WJ vs. AC......performance

[altiplano]

As a moderator in a Canadian aviation forum I would have thought you better informed on the subject, Bandaid, and maybe more 'moderate' when interjecting in a topic... Anyway keep up the good work...

[redbaron]

Those were loans, all paid back with interest.

In fairness, Bandaid is at least partially right. Loans from a government given at either below market rate or when traditional lenders are unwilling still obviously benefit the recipient. Taxpayer money is either at higher than normal risk or not earning the interest it could otherwise. The government in this case believed it was for the greater good which probably was true.

[bandaid]

Funny, as a moderator I have seen comments on here bemoaning my lack of knowledge in aviation and that I add very little to the discussions. Now I make an observation which, by the way, I knew was semi correct to a person whose intent is was to try and start a pissing match between WJ and AC pilots.
I realise that it was a loan and I appreciate the fact that it was in the best interest of aviation in Canada. I also appreciate the fact that the two companies are very different in the way business is conducted. I guess the better way of putting it is only one company has had to ask for financial help and got it at the expense of taxpayers at a lower interest than Johnny Q public could expect from their bankers.
It is in pilots best interests that all companies in Canada do well, the job market isn't that great right now.
I guess because I am not a pilot I should not be allowed to comment on any topic in here. Thanks Altiplano for pointing that out. Keep up those keen observations.

[dukepoint]

I wouldn't poke you guys if I knew you couldn't take it. I mean Westjet is truly a success story, and I'm not being sarcastic. Just trying to ignite a little fire in Dullsville....... Air Canada needs a healthy competitor.

I'd call this thread a success if you can include a moderator "rolling around in the mud" with us.

DP.

[URC]

I bought that stock on big promises Clive made more than a decade ago at a shareholder meeting just before AC went into CCAA........I'm dissappointed so far.

Since 2001 ...

WestJet has increased ASM's by 854%
Had a net income of $1.73 Billion

WTF were you expecting ?

Did you buy Air Canada stock when it IPO's at $20.00 ? How's that been working for you ?

[yycflyguy]

Those were loans, all paid back with interest.

In fairness, Bandaid is at least partially right. Loans from a government given at either below market rate or when traditional lenders are unwilling still obviously benefit the recipient. Taxpayer money is either at higher than normal risk or not earning the interest it could otherwise. The government in this case believed it was for the greater good which probably was true.

The loans were at exorbitantly high interest rates, and it wasn't just the Feds. Around 20% if I remember correctly. They were paid back in full with interest so the taxpayer money rate of return was far superior than what an investment could have provided.

[redbaron]

Those were loans, all paid back with interest.

In fairness, Bandaid is at least partially right. Loans from a government given at either below market rate or when traditional lenders are unwilling still obviously benefit the recipient. Taxpayer money is either at higher than normal risk or not earning the interest it could otherwise. The government in this case believed it was for the greater good which probably was true.

The loans were at exorbitantly high interest rates, and it wasn't just the Feds. Around 20% if I remember correctly. They were paid back in full with interest so the taxpayer money rate of return was far superior than what an investment could have provided.

I'm not saying it didn't turn out well, but there has to be a reason the Feds had to provide at least some of the loans, and it's not because governments normally make higher risk loans as their typical investment strategy.

[yycflyguy]

Airlines, and Air Canada in particular, shell out billions of dollars in taxation to the Feds. The real question is could the Federal government cope without the cash cow?

[bandaid]

Airlines, and Air Canada in particular, shell out billions of dollars in taxation to the Feds. The real question is could the Federal government cope without the cash cow?

You're absolutely right. They took a very high risk with our money and took quite a bit of flack for it at the time if I remember right. They did similar loans for GM and though I don't think Air Canada is going anywhere soon, GM is moving a lot of their plants to Mexico.

[Old fella]

Airlines, and Air Canada in particular, shell out billions of dollars in taxation to the Feds. The real question is could the Federal government cope without the cash cow?

The loan given AC, putting it prospective could be seen as "chicken feed" compared to the Canadian GDP and furthermore no government(of whatever political stripe) was gonna let a major operation such as AC sink as it would be to damaging to the country as a whole. Then again as many smarter than me pointed out, tis a moot point as AC paid back every dime + interest to it's creditor the Canadian taxpayer As a result, it appears the airline is doing well for itself and is setup to continue this trend..........

[leftoftrack]

well played dukepoint ya got a few of them to argue. I'd give you the bronzed fish hook if there were such a reward

[3down&loct]

Don't get to excited about the stock price. Airlines tend to follow an 8 year cycle. I think we are nearing the 8 year peak and would be cautious moving forward. Perhaps the good times are over.

[biatch]

I recall the loan being at 12.5 % which was very high at the time, even for commercial loans.

It's been said if AC went under more than 100000 direct and indirect jobs would be lost, many of them paying above Canadian avg salary. The loan was a no-brainer.

[yycflyguy]

I recall the loan being at 12.5 % which was very high at the time, even for commercial loans.

It's been said if AC went under more than 100000 direct and indirect jobs would be lost, many of them paying above Canadian avg salary. The loan was a no-brainer.

You have to think more like a politician. If AC went under, it was 27,000 employee votes, plus another ~25,000 pensioner votes, plus those passengers inconvenienced by their demise all blaming the Feds. Money and votes. That's all they care about. Not the survivability of a Canadian airline.

It worked out as the Federal government (taxpayers) made money off the loan and it was repaid in full. Had it not worked out, Canadian passengers would be connecting through Dubai, Abu Dhabi, JFK or IAD to get to LHR/CDG.

[biatch]

Pretty sure politicians factor job losses in there along with the votes. 100000 + people lining up for EI is money and votes.

[brooks]

http://www.bnn.ca/Video/player.aspx?vid=838070

Both seem set to move up this summer. Thoughts?

[brooks]

Comment from Stockhouse.

AC Quarterly Numbers
The consensus is a first quarter LOSS of 18 cents a share and perhaps as much as -47 cents a share? Is this true?

And if so, there are still people who buy into this TRANSFORMATION story? Are you kidding me?

The AVERAGE profit margin for all publicly traded airlines that have reported their first quarter earnings this year is 13.3% with a 70.1% break - even load factor.

If the analysts are correct, AC will report, far and away the worst results of any publicly held major airline in North America, including Mexico! Holy cats! If true, no wonder they are releasing the numbers on "bad news Fridays" and no longer issue monthly traffic data.

What does it say about AC if the analyst community is correct and AC lost somewhere between $600,000 and $1.5m a day in the first quarter of the year, even after all the change that has occurred including the cumulative cost cutting, aircraft densification, cheaper labor contracts, cheaper Regional flying contracts with Chorus and Sky Regional, the highly efficient 787 introduction, the cheapest fuel in a decade and supposed low cost Rouge and this is all there is? More losses? Whaaaat?

Not only that. they are in a massive growth mode at a rate about 5x the domestic GDP rate, with new routes that canibalize established profitable international routes and US airlines are expecting double digit prasm declines in the current quarter mostly due to over capacity?

[TheStig]

Or...

MONTRÉAL, April 29, 2016 – Air Canada today reported first quarter 2016 record EBITDAR(1) (earnings before interest, taxes, depreciation, amortization and aircraft rent) of $460 million compared to EBITDAR of $442 million in the same quarter in 2015. For the 12 months ended March 31, 2016, Air Canada’s EBITDAR margin was 18.3 per cent. Air Canada recorded adjusted net income(1) of $85 million or $0.30 per diluted share compared to adjusted net income of $122 million or $0.41 per diluted share in the first quarter of 2015. On a GAAP basis, in the first quarter of 2016, Air Canada reported operating income of $154 million compared to operating income of $200 million in the first quarter of 2015. The airline reported net income of $101 million or $0.35 per diluted share in the first quarter of 2016 compared to a net loss of $309 million or $1.08 per diluted share in the first quarter of 2015.

[sstaurus]

Maybe someone can explain this 'adjusted net income' to me in layman's terms, is it just putting lipstick on a pig? Or is there another reason, as it looks like WJ doesn't report it this way...

[fruitloops]

Maybe someone can explain this 'adjusted net income' to me in layman's terms, is it just putting lipstick on a pig? Or is there another reason, as it looks like WJ doesn't report it this way...

Don't worry about interpreting any company's results - the best way to gauge the truth behind any news release is the market reaction +12% today

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