Originally Posted by
Lloydbraun1976
my business is about sweating assets, so, if assets are routinely, not being used as planned by comparison to peers, which is what benchmarking is all about, would be ripe for a hostile takeover and kick-out management .
But if business fundamentals at AC are different, likely due to inability for foreign takeover then shareholders get what they deserve.
Increasing block times leads to a lot of aircraft sitting around airports because they've arrived early, which can lead to sweating assets
less hard. It's a delicate balance.
Originally Posted by
zkzkz
True.... but shareholders also care about *future* profitability. And to make predictions like that it's often useful to look at how competently a company is being run in other ways that might not be affecting the bottom line today because it shows how well they'll be able to handle operations in the future.
So sure if on-time performance has *no* affect on profitability at all then nobody's going to care but that's patently untrue. Delays are expensive when customers need to be reaccomodated, employees get paid overtime, and customers leave for other competitors. It may be true that *today* the cost is outweighed by other income but a company that is able to operate more smoothly today is one that will be more profitable in the long run when the weather isn't so positive.
AC's OTP has ranked poorly for quite a few years - long before COVID. And yet it was one of the world's best-performing airlines,
financially, for quite a few years.
So what has changed in the markets in which AC competes that is going to make OTP a bigger driver of profitability and share performance in the future? I have not seen anyone attempt to make a case, let alone make a compelling one, beyond "I'm tried of AC being late so I'm taking my business elsewhere", something that I think people have been saying since I joined FT in 2015.
Originally Posted by
Lloydbraun1976
Completely agree, and I learned long ago that long term "profitability' runs straight through "promises made, promises delivered".
Inability to consistently deliver on core promises to customers, staff etc, is the very definition of an organization that is poorly managed - to say otherwise only holds true if a business is protected from reality that mgmt / existing shareholders can't be replaced. I don't know that much about investment rules for airlines, but I understand foreign takeover not possible ?
OTP at a higher level than what AC achieves these days seems to be a "core promise"
to you. The behaviour of AC's customers suggests that it's
not a "core promise" to them. Saying that AC is "poorly managed" purely on based on the fact that they're not meeting
your standards on an operational metric is a strange way of looking at a business.
Originally Posted by
RangerNS
FR flies aircraft that carry between 148 and 197 PAX, across 4 configurations but only 2 types, for pilot cert purposes.; AC fleet is 14-20+ styles, depending on how you want to count, maybe 8+ types of pilots, even ignoring the contract fleets and distinct unions that AC is involved with.
FR doesn't have any A220s, and their only 73G is used for crew training and reserve purposes, not regular revenue service.
You did miss the Lauda Air fleet of A320s though.
Other than that, I agree with you that they're a poor comparison.