WJ vs. AC......performance

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yycflyguy
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Re: WJ vs. AC......performance

Post by yycflyguy »

redbaron wrote:
The Raven wrote: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.
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redbaron
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Re: WJ vs. AC......performance

Post by redbaron »

yycflyguy wrote:
redbaron wrote:
The Raven wrote: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.
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yycflyguy
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Re: WJ vs. AC......performance

Post by 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?
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bandaid
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Re: WJ vs. AC......performance

Post by bandaid »

yycflyguy wrote: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.
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Old fella
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Re: WJ vs. AC......performance

Post by Old fella »

yycflyguy wrote: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..........
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leftoftrack
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Re: WJ vs. AC......performance

Post by 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
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3down&loct
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Re: WJ vs. AC......performance

Post by 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.
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biatch
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Re: WJ vs. AC......performance

Post by 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.
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yycflyguy
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Re: WJ vs. AC......performance

Post by yycflyguy »

biatch wrote: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.
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biatch
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Re: WJ vs. AC......performance

Post by biatch »

Pretty sure politicians factor job losses in there along with the votes. 100000 + people lining up for EI is money and votes.
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brooks
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Re: WJ vs. AC......performance

Post by brooks »

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

Both seem set to move up this summer. Thoughts?
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brooks
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Re: WJ vs. AC......performance

Post by 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?
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TheStig
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Re: WJ vs. AC......performance

Post by 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.
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sstaurus
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Re: WJ vs. AC......performance

Post by 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... :?:
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Re: WJ vs. AC......performance

Post by fruitloops »

sstaurus wrote: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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jetsetfly
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Re: WJ vs. AC......performance

Post by jetsetfly »

Network Planning at Westjet better start pulling up their socks, AC is way ahead of the game now just recently announcing YVR-DEL(good move).Also getting more widebodies for Westjet as it's really missing alot of revenue on this new routes AC has announced.YYZ-DEL-YYZ & YYZ-DXB-YYZ Capacity is good i hear.
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Re: WJ vs. AC......performance

Post by Realitychex »

jetsetfly wrote:Network Planning at Westjet better start pulling up their socks, AC is way ahead of the game now just recently announcing YVR-DEL(good move).Also getting more widebodies for Westjet as it's really missing alot of revenue on this new routes AC has announced.YYZ-DEL-YYZ & YYZ-DXB-YYZ Capacity is good i hear.
Let's not throw stones in glass houses.....

First Quarter 2016 Operating Margin as defined by: (Revenue - (Operating expenses + Interest expense)) / Revenue

For example: R = $100
OE = $80
I = $10
Operating Margin = 10%

Allegiant: 32.7%
Alaska: 20.6%
jetBlue: 19.8%
Southwest: 18.9%
Spirit: 18.2%
Delta: 15.5%
Hawaiian: 14.7%
American: 11.6%
Virgin America: 7.7%
United: 6.0%
Skywest: 5.8%
Air Canada: 1.6%

And all that accomplished with fuel having dropped from 95 cents a liter to 48 cents a liter, a not insignificant cost savings given the company burned through 1,062,000,000 liters of fuel last quarter.

:shock:
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TheStig
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Re: WJ vs. AC......performance

Post by TheStig »

Well I sure wish I worked at Allegiant…

Obviously, those are all American carriers. They don't have the same exposure to our economy and currency. I Westjetters are taught that Air Canada is the enemy, and would be doomed to fail without government support. However, the feeling isn't mutual, most at AC don't give much of a second thought to WJ anymore. We're just happy to see our company turning things around financially year-over-year and expanding globally.

Will be interesting to see WJ's Q1 figures next week. Team teal certainly lives in more of a plexiglass constructed glass house than AC, but looking at AC's domestic RASM drop must be some cause for concern given Westjets exposure to the Alberta market. It doesn't appear that either carrier is in trouble, but rumours of weak European summer demand are starting to surface. That should keep things interesting.
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Re: WJ vs. AC......performance

Post by altiplano »

AC may be at the bottom of your list, but the ship is coming about, beat analyst predictions turning a profit and I'm guessing year over year it is the biggest improvement relative it's peers.

The change isn't immediate but it's getting there.
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brooks
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Re: WJ vs. AC......performance

Post by brooks »

At March 31, 2016, total long-term debt and finance leases (including current portion) of $6.448 billion increased $54 million from December 31, 2015.
In the first quarter of 2016, new borrowings of $616 million were largely offset by debt repayments of $224 million and the favourable impact of a stronger Canadian dollar of $335 million.

AC has 166 aircraft currently operating (not including Jazz, Sky, Georgian etc.)

Profit of 100 million this quarter. Thank god for cheap fuel I guess.

:roll:
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brooks
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Re: WJ vs. AC......performance

Post by brooks »

fruitloops wrote:
sstaurus wrote: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
The attachment Stockchart.JPG is no longer available

Don't they all.
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altiplano
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Re: WJ vs. AC......performance

Post by altiplano »

What exactly are you saying there brooks?

Image

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It's just a day... And nothing wrong with 2% - F-n great - wish we could all do 2% a day every day... I mean since you don't get a pension or anything you must be ecstatic!

But 12% is certainly a statement from the market too... that they like where it's going...

We'll see how WS managed their capacity with the Alberta effect in the first quarter.... Now 3 fleets... With one completely exposed to Europe moving forward... it will be an interesting year ahead.
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brooks
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Re: WJ vs. AC......performance

Post by brooks »

I look forward to seeing WS first quarter results. It has become obvious by reading the financials of both companies that it wouldn't take much to put Big Red in the red. This is just another typical Montreal based company that walks around like they are too big to fail.

WS typically cranks out $100 million bucks in profit with a quarter of the capacity.
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Re: WJ vs. AC......performance

Post by av8ts »

brooks wrote:I look forward to seeing WS first quarter results. It has become obvious by reading the financials of both companies that it wouldn't take much to put Big Red in the red. This is just another typical Montreal based company that walks around like they are too big to fail.

WS typically cranks out $100 million bucks in profit with a quarter of the capacity.
Well if Montreal is at fault maybe AC should be allowed to move their headquarters to Calgary or WJ be forced to move to Montreal to make the playing field level.
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altiplano
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Re: WJ vs. AC......performance

Post by altiplano »

Crap on it all you want brooks. But bottom line it's a profit and year over year significant improvement...

Between the political meddling, ACPPA, forced mergers, etc, etc.... it's a feat they are where they are... and where they are is set to continue this trend. Renewed fleets, labour peace, productivity improvements, cheaper CPA agreements, over-funded pensions, engaged workforce...

We'll see how westjet managed this quarter... I have no doubt there will be a profit, great, but I doubt the overall trend is up.

Even your best pal Ben Cherniavsky has aired concerns about all the capacity... It worked in the past? What could go wrong?

Maybe you guys can bully your way to ensure continued success? Clearly your culture implosion and un-westjetty colleagues who don't cheerlead enough are the problems. As Greg said: "make it uncomfortable for them to stay here. They need to find their happiness elsewhere."
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