Originally Posted by LeSabre74
I must admit I'm a bit puzzled by the whole sell-off plan. When CP did it in the name of unlocking shareholder value it made sense, as they had become a conglomerate of unrelated businesses. However, all the AC spin-offs are tightly related to the core business: maintenance, FF program etc. If AP is a moneyspinner, why divorce it from the mainline carrier which is notoriously cyclical in nature? Why would you want to hold shares in just the mainline carrier?
I was wondering about the same thing. The steady cash flow from the subsidiaries is an insurance against the ebbs and flows of the airline business.
There are some here on this board that would postulate that Aeroplan has moved away from the core business with the loyalty program emphasis and it deserves to be sold.
I recently had breakfast with an acquaintance in the brokerage world. He related a conversation with a manager of a huge mutual fund who was convinced that Aeroplan would be spin off into a income trust fund. He claimed that Aeroplan perfectly fit the income trust model à la Yellow Pages Income Trust; steady cash flow with potential for increase in distributions to trustholders.