Adam Smith

The E90s will all be gone within about two years, so don't expect things to get any better with regards to interior cleanliness, USB ports, etc. Safety-critical equipment will undoubtedly be properly maintained, but anything cosmetic/comfort-related that doesn't need to be fixed probably won't be.

So, do people just not bother to read anything? The whole reason this thread became active again today is that I posted upthread that AC has sold the E90s.

The E90s have been sold.

Air Canada a vendu les E90.

A buyer has been found for the E90s.

READ THIS POST.

Your knowledge seems to be out of date on the AC-Boeing deal. I addressed the fate of those aircraft in great detail upthread as well.

BlondeBomber

Have a love hate relationship with this aircraft. Most of the time it serves its purpose well but today, as an example, showed its bad side when crew stuffs up the limited bin space in the J cabin with their equipment (not their luggage). All of the narrow side bin was full of their stuff and all of the front large side bin was full of their stuff. I shouldn't complain as I got to where I was going earlier by nabbing the last J seat on standby when someone didn't show (first world problems I know). We could make room for my small carry on but since I was in the front row, no place to put the rollerboard (not even in closet) so went to the back of the plane to find space--still better than a gate check.

At the end of the flight, I took it all in stride and let passengers deplane until I could get to my bag rather than fighting the crowd. I was still over an hour earlier than expected ^^ but it it seems strange that the J cabin bins would be so heavily used by staff. I have never seen it that bad flying on dozens of E90 flights.

Hope the replacement aircraft have places for crew things and leave the bins for passengers! (not likely I know)

RangerNS

If its anything like AC's non-closet & bin configuration in J on the MAX's, I wouldn't hold my breath.

canadiancow

I've never understood why the working crew put their bags in J. They're last off the plane anyway, so why not put the bags all the way at the back?

Symmetre

I'll probably get flamed for it, but my personal belief is its because they know full well that in J they're less likely to find their bag sharing a bin with someone's diaper bag, fast food containers, or some of the other questionable items that so often win up at the back of the plane.

RangerNS

All the galleys, as cramped as they may be to stand in, have slots for feeding real meals to everyone aboard. You'd think between YHZ-YYZ, they could put bags behind the blanks that aren't carrying TATL meals. Or, for that matter, behind the blanks that aren't holding 1980's style TATL meals on TATL flights.

af fp

HerpaYvr

Always been a pet peeve of mine. Why does the crew place their bags above the premium seats in the premium cabins? It happens on just about every aircraft. I usually say something, but then my J experience is a little cold! I sometimes, just move the bags over above to row 2 as I usually sit in 1D.

On the 787 in the PY cabin above row 12, the J stuff is placed there also. It's great for me as I am usually one of the first onboard and I usually sit in 12 H so I move the J stuff, place my two pieces above me in the bin, grab the slippers, two or three amenity kits for J and I am set!

pitz

*sigh*, you are aware that sale-leaseback arrangements are routinely conducted with financial institutions for balance sheet flexibility and tax purposes. And not legitimately because the aircraft have been 'sold' in the sense that they're "off the property".

Unless AC explicitly discloses the terms of the sale-leaseback arrangement, for all we know, the leaseback portion could be for the next 10-20 years.

With the 737Max debacle probably not having a quick resolution, if at all, as well as relatively low energy prices, and the rapidly slowing Canadian leisure-travel economy, those E90's could very well stick around for a while longer than originally anticipated.

KenHamer

So do think AC would ever contemplate selling the E90s?

Adam Smith

What a ridiculous thing to say. That has nothing to do with this transaction. AC sold the E90s because it's getting rid of them, not for financial maneuvering.

It's not, it's until 2020, because AC is getting rid of the planes. If only this had already been covered somewhere.

Given that AC has sold the E90s and has A220s on firm order, the latter parts of your hypothesis are highly unlikely, even if the premise were correct. As for the 7M8, it's possible that AC may keep some of the E90s slightly longer, but only five of them were scheduled the fleet this year anyway, one of which is already gone (left in February), and they have 43% fewer seats than the 7M8, so it won't make much of a difference.

Adam Smith

Definitely not.

The Lev

You are right that sale-leaebacks are often done for "financial engineering" purposes, however AC has declared in public documents to the market that those aircraft are leaving the fleet over the next three years. They would be in big trouble with the financial regulators if they claimed the aircraft were leaving the fleet soon and yet signed 10-20 year leases on them. That's just not considered cool by financial regulators. AC also almost certainly woulf not have wanted to financially engineer a $188 million write down on the fleet if they intended to keep them. Would have been better to just leave them on the balance sheet and let them depreciate over time.

AC may be able to extend those leases since there is unlikely to be a ton of demand for the aircraft unless the MAX stays grounded - but that's not what AC has done.

pitz

Yet you've provided no evidence that the lease terms are just for the next year or two.

Southwest, for example, has plenty of leased 733s, sitting in the desert, in various states of being stripped. A sale-leaseback arrangement is just a fancy financing and tax loss recognition arrangement typically, not a method of aircraft disposal.

AC (and CP) did sale-leasebacks of many of its planes including many of the A320s in the 1990s to raise cash. But most of those planes continue in the AC fleet even today. Citing the mere existence of a sale-leaseback arrangement on the A320s as evidence of the planes leaving the fleet would have been awfully premature wouldn't you agree?

If AC has to pay "leases" on the E90's for the rest of their lifetime, and is subject to lease termination clauses, does it really matter if they're owned or leased?

Quote:

Originally Posted by The Lev

You are right that sale-leaebacks are often done for "financial engineering" purposes, however AC has declared in public documents to the market that those aircraft are leaving the fleet over the next three years. They would be in big trouble with the financial regulators if they claimed the aircraft were leaving the fleet soon and yet signed 10-20 year leases on them. That's just not considered cool by financial regulators. AC also almost certainly woulf not have wanted to financially engineer a $188 million write down on the fleet if they intended to keep them. Would have been better to just leave them on the balance sheet and let them depreciate over time.

See above, Southwest has many 733's parked in the desert for which they're paying leases on. Retirement of the aircraft from a fleet, and retirement of the obligation to make lease payments are two separate and distinct things.

The accounting profession has standards for lease obligations and disclosures around such, and I'm sure that AC's financial reporting, MD&A, etc., complies with such.

Adam Smith

No evidence? You're the one who keeps throwing out hypotheticals, rather than looking at the facts

I have referred to the AC's year-end 2018 disclosure materials, but since you prefer to speculate wildly rather than look at facts, "The aircraft will continue to be operated under leases entered into under such sale-leaseback agreement until they fully exit the fleet progressively through 2019 and 2020, in line with the Corporation’s current fleet plans." (financial statements, note 21)

The E90 sale-leaseback is referred to numerous times without any reference to leasing the planes for a longer period than that for which they will be operated, which would be misleading if they had signed 10- or 20-year commitments, or even 5-year commitments.

Were it a sale and long-term leaseback as you suggest, it should be disclosed on the same line as the gain on sale-leaseback of 787s in 2017, "Gain on sale and leaseback of assets", which should then read "Gain (or loss) on sale and leaseback of assets". Instead, it's on a separate line, described as "Loss on disposal of assets", which is how a permanent disposition (i.e. not one with lengthy continuing use of the asset and payment obligations attached) would be described.

WN's 733s were intended to be kept longer, but they had to accelerate the retirements when it was determined that pilots couldn't simultaneously be type rated on the Classics, NG, and MAX. As for stripping a leased plane, I don't think you'll find any leased planes being stripped, because you would find that WN had to terminate the leases on the Classics and either (i) acquire them upon termination of the leases or (ii) return the aircraft to the lessors, and in either case, pay any associated penalties.

But that's only based on, you know, WN's 2018 Annual Report & 10-K, so I'm sure you'll be along shortly with another wild theory.

All of this one is totally irrelevant to the E90s. Based on the evidence, that is.

Definitely, definitely. So, you agree then, that AC's financials have disclosed that the E90s have been definitively sold and only leased back for a limited time, until AC retires them as planned during 2019-20.

Glad we can close this matter off.