..and the inevitable comparison with WestJet
 

Didn't Coffee Bean say AC's numbers would plunge in November? Looks like AC is still 4-1/2 points higher than WestJet which has a smaller more compact network and generally is the low fare carrier. Something's not going right over in Calgary. (No computer problems to rationalize this year's performance!)

Aren't both of those numbers very good? I don't pretend to know what the target might be for WJ, but i doubt it is much beyond what they achieve. WJ does not oversell flights, has lower operating costs and needs a smaller load factor to reach profitability.

Next year at this time they will be comparing the second stringers only..that is Jazz and WS since Jazz will be reporting on its own most likely.

Ac will possibly now be compared to its peers in the US.

I certainly hope Air Canada posts a profit in Q4 but I think it's safe to say that Air Canada needs a much higher load factor than Westjet to breakeven. Even with an international network to feed into I can't imagine the yields were very high this past month, as is typical for the time of year. I'm quite pleased with our numbers because they beat our goal for the month.

When WS had only 35 planes their breakeven was a lot less than now. Expansion costs money.

So did we, for the 20th consecutive month.

ACE's break-even load factor, (including interest expense) will be around 80% in the 4th quarter. WJA's will be about 69%.

October and November shows ACE consolidated at 76.7%, WJA at 72.7%.

I'd imagine ACE consolidated will do about 78.5% in Dec, WJA about 73.5%, meaning ACE's consolidated 4Q l/f will be around 77.4%, and WJA's around 73.2%.

At an 80% breakeven, ACE is on track to lose about $78m including interest expense in the quarter, WJA will make around $20m.

ACE is operating barely 80% of their summer ASM's capacity so far this quarter. WJ is operating about 94% of their summer capacity.

So for those of you keeping score, at current costs and yields, ACE will need to have a load factor of about 86% in December to break-even on an operating basis in this quarter, using the same methodology as WJ, (ie including interest expense as an operating cost). ;)

I think you're FOC...Ac is on the way to another record breaking December and you have no idea what break even is unless you still have access to AC's records and internal stuff. My sources tell me December will not be the picture you are presenting.

Aren't you a shareholder? Should you have insider sources?

I don't have inside sources but I do speak with employees who tell me they are very busy this month and loads are very good ex YYZ.
What nonsense you think up. :rolleyes:

[QUOTE=parnel]I don't have inside sources but I do speak with employees who tell me they are very busy this month and loads are very good ex YYZ.
QUOTE]


lets hope one of them is a VP in finance. :D

Well, you seem to suggest a lot that your "sources" provide you with information that the rest of us don't have (ie inside souces). The fact that this information actually comes from anecdotal opinions of employees is good to know for us trying to interpret your "sources".

Once again, we see one of Parnel's classic retorts.

Not one to deal with anything that verges on fact, his analysis consists of discussions with a few frontline employees and concludes that anyone that does not concur with his opinion is FOC. Brilliant. Simply Brilliant.

ACE's consolidated Oct and November loads are a matter of public record. 9b asms and 6.9b rpms = 76.7% load factor.

Capacity will increase somewhat in December, but only in the latter half of the month. Last year, they did about 4.4b asms in the month, about 14% higher than November 2004. That suggests ACE will produce about 4.7b asms in Dec 2005.

ACE produced a 74.8% consolidated lf last December. It's a fair guess they maybe able to increase that l/f to 77.5% this year.

That results in a consolidated 4Q l/f of 77%.

ACE managed to get casm down to 15.26 cents by flying almost 17B asms in 3q. However, they'll be hard pressed to produce much more than 13.7b asms in the 4th quarter. That'll force CASM, (including interest expense), up pretty close to 17 cents for the quarter as all those fixed costs are divided by about 81% of the asms produced in peak summer months.

4th quarter yields should be much higher than third quarter yields (20.3 cents), and probably a little higher than 2nd quarter yields, (21.2 cents). Lets say 21.35 cents, because there has been a fare amount of discounting during the quarter.

So, if you are keeping track, that results in a breakeven load factor of 79.6% and an operating loss including interest expense, of about $78m.

If you exclude interest expense as an operating cost, it's a 4th quarter operating profit of between $1 and $2m,assuming interest expense stays at the 3rd quarters $76m. That's an operating margin of about .1% on revenues of $2.25b. That's not much of a return.

If you exclude interest expense as an operating cost on WJ's side of the equation, ($13.9m in the third quarter), and add back in profit sharing, that suggests a 4th quarter operating profit of $33m, or a margin of 9.3%.

Obviously, no one knows what will happen in Dec, but history has a way of repeating itself.

We'll see what happens when they report in late Jan, early Feb. :cool: