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Air Canada warns of quarterly loss in preliminary results

Air Canada warns of quarterly loss in preliminary results

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Old Apr 22, 13, 7:33 am
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Air Canada warns of quarterly loss in preliminary results

http://www.theglobeandmail.com/repor...ticle11449914/

Air Canada estimates it will book a bigger operating loss in the first quarter as it releases preliminary results with a view to exploring debt-financing options.

Canada’s largest air carrier said on Monday it expects an operating loss of $106-million compared with an operating loss of $91-million in the first quarter of 2012.
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Old Apr 22, 13, 8:01 am
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What is this paragraph about?

In addition, Air Canada expects to record an impairment charge of $24 million related to Airbus A340-300 aircraft (none of which are operated by Air Canada) which is reflected in Air Canada's preliminary operating loss and net loss results.
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Old Apr 22, 13, 8:07 am
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Also cited among many reasons (excuses?) for the loss was "a higher proportion of leisure passengers versus business passengers". Maybe the move to other carriers is real.
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Old Apr 22, 13, 8:20 am
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Originally Posted by fin 645 View Post
Also cited among many reasons (excuses?) for the loss was "a higher proportion of leisure passengers versus business passengers". Maybe the move to other carriers is real.
I read that item and had to laugh. Every business traveler I know is flying UA and other carriers more often now because of the Tango / Flex fare disparity. Booking AC used to be pretty automatic for all of us, but now we always shop around.

AC, it's simple. Charge a little more for Flex fare benefits if you want (e.g. full status miles, upgradeability). Charge us (a few) more upgrade credits if you want. But $800 extra one-way TPAC? Bye, we're flying United.
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Old Apr 22, 13, 8:26 am
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Originally Posted by tracon View Post
What is this paragraph about?

In addition, Air Canada expects to record an impairment charge of $24 million related to Airbus A340-300 aircraft (none of which are operated by Air Canada) which is reflected in Air Canada's preliminary operating loss and net loss results.
Per this page the original fleet of AC 343 have all been released to other airlines. I'm not sure about this, but it's possible that AC never actually sold the aircraft but rather leased them out. So (pure speculation here) it's possible that some of the leasors have not paid the final $24 mil of lease payments to AC or that the lease was structured in such a way that if conditions A & B happened then lease payments of $24 mil would not be due. In either case, AC would have to write off $24 mil of expected revenue.
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Old Apr 22, 13, 8:37 am
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Originally Posted by sweden05 View Post
AC, it's simple. Charge a little more for Flex fare benefits if you want (e.g. full status miles, upgradeability). Charge us (a few) more upgrade credits if you want. But $800 extra one-way TPAC? Bye, we're flying United.
Very true! So many companies now have "lowest logical airfare" as their guiding principle. It's shockingly easy to eliminate Flex as a consideration. Once that's done, other airlines become a reasonable, logical alternative.

At my company, 10 years ago we flew 100% AC / *A. This November though I saw tickets being booked on Emirates in J. Even just 2 - 3 years ago this wouldn't have happened; now it looks like it'll be the new norm. Interestingly as our corporate executive flyers are migrating away from AC, so too are the peons who now fly PD, WS and even DL.
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Old Apr 22, 13, 8:37 am
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Originally Posted by sweden05 View Post
I read that item and had to laugh. Every business traveler I know is flying UA and other carriers more often now because of the Tango / Flex fare disparity. Booking AC used to be pretty automatic for all of us, but now we always shop around.

AC, it's simple. Charge a little more for Flex fare benefits if you want (e.g. full status miles, upgradeability). Charge us (a few) more upgrade credits if you want. But $800 extra one-way TPAC? Bye, we're flying United.
I just booked a leisure TATL trip in business class this summer with another airline and the fare was $700/person cheaper than AC.

A month ago, I flew TPAC on CX Premium Economy for $200 cheaper than AC Flex.

Last edited by Clipper801; Apr 22, 13 at 8:46 am
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Old Apr 22, 13, 8:46 am
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Money speaks, and maybe it's time to undo those "enhancements" so people actually want to fly AC

Or it could simply be an influx of Aeroplan redemptions due to them expiring soon in 2013/2014
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Old Apr 22, 13, 8:49 am
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Originally Posted by RCyyz View Post
Per this page the original fleet of AC 343 have all been released to other airlines. I'm not sure about this, but it's possible that AC never actually sold the aircraft but rather leased them out. So (pure speculation here) it's possible that some of the leasors have not paid the final $24 mil of lease payments to AC or that the lease was structured in such a way that if conditions A & B happened then lease payments of $24 mil would not be due. In either case, AC would have to write off $24 mil of expected revenue.
I bet they were at the end of their lease to the other operator and being returned and AC dumped them. 340's have terrible resale value from what I've read.
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Old Apr 22, 13, 8:50 am
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Originally Posted by jerryhung View Post
Money speaks, and maybe it's time to undo those "enhancements" so people actually want to fly AC

Or it could simply be an influx of Aeroplan redemptions due to them expiring soon in 2013/2014
Honestly, cancelling of the light meal service on short haul Executive class is the most ridiculous "enhancements" lately.
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Old Apr 22, 13, 8:50 am
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Flew CX over AC recently (which is a very big move for me) and was blown away how much better the overall J experience was on CX.

AC is killing itself by a thousand cuts.
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Old Apr 22, 13, 9:01 am
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Originally Posted by Dorian View Post
Flew CX over AC recently (which is a very big move for me) and was blown away how much better the overall J experience was on CX.

AC is killing itself by a thousand cuts.
CX's Premium Economy is also not bad as an enriched economy product.
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Old Apr 22, 13, 9:21 am
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Originally Posted by sweden05 View Post
I read that item and had to laugh. Every business traveler I know is flying UA and other carriers more often now because of the Tango / Flex fare disparity. Booking AC used to be pretty automatic for all of us, but now we always shop around.

AC, it's simple. Charge a little more for Flex fare benefits if you want (e.g. full status miles, upgradeability). Charge us (a few) more upgrade credits if you want. But $800 extra one-way TPAC? Bye, we're flying United.

Totally agree.. Booking my BKK/KUL/NRT trip right now via UA.. Bye bye AC!
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Old Apr 22, 13, 9:21 am
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Originally Posted by sweden05 View Post
I read that item and had to laugh. Every business traveler I know is flying UA and other carriers more often now because of the Tango / Flex fare disparity. Booking AC used to be pretty automatic for all of us, but now we always shop around.

AC, it's simple. Charge a little more for Flex fare benefits if you want (e.g. full status miles, upgradeability). Charge us (a few) more upgrade credits if you want. But $800 extra one-way TPAC? Bye, we're flying United.
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Old Apr 22, 13, 9:29 am
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Surely revenue from rouge and the new 777s on the CDG route will correct all financial ills. LOL

This has a whiff of J.C. Penney on it. It'll be hard to get those lost customers back.
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