators.

I don't overlook them, I just have no need to use them.

Lets hope everyone prospers rather than wishing ill on each other. A strong industry is great for all of us system managers.

[yfly]

The Air Canada Act is actually a very small part of AC's problem. AC's management and the model itself are the problem.

I agree with your comments but I am still convinced the model would work provided the playing field is level and the management issues are addressed.

Having a viable AC is in the best interest of this country and the travelling public, at any cost.

[MUSKEG]

tony. Your comment that "It doesn't matter whether they like it or not" is exactly the attitude that got you into the problems you have now. I hear it every day.

[whiteguy]

tony. Your comment that "It doesn't matter whether they like it or not" is exactly the attitude that got you into the problems you have now. I hear it every day.

Not unlike the WS flight attendant saying "if you don't like our service, lower your standards" YVR-HNL April 16th, 2008.

[jetflightinstructor]

Out of curiousity, I have googled the most profitable airline in the world, it is Air France KLM... Interesting.

Air France-KLM (Euronext: AF, AFA) is an European airline holding company incorporated under French law with its headquarters at Roissy-Charles de Gaulle Airport near Paris, France.

It is the largest airline company in the world in terms of total operating revenues, and the third largest in the world in terms of passenger-kilometres and passenger fleet size.

['effin hippie]

No sensible person wants to see AC fail. But in NO way does it qualify as an essential service.

Some questions:

With ACE selling off everything, what about the other divisions?

Aeroplan, could they sign a deal with anyone now? Even Westjet? AC mainline's survival/demise would clearly impact Aeroplan's revenue, but it needn't be fatal. I assume Aeroplan is taking steps to broaden its revenue stream.

Jazz? Again, a huge chunk of their revenue depends on mainline, but could they not in theory survive its departure from the market?

While I agree that AC's collapse would be severely disruptive, I've gotta dispute the notion that it would be so bad as to be unthinkable.
Say they stop flying.
Sure, there will be some f***ed travelers. Westjet will be booked solid - how many machines could they charter/ lease from whom-the-@#$!-ever to add capacity? Jazz loses their guaranteed income, but short term who cares because there is way more demand than supply so their position doesn't change much, and why can't they add capacity through charter/lease. From where I'm sitting the domestic picture seems like it gets difficult but not impossible to travel for maybe 5-6 months tops. I bet a lot less.
International then - do AC's star alliance partners have obligations to make up missing capacity on shared routes? If you bought a ticket on AC for travel after the date they stop service, that sees disruption, for sure. Beyond that, travellers have to make do with foreign carriers until new international services start up. Maybe the international side gets hit harder.

What am I missing? Probably lots, and I have made some big assumptions regarding Jazz and Aeroplan. But I do know that there is never a shortage of people willing to try and make a buck. Businesses spring up like mushrooms. And some of them are run by people smart enough and tough enough to survive rapid growth.

Bottom line. I really hope AC comes through OK. I agree with tonys when he says restructuring with some foreign involvement seems likely. But I see little reason to agree that the failure of Air Canada would be so disruptive as to require the label of 'essential'. No one will die. No one will go without heat, or water or food. Travel will still be mostly possible. Recovering frequency of service might take a few months. Every couple years the east gets hit with ice storms that cause way more disruption.

ef

[tonysoprano]

Musk.
You don't understand what I'm trying to say. Let me be more clear. No AC employee intends to provide bad service. AC itself does not intentionally provide bad service. We are not that naive. But shit happens when you're a big company providing the kind of service it does. What I am saying is, agree or disagree, like it or not, the motive for having AC since the early days is still the motive to keep it around today. Canada being a gigantic country, with small towns to big towns and a need for overseas service, you need a STRUCTURED, HUB and SPOKE system. Not a niche, point to point Walmart service. That does not meet the needs of this country. It might work else where but not here. Like it or not, AC or someone like AC is needed.

hippie.
I don't know but WJ certainly has no plans to change its model into the one I described above. They are a "niche" company using a model which is very successful but can never meet the needs of country like ours 100%.