Go Back  FlyerTalk Forums > Miles&Points > Airlines and Mileage Programs > Air Canada | Aeroplan
Reload this Page >

Air Canada seeks ways to boost revenue, cut costs as C$ falls

Air Canada seeks ways to boost revenue, cut costs as C$ falls

Old Feb 4, 14, 6:59 pm
  #1  
Original Poster
 
Join Date: Dec 2002
Posts: 6,238
Air Canada seeks ways to boost revenue, cut costs as C$ falls

http://finance.yahoo.com/news/air-ca...205731939.html


Air Canada, the country's largest carrier, is looking for ways to bolster revenue and cut costs to compensate for the weakening Canadian dollar, its chief executive officer said on Tuesday.

Air Canada had forecast the Canadian dollar would weaken and had been searching for ways blunt the impact, but the currency has fallen more than it had expected, CEO Calin Rovinescu said in a speech in Toronto.

"We got a head start looking at ways to mitigate the exposure such as additional cost reductions or revenue enhancements initiatives," he said, but did not provide any specific details.

Rovinescu said the airline has a currency hedge position that will absorb some of its exposure. He also noted that the price of crude, which often moves in tandem with the Canadian dollar, has also fallen slightly.

Air Canada's stock, which hit its strongest level since March 2008 last month, has tumbled about 25 percent in less than two weeks on concerns the weaker Canadian dollar will drive up its costs.



I will add....get rid of management and reduce out of country heavy maintenance.
tracon is online now  
Old Feb 4, 14, 7:03 pm
  #2  
 
Join Date: Jul 2009
Location: YVR
Programs: TK*G
Posts: 292
Step 1, follow Westjet's lead and raise prices:

http://ca.reuters.com/article/busine...A131G720140204

(I assume this is already happening).
Garbageman is offline  
Old Feb 4, 14, 7:03 pm
  #3  
 
Join Date: Feb 2013
Location: YVR and/et YUL
Programs: AC*A
Posts: 443
"Enhancements you are going to like."
Orcair is offline  
Old Feb 4, 14, 7:27 pm
  #4  
FlyerTalk Evangelist
 
Join Date: Jun 2003
Location: YYC
Posts: 21,589
Microcrap just got themselves a new CEO. Stock went up quite a bit today.

(I know, not going to happen at AC.)
Stranger is offline  
Old Feb 4, 14, 7:36 pm
  #5  
 
Join Date: Feb 2013
Location: Never home.
Posts: 2,962
Originally Posted by tracon View Post
...and reduce out of country heavy maintenance.
I'm confused. Do you really think AC is flying their planes to TLV, SIN, DLH for maintenance just so they can pay more?
winnipegrev is offline  
Old Feb 4, 14, 8:48 pm
  #6  
 
Join Date: Jul 2005
Location: YYZ
Programs: AC*SE,MM
Posts: 362
They need to lower prices internationally if they want to increase revenue.

They are priced as a premium product on dozens of city pairs.
ensco is offline  
Old Feb 4, 14, 9:18 pm
  #7  
 
Join Date: Jun 1999
Location: YVR
Programs: ACSEMM QRGold SPGLifetimePlat FairmontPlat HyattD AMEXCenturion SerenaPlat TalkBoard Founding Member
Posts: 8,936
Bring back the World Pass but at FAR better prices, similar to the Western Canada - Asia Flight Pass in J.

AC could prebook and incredible amount of future revenue.
Dorian is offline  
Old Feb 4, 14, 9:24 pm
  #8  
Suspended
 
Join Date: Jan 2010
Location: Calgary, Alberta
Programs: Hyatt Diamond, Fairmont Platinum, Aeroplan Diamond, HHonors Gold, SPG Gold
Posts: 18,686
Bonds are dropping because US is flirting with default again. We may see a stronger Canadian Dollar in the short term.

Sounds like fuel (scam) surcharges are in the works again, except it'll go higher, as the fees didn't seem to go down after high fuel costs the last time out.
Ancien Maestro is offline  
Old Feb 4, 14, 9:59 pm
  #9  
 
Join Date: Aug 2011
Posts: 2,187
Originally Posted by tracon View Post
Air Canada's stock, which hit its strongest level since March 2008 last month, has tumbled about 25 percent in less than two weeks on concerns the weaker Canadian dollar will drive up its costs.
Gee, that can't be...we've been told numerous times here that it's only a rosy future for AC. Perhaps people are sensing that the recent gains are all predicated on a very weak foundation?
sp4294 is offline  
Old Feb 4, 14, 10:08 pm
  #10  
 
Join Date: Feb 2004
Location: Canada
Posts: 881
Originally Posted by sp4294 View Post
Perhaps people are sensing that the recent gains are all predicated on a very weak foundation?
I think people are sensing that Canadian airlines across the board might be in for a harder time if the CAD$ remains at current levels or goes lower.

Westjet's CEO recently made noises that were similar to Calin's.

Last edited by Spounce; Feb 4, 14 at 10:25 pm
Spounce is offline  
Old Feb 4, 14, 10:20 pm
  #11  
 
Join Date: Apr 2011
Programs: UA 1K, AA PLT, HH Gold, MR Titanium, IHG Spire, Accor Silver, National EE, Hertz PC
Posts: 3,723
Originally Posted by Ancien Maestro View Post
Bonds are dropping because US is flirting with default again. We may see a stronger Canadian Dollar in the short term.
Bond prices are at the highest in months.
Santander is offline  
Old Feb 4, 14, 10:36 pm
  #12  
 
Join Date: May 2012
Location: Goodbye Flyertalk.
Posts: 2,588
Originally Posted by ensco View Post
They need to lower prices internationally if they want to increase revenue.

They are priced as a premium product on dozens of city pairs.
Agreed. I was checking Jprices for upcoming Asian longhauls and the routes to NRT and BKK are up $1000+ compared to a couple months ago. I doubt I'll be an AC pax after my next flight which I booked before the fares jumped.
Transpacificflyer is offline  
Old Feb 4, 14, 10:39 pm
  #13  
 
Join Date: May 2012
Location: Goodbye Flyertalk.
Posts: 2,588
Originally Posted by Spounce View Post
I think people are sensing that Canadian airlines across the board might be in for a harder time if the CAD$ remains at current levels or goes lower.

Westjet's CEO recently made noises that were similar to Calin's.
The difference was he gave a coherent explanation and the increases instituted so far are not significant. West Jet also hadn't imposed the surcharge that the "Vacation" companies imposed.
Transpacificflyer is offline  
Old Feb 4, 14, 10:55 pm
  #14  
 
Join Date: Feb 2004
Location: Canada
Posts: 881
Originally Posted by Transpacificflyer View Post
The difference was he gave a coherent explanation and the increases instituted so far are not significant.
I don't think companies go around changing prices if the price changes aren't of significance to the bottom line or to the consumer, and I'm sure that a well run company like Westjet doesn't pay managers to sit around doing things that make no difference to anything. I'd say that the increases Westjet has applied are of some significance or other, and that they wouldn't otherwise have bothered.

You mention a coherent explanation. Was something that Calin said difficult to understand?
Spounce is offline  
Old Feb 4, 14, 11:40 pm
  #15  
 
Join Date: Aug 2010
Location: YYZ/YUL/YOW
Programs: TK*G/E+ SPG (G)
Posts: 2,907
"Air Canada tried to boost fares on domestic and transborder flights two or three times in the past three weeks, but none of the increases stuck because WestJet Airlines Ltd. kept its fares steady, Air Canada’s chief commercial officer Ben Smith said Tuesday."

http://www.theglobeandmail.com/repor...ticle16680738/

I seem to have missed the part where AC and WS lowered fares when the dollar strengthened.

“Until recently, it’s WestJet that has been holding back,” Mr. Smith said after a speech to the Canadian Club in Toronto by Calin Rovinescu, Air Canada’s CEO. “You had the whole industry raising fares – all U.S. carriers, ourselves – and they don’t stick because we [had] one holdout.”

Dont you just hate it when holdouts get in the way of a bunch of 'competitors' who want to uniformly raise prices together?

Last edited by yulred; Feb 4, 14 at 11:46 pm
yulred is offline  

Thread Tools
Search this Thread