KenHamer

http://business.financialpost.com/in...da-and-westjet

Hello again

1. CDN markets have pretty much had zero growth this past year.
2. AC has only cut fares a little in this slow season and every flight I am on is full. I will hit 280K miles this year with 245K on very full planes.
3. AC smartly loaded up domestic flights to have more feeds into Rouge and their expanding International mainline with FUEL efficient dream liners.

PLeblond

When they say: "while WTI oil prices have declined more than 30 per cent during the same period", I believe they are quoting prices in USD. Given the CAD decline over the same period, the 'real' fuel costs to Canadian based airlines is considerably higher, especially given that most of their revenue is in CAD.

In addition, they are quoting differences between record traffic/load factors in August to November. Proper comparisons should be made between Nov 2015 v. Nov 2014 and that discrepancy could be compared to Aug 2015 v. Aug 2014 figures. Using this logic, one could say that retail sales in Feb 2016 will be considerably less that Dec 2015. Since a large percentage of retail sales are near Xmas, this argument makes sense.

Lastly, November 2015 had a major incident in Europe that has a correspondingly huge affect or TATL air travel. There was a dramatic drop to flights to Europe in the second half of Nov 2015. I have a few TA friends who have told be that sales of Europe travel packages for 2016 are abysmal, and a few of the tour operators are very, very concerned.

Articles like this make me wonder: 'What's the point' and often times, by only conclusion is: Jonthan Ratner is shoring airlines and wants the world to do the same.

Sean Peever

The way this guy structures his argument he also makes it sound like airlines want to run at 100% capacity - hint: they don't.

PLeblond

Agreed.

I also forgot to add: Airlines historically have have brief periods of limited profit, followed by a longer period of grave losses. Considering airlines have been reasonably profitable for the last few years, predicting that the party is over and losses are on the horizon is akin to predicting the sun will set tonight.

CloudsBelow

Some of us have long thought this might happen.

http://www.flyertalk.com/forum/air-c...l#post22711422

This is squarely on AC Mgmt as they've bullishly added capacity ... We'll see how it turns out

PLeblond

Luckily for them, parking Rouge planes has little cost to them, so that could be a useful tool.

Wpgjetse

Just bad reporting again. This is a problem in news today. Reporters don't understand on what they are reporting or Don't care.

KenHamer

Wirelessly posted (Mozilla/5.0 (BlackBerry; U; BlackBerry 9780; en-US) AppleWebKit/534.8+ (KHTML, like Gecko) Version/6.0.0.666 Mobile Safari/534.8+)

As did I. Moreover much of that added capacity was less desirable HD and Rouge seating.

Nevertheless it still seems odd compared to DL.

FlyerTalker683455

AC, management and bull in one sentence somehow makes sense

winnipegrev

With the mainline 763 and 333 being easily parked swing capacity and possible accelerated retirement of 15 more E90s, I see this as mostly a non-issue. When and if yields start dropping rapidly enough AC will park them.

Lights_a_blur

With the back-to-back seat sales in the last few weeks, one would think they are starting to worry about yields and load factors now, especially domestically. Can parking aircraft be that far away?

CloudsBelow

Parking aircraft is not as simple and easy as it sounds in the AC FT forum - whether frames are fully owned or not.
I'd suggest TS will be close to the brink and WS will have shelved widebody plans before AC are parking aircraft in any meaningful numbers.

AC Mgmt must have thought either a) the extra supply will be soaked up in the market or, b) if not, we'll flex our new-found muscles to squeeze Transat and Westjet.

Amazing how your mantra and company image can change . . . The cries of "AC always losing money" will change to "AC picking on the little guy" in the coming months IMO

ACYYZ/SD

I'm going to say AC is ahead of the curve here. Growth opportunities are stagnant and limited at best domestically, which explains the impetus for expanding Internationally.

vernonc

Yes. But will the lower CAD dollar and job losses in western canada result in slower international demand too? Example just saw an article about fewer Canadian tourists to Florida. With the recent terrorism turmoil in parts of Europe that might also affect demand. And off course the Canadian dollar swan dive makes everything more expensive.