Originally Posted by
Eagle2000
Makes me wonder if AC was willing to have some accounting trickery by deferring revenue and profit to show the unions, "look our profits are not so good" and sacrifice the share price in the short term.
Before you say how can they defer revenue and profit, easily done. Microsoft has been doing this for decades to make their revenue stream/profits look "smooth". All legit also!
Deferring revenue in the airline business is not easily done. Some companies have long-term contracts spanning several years with numerous components, varied timing of payments, bonuses, penalties, etc, and can be negotiated or renegotiated to achieve certain accounting treatment. Airline tickets are sold less than a year out, and on average something like 60 days out. Revenue gets recognized when the flight is taken. There's not much you can manipulate there. Even big companies tend to pay AC separately for each flight with some kind of rebate at year-end based on volume. You can't say AC can do it because Microsoft can when they're entirely different businesses.
Originally Posted by
robsaw
It isn't accounting "trickery" it has to be a legitimate accounting recognition of the revenue, and AC would already be doing this to spread profits more evenly to reduce income tax payable not as a union negotiating ploy.
Accounting profits and taxable profits are often different. It's not impossible that AC would seek to manage earnings, but as noted previously, there's very little they can do on the revenue side. Any material earnings management would have to be done on the expense side, e.g. when AC wrote off all the 319s in 2020, even though they had no concrete plan to retire them and are still operating a couple dozen 4 years later. Unfortunately for AC, things like that have to be disclosed. Changing depreciation schedules would also likely need to be disclosed.
I'm not saying there's
nothing they could do, but there's not a ton they could do.
Originally Posted by
fly_yag
To avoid any kind of work slowdown / work-to-rule I fully expect AC to announce a lockout rather than have the uncertainty of having crews/planes stranded all over the world. This is exactly what WestJet management did with Encore earlier this year and although it may make the public perception be that AC Management is not willing to negotiate in reality it should significantly minimize the impacts to the overall travelling public.
There's no need for a lockout for that. WS has been through near-lockouts and near-strikes several times this year, and regardless of whether it was a strike or lockout, they were proactively cancelling flights several days out to minimize disruption. Except for the last mechanics' strike when they got caught with their pants down, thinking the mechanics weren't allowed to go on strike. But I doubt AC would be so disorganized.