TheStig wrote:
No one cares what the New England Patriots did in the playoffs during 2015. It's what they did in the playoffs in 2016 that count.
1.22 Billion in 2015. Sounds like a Super Bowl win to me.
I thought this thread was about Westjets over exposure to the Alberta market, yet somehow the Air Canada derangement syndrome instilled into your brains spun this into being about another airline.
This doesn't sound like a CEO who is worried about what the market thinks about his companies performance.
“To be very blunt, we’re not running this company for the benefit of short-term investors from a day-to-day basis or from a month-to-month basis,” Mr. Rovinescu said.
“We’ll see what the stock price does. If short-term investors don’t like this, I can encourage them to leave. We’re running this company for the benefit of our long-term stakeholders.”
“That means we’re going to be providing information that we consider relevant to how we manage the company, not in terms of what somebody would like to see on a day-to-day basis or a month-to-month basis,” Mr. Rovinescu said.
“If we attract greater long-term investors, that should result in less [share price] volatility, not more volatility, and we’ll have the analysts starting to think about this in the way many pension funds [do].”
You are looking at the number you are being steered to, not the number that matter.
$1.22b is an "adjusted" number. Unless every one in the industry "adjusts" their numbers with identical methodology, it's meaningless.
EBITDAR this and EBITDAR that. They used the term 21 times in their earnings release. Hawaiian used it 5x. No one else in North America used the term once in their earnings release. That's how common a metric it is.
Air Canada's net profit, after paying no income taxes for the second year in a row, was $308m on revenues of $13.89B, an improvement of $203m after an annual fuel saving of $924m. That's a
2.2% profit margin after tax, (and remember, AC didn't pay any income taxes in 2015, or 2014, for that matter...).
AC lost $116m in the most recent quarter, compared to a $100m loss in 4Q 2014 last year, with YoY quarterly fuel expense dropping from 80 cents to about 59 cents a liter.
WJ made $367.5 m in 2015 on revenues of $4.03b, after paying almost $153m in income taxes, a
9.1% after tax margin. That's an improvement of $83.5m after an annual fuel saving of $276m.
WJ made $63.4m after tax in the most recent quarter, compared to $90.7m last year, with YoY quarterly fuel expense dropping from 81 cents to 57 cents a liter.
A profit is a profit is a profit.
No amount of spin turns a net loss into a profit.
And with all the "transformation", why is their system casm so much higher than WJ's? Every time this is pointed out, the apologists respond that, at every level AC competes with WJ, be it 39 miles across the Straits of Georgia or 4,700 miles from YVR to the UK, their unit costs are almost identical.
But when the costs are rolled up, there's a 20% straight line differential in fully allocated costs. Plot those costs on a standard stage length adjusted cost curve and the actual differential starts to get closer to 30%.
So you tell me. Where do the costs go wonky?
It's got to be somewhere. It's not short haul, its not medium haul. It's not on 5,000 mile sectors. It's not Rouge. It's not Chorus. It's not Skyservice.
Something is driving those unit costs up to 16 cents a mile over a 1,495 mile average sector when WJ's are 13 cents on an 877 mile average sector. Why is WJ's BELF a full 10% points lower than AC's, even with RASM that is 13% points lower? If it it's not RASM, it has to be CASM.
So what is it?
No worries though. That route will see upgauging as well. Airframes don't show up at a snap of a finger.
