AC adventures in the regional market have been nothing short of abysmal from a financial case. The pure regional routes lose buckets of money because they cannot consistently fill the airplane on a daily basis(i.e. the Monday morning flight to Timbuktu is full but the Tuesday to Saturday services are wide open).

The reason AC maintains the regional markets is because they feel that their customer base demands this service. For example in AB AC flies Edmonton to Grande Prairie as these flights are demanded by AB government. So if AC wants to be profitable on YEG-YYZ, they also need to service Grand Prairie flight.

The further complicating problem for AC was that in order to spin out Regional flying they had to offer premium to the TSX market. AC has been trying for years to lower their premiums paid to Chorus/Jazz Aviation and this is why they are keen on moving traffic to Georgian and Sky Regional.

Please go back an reread my original post. I am not saying that everything at AC makes money or the WS is a marginal operation.

However what I am saying is that instances where WS mainline goes up against AC mainline, both companies are making money (albeit WS makes more than AC). Where AC is losing money are markets not currently served by WS. Likewise where WS makes most of their money AC does not have high frequency service. However AC rouge is the game changer for AC, seat density and flight crew wages are much more in line with WS on AC rouge than AC mainline.

The other point to make is there is a big difference between making money (generally considered positive cashflow from operations) and net income (the figure most business media folks have been focusing on). In cashflow terms AC netted over 700 million last year on net income of 10 million. The financial delta is mostly due to differences between US GAAP and IFRS, particularly in pension accounting. If AC reported using US GAAP instead of IFRS, their net income figure would be about 600 million rather than 10 million.

I am not alone in being an accountant desiring to burn their professional designation over recent changes to IFRS. Particularly over changes to pension accounting rules. Took me a lot of time with the AC financials and IFRS/IAS pronouncements determine how AC can claim "best financial year ever" and then post a 10 million dollar net income.

Here is a big hint into the future, watch for AC to post close to 1 billion dollar profit as the pension liability unwinds.

WS core senior management is currently contending with significant union drives at both the Flight Attendant and Pilot groups. Likely one or both will be unionized in the next 18 months. If one group gets unionized, then expect the above wing Passenger Service Agents in Canada to also go unionization. Ramp crews are only WS employees in YYZ, YYC, and Grande Prairie, so I would not expect them to get unionized any time soon. Same goes for maintenance workers (not enough membership to make unionization worthwhile).

With all this talk of unionization, I don't expect WS to fall off a cliff in the next 24 months, but their profitability will slowly and very gradually deteriorate as the union starts to win concessions or WS offers more concessions to PACT in order to keep out unionization drive.

Don't expect WS to ever join Oneworld or another alliance. They have a very low threshold for accepting outbound codeshare and prefer to contract with individual airlines over specific routes.