ACE will show a profit by virtue of having sold off a portion of itself, and by virtue of the strengthening C$ vs US$. On a operating basis, they'll produce pretty much no earnings on revenues of $2.3b. Thats all revenues, Parnel. Passenger, Cargo, Aeroplan, ACTS, the whole enchilada.

They don't own any of the fleet, they've sold off a portion of Aeroplan, they'll sell off a portion of Jazz, (though that doesn't look like it'll happen until the first quarter of 2006) . They can sell off bits of ACTS after that. They can continue to do this until there's nothing left to sell.

After that, the corporation has to rely on air transportation revenues for profitability, which already represent about 84% of ACE's revenue flow. YTD passenger revenues: $6.3b, total revenues: $7.47b.

If air transportation doesn't produce a profit that covers the cost of capital, the business is in trouble, again.

As for WJ, their costs may be up this quarter, their yields may be slightly down, their load factor, assuming 74% for December, (it was 74.7% last December), will be 73.2% with a break-even, including interest expense, around 69%. It was 67.8% in the third quarter.

That should produce an operating profit, excluding interest, (just like the way ACE calculates their operating profit), including the provision for profit share, of about $30m and a margin pretty close to 10%.

Not bad for a one trick pony. Maybe if ACE started cancelling some routes that they were losing their shirts on, they might get the sorts of margins WJ will have.

It'd make them a more viable carrier in the long term. Better the short term pain now than the long term pain later.