Originally Posted by Coffeebean
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.
Reminds me of the ski resort business.
Make a killing selling off real estate, the lift company operates at a continual loss, the real estate component dries up, lift company in serious trouble.
IIRC, Intrawest ski resort operations have continually lost money at Whistler/Blackcomb. I would be surprised if their are many ski resorts that are profitable from ski resort operations.
Sorry for the OT, but I can't help but see some similarity between the two businesses.