So are you predicting troubles at Westjet with the introduction of the new Res system just like happened in 2004 with the Revenue Management system?
$20 million loss.

[QUOTE=Coffeebean]
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.



Even if all that were true, and I say its not, the business model is working and the overall corp will show a profit.............The one trick puny pony has income from flying only and if AC's numbers are below break even we'll also wait and see punys numbers............wonder if they are going to put bonuses in the cost line this Q.

And gee, AC did not cancel any routes this month or last

ACE will show a profit by virtue of having sold off a portion of itself, and by virtue of the strengthening C$ vs US$. On a operating basis, they'll produce pretty much no earnings on revenues of $2.3b. Thats all revenues, Parnel. Passenger, Cargo, Aeroplan, ACTS, the whole enchilada.

They don't own any of the fleet, they've sold off a portion of Aeroplan, they'll sell off a portion of Jazz, (though that doesn't look like it'll happen until the first quarter of 2006) . They can sell off bits of ACTS after that. They can continue to do this until there's nothing left to sell.

After that, the corporation has to rely on air transportation revenues for profitability, which already represent about 84% of ACE's revenue flow. YTD passenger revenues: $6.3b, total revenues: $7.47b.

If air transportation doesn't produce a profit that covers the cost of capital, the business is in trouble, again.

As for WJ, their costs may be up this quarter, their yields may be slightly down, their load factor, assuming 74% for December, (it was 74.7% last December), will be 73.2% with a break-even, including interest expense, around 69%. It was 67.8% in the third quarter.

That should produce an operating profit, excluding interest, (just like the way ACE calculates their operating profit), including the provision for profit share, of about $30m and a margin pretty close to 10%.

Not bad for a one trick pony. Maybe if ACE started cancelling some routes that they were losing their shirts on, they might get the sorts of margins WJ will have.

It'd make them a more viable carrier in the long term. Better the short term pain now than the long term pain later.

Canadian barely made it 10 years, Wardair never made any money flying airplanes, (they made lots of money buying and selling aluminium), C3000 was a charter airline that went sched and lasted a couple of months.

WJ has had 2 losing quarters in 10 years.

Only Southwest can beat that record over the same period. I guess they are a one trick pony too. How many losing quarters did AC have over the last 10 years?

Ah yes, the infamous 200 routes from WS's 007 project. I'm sure you could enlighten us all, if you dare to post on the WS corporate espionage thread.

Just a reminder that ACE needs to post an 85.5% l/f in December if it is show an operating profit for the quarter, (when including interest expense as an operating expense as is the case with WJ).

Last Dec, ACE produced a consolidated l/f of 74.8%.

High costs, low fares........never a good combination......

Actually, you're right. Refer to any number of comments about this across the web. Southwest doesn't make money off flying airplanes anymore. Southwest makes money by buying oil significantly below current market prices thanks to an aggressive hedging/speculation program. If that counts as a profit, so does running a toaster loyalty program.

BTW, please take a look at China Aviation Oil Company (Singapore) for an example of what happens when massive bets on the price of oil go wrong.

Reminds me of the ski resort business.

Make a killing selling off real estate, the lift company operates at a continual loss, the real estate component dries up, lift company in serious trouble.
IIRC, Intrawest ski resort operations have continually lost money at Whistler/Blackcomb. I would be surprised if their are many ski resorts that are profitable from ski resort operations.

Sorry for the OT, but I can't help but see some similarity between the two businesses.

I guess i was doing nothing else today so the Bat Phone rings off the hook and it looks like some unnecessary name calling. I'll be cleaning up posts by Coffee, Mustang and parnel. First time i have to clean them up, it's free. The second time i have to clean it up - it will cost you.

Let's clean up the language and the games. It can't be worth it.

The New Caped Crusader ^

As you note,Batman ,there is a lot of baiting going on and the weather is not good for fishing.

From my little corner of the world,Jazz flights are solid.Fares are high and AC,IMO, seems to be making money. ^

Your comments seem to be spot on. I apologize to you for deleting one (or more) of your comments. It was not personal and hope you realize that sometimes in trying to get rid of the bottom feeders, we sometimes mistakingly throw back a few of the good fish. So many fish, so little time.....

[QUOTE=Randy Petersen] The second time i have I guess to clean it up - it will cost you.QUOTE]
Is it going to be a ride in the RV?
It is pretty icy in some parts around here and ice fishing starts only in a couple of months
Just having some fun -it's sunday and it is still snowing in my part of town.

And here I thought the essence of FT was bottom feeding for miles and points and now we've apparently gone in a new direction.

http://yahoo.reuters.com/financeQuot...9278457_newsml

"Earlier this past week, Air Canada, a unit of ACE Aviation Holdings Inc. (ACErv.TO: Quote, Profile, Research) , and no-frills carrier WestJet Airlines Ltd. (WJA.TO: Quote, Profile, Research) both posted record passenger traffic figures for November.

The bitter rivals are benefiting from what National Bank Financial analyst David Newman calls a "rational, but competitive, duopoly in Canadian skies" since the demise of discount carrier Jetsgo in March.

In particular, their load factor rose again in November to record levels for that month. The key measure -- the ratio of seats sold on average on the airlines' planes -- improved even though the carriers added to fleet capacity as they broaden their reach across Canada and into the United States.

Montreal-based Air Canada's traffic figures grew largely on transborder routes to the United States and on international traffic across the Atlantic and Pacific.

The November load factor at WestJet was the Calgary, Alberta-based airline's best in more than seven years for that month, and according to Tim James, an analyst at Octagon Capital, it may be a sign of higher pretax profits to come."

That is so funny, but oh, so true!!