Who will benefit the most from Jetsgo's demise: AC or WS?
#31
Join Date: May 2003
Location: Sun Peaks, Taupo.
Programs: NZ Elite, AC SE100K, Westjet Teal, Marriott Bonvoy Gold Elite, Nexus, Global Entry
Posts: 6,127
Originally Posted by YEG Guy
The bigger issue is Fidelity Investments. Some bought a large 1 million share block of WJA.T yesterday. Only a very large instituitional investor can make this kind of trade. There were also a few other greater than 150,000 share deals this past week.
Somebody knew something 24 hours ago that prompted the 1 mil share trade. Things, that make you go mmmm..
Somebody knew something 24 hours ago that prompted the 1 mil share trade. Things, that make you go mmmm..
#33
Join Date: May 2003
Location: YEG
Programs: AC E50 MM, WJ Gold, Marriott Titanium Elite Lifetime
Posts: 3,082
Not sure what some of you are smoking but why would AC or WJ for that matter go out of it's way to accept liability of tickets held on SG stock. These are not the type of customers who are going to remember who helped get them home, or saved their vacation. They are not loyal. That's why they're using Jetsgo in the first place. I guarantee that 99% of these people when faced with their next flight purchasing decision will chase the cheapest fare they can find with no loyalty to anyone. Thus, they should receive none in return. Harse maybe, but UGWUPF.
Great timing for Jetsgo to cease just prior accepting what was probably strong bookings for the March break period.
Great timing for Jetsgo to cease just prior accepting what was probably strong bookings for the March break period.
#34
Join Date: Nov 2004
Location: YYZ/YXU
Programs: E75K, Fairmont Platimum
Posts: 457
Originally Posted by Shareholder
Will this latest oil price shock finally close the doors on USAir, and permit the US industry to finally sort itself out? This is about the only way the UA/US hegemony will be retionalized. And can a merge of DL and CO, or DL and NW be far away? Once this goes down, some logic will return to that marketplace and the NAmerican continent overall.
#36
Join Date: Mar 2000
Location: YVR
Posts: 9,999
Monte does get it. I congratulate him on changing the approach quickly.
These are not the type of customers who are going to remember who helped get them home, or saved their vacation.
But even if they remain completely uncommitted to any particular airline, even one that helped them out, the bigger picture is how the general public perceives the responses. WestJet clearly got the lead on this one. They will generate a lot of positive press and goodwill by their move, and not just with people they help out.
AC might do likewise if they play it right. The "revised" statement is a step in the right direction. But the do have a history of snatching defeat from the jaws of victory.
#37
FlyerTalk Evangelist
Join Date: Aug 2000
Location: Edmonton, AB, Canada
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Posts: 10,067
If you look carefully at the AC statement it doesn't actually say they will treat SG passengers in any special way as compared to anyone else that books "a low one way fare" on their website.
#38
Join Date: Dec 2003
Location: Toronto, Ontario, Canada
Posts: 3,393
You can bet that Fidelity didn't lose... Whether it was a buyer of WS yesterday, it has been a big WS investor, and recently was buying large amounts of ACE stock. It clearly had a hedging strategy to recoup its losses on SG. And it likely worked.
As for who wins and who loses in SG's demise, let me try:
The consumer who believes a $55 transcon fare is fair, is a loser.
The consumer who believes a $299 transcon fare in July is fair, won't be any worse off.
Westjet is the biggest winner among the carriers in three ways:
-90% of its business is domestic, so 90% of its revenue base will benefit from a firming of fares
-WS now can more profitably deploy its growth aircraft, and increase its domestic market share by as much as 4-5 points. For example, it can now up its YYZ-YUL-YOW capacity from four to maybe six frequencies, and this time it can probably make money with that kind of schedule.
-WS load factors are less than AC's so it can absorb more SG clientele, though you would have to think that the most price sensitive customers now won't travel at any price.
AC gets multiple benefits.
-better pricing/yields and max loads on the domestic portion of its operation, plus a small benefit on Toronto-transborders like LGA, LAX, Florida.
(Try to get a cheap seat on Rapidair any time soon!/If I were a regular AC domestic traveller, and if my travel patterns fit the Latitude or City Pass terms, I would be locking in at the pass price ASAP because they are going going to be the best business travel bargain going!)
-AC probably increases its domestic market share by 1-2 points.
-It becomes harder for passengers in places like Winnipeg or Ottawa to use an LCC to connect to a cheap international flight (charter or sched) in Toronto, Montreal or Vancouver. The combination of a higher LCC fare and the charter/foreign sked fare may no longer be cheaper than the AC through fare.
Canjet is a winner, for it now has more room to grow at less risk. So long as it doesn't repeat SG's mistakes by expanding too quickly, it can do very well, but the fact it is focussing on YYZ instead of YHM is disturbing.
HMY and Skyservice also stand to gain.
As for who wins and who loses in SG's demise, let me try:
The consumer who believes a $55 transcon fare is fair, is a loser.
The consumer who believes a $299 transcon fare in July is fair, won't be any worse off.
Westjet is the biggest winner among the carriers in three ways:
-90% of its business is domestic, so 90% of its revenue base will benefit from a firming of fares
-WS now can more profitably deploy its growth aircraft, and increase its domestic market share by as much as 4-5 points. For example, it can now up its YYZ-YUL-YOW capacity from four to maybe six frequencies, and this time it can probably make money with that kind of schedule.
-WS load factors are less than AC's so it can absorb more SG clientele, though you would have to think that the most price sensitive customers now won't travel at any price.
AC gets multiple benefits.
-better pricing/yields and max loads on the domestic portion of its operation, plus a small benefit on Toronto-transborders like LGA, LAX, Florida.
(Try to get a cheap seat on Rapidair any time soon!/If I were a regular AC domestic traveller, and if my travel patterns fit the Latitude or City Pass terms, I would be locking in at the pass price ASAP because they are going going to be the best business travel bargain going!)
-AC probably increases its domestic market share by 1-2 points.
-It becomes harder for passengers in places like Winnipeg or Ottawa to use an LCC to connect to a cheap international flight (charter or sched) in Toronto, Montreal or Vancouver. The combination of a higher LCC fare and the charter/foreign sked fare may no longer be cheaper than the AC through fare.
Canjet is a winner, for it now has more room to grow at less risk. So long as it doesn't repeat SG's mistakes by expanding too quickly, it can do very well, but the fact it is focussing on YYZ instead of YHM is disturbing.
HMY and Skyservice also stand to gain.
#39
Join Date: Apr 2003
Location: Ontario, Canada
Posts: 972
Originally Posted by Altaflyer
If you look carefully at the AC statement it doesn't actually say they will treat SG passengers in any special way as compared to anyone else that books "a low one way fare" on their website.
#40
At Large
Join Date: Jan 2002
Location: oakville Ontario canada;AC*SE
Posts: 16,985
My suspicion is that most people would remember for a long time if one airline bailed them out after another left them stranded. They might not have had loyalty in the past, but a response like this would be a big step in developing some loyalty
And those same people will be back shopping for the lowest flt money can buy next vacation...that's the only loyalty proven time and time again.
WestJet clearly got the lead on this one
The "revised" statement is a step in the right direction. But the do have a history of snatching defeat from the jaws of victory
Its funny how you recognize that trend
yep all seats pretty much sold first profit in 6 years in Q4, $2 billion in the bank.....damn losers
#41
At Large
Join Date: Jan 2002
Location: oakville Ontario canada;AC*SE
Posts: 16,985
Originally Posted by Shareholder
Hardly a major conflict of interest as the NHL is a true monopoly and quite inbred, with no overlapping competition occuring between owning a team in Detroit and an arena in Toronto. However, for a manager/exec in one company to own shares in a competitor is both an ethical issue and a matter of conflict of interest, and I would certianly think a breach of securities rules.
More to the point, does LeBlanc own shares in WESTJET?
More to the point, does LeBlanc own shares in WESTJET?
#42
Join Date: Dec 2003
Location: Toronto, Ontario, Canada
Posts: 3,393
The press releases today that have generated many posts are largely irrelevant in the big picture. If you read all the wire service dispatches online right now, there is no mention of WS being out with better offer than AC, or AC being out with a better offer than WS. It's a complete non-issue. In that AC is adding whole flights, which presumably means there will be some Tango capacity pricing available, I would have to think this will be remembered by the passengers affected as the most tangible gesture of assistance, since WS, good intentions or not, does not seem to be adding any capacity and so its offer of special pricing may be a limited benefit.
#43
FlyerTalk Evangelist
Original Poster
Join Date: Mar 2000
Location: Southern Alberta
Posts: 20,550
"WestJet CEO Clive Beddoe told a Calgary news conference that his airline would boost capacity by 35 per cent this year and would delay the retirement of its older airplanes to meet demand." CBC
#44
Join Date: Nov 2003
Location: Richmond, BC, Canada
Posts: 1,511
I really think there is a huge misconception as to the consumer marketplace today, including airlines, as expressed in many of the posts here.
Consumer loyalty to brands, merchants, and to particular sales/service staff has been in a massive downward trend for the last couple of decades. Since airline seats aren't much more than a commodity service in many markets now, the lack of loyalty shouldn't be surprising. Airlines must market with in accordance with this new reality, hoping for loyalty as the deciding factor above price is just not in the cards as a business plan.
That said, price is certainly not the only factor. For services, like airlines, convenience and service still are factors, just significantly below price in the heirarchy of consumer choice. Loyalty is now only a factor when price, service and convenience and other factors more important to the individual consumer at the moment are relatively equalized. One factor that still contributes to a sort of loyalty in a negative way is one of perception. Westjet and Air Canada are classic examples of this. Westjet built its reputation primarily as NOT being AC. The frequent negative experiences with AC (often just because AC had initially a massively bigger market share) hurt AC while any positive AC experiences had no more effect than trying to light a night baseball game with a single match. Westjet capitalized on this perception even when they and AC offered similar prices on a route. A sort of anti-loyalty if you will.
While the mass consumer market is open to manipulation by clever marketeers, after the CANADA3000 experience and now Jetsgo, I don't think Leblanc stands a chance of resurrecting Jetsgo or starting with a new brand anytime soon.
Consumer loyalty to brands, merchants, and to particular sales/service staff has been in a massive downward trend for the last couple of decades. Since airline seats aren't much more than a commodity service in many markets now, the lack of loyalty shouldn't be surprising. Airlines must market with in accordance with this new reality, hoping for loyalty as the deciding factor above price is just not in the cards as a business plan.
That said, price is certainly not the only factor. For services, like airlines, convenience and service still are factors, just significantly below price in the heirarchy of consumer choice. Loyalty is now only a factor when price, service and convenience and other factors more important to the individual consumer at the moment are relatively equalized. One factor that still contributes to a sort of loyalty in a negative way is one of perception. Westjet and Air Canada are classic examples of this. Westjet built its reputation primarily as NOT being AC. The frequent negative experiences with AC (often just because AC had initially a massively bigger market share) hurt AC while any positive AC experiences had no more effect than trying to light a night baseball game with a single match. Westjet capitalized on this perception even when they and AC offered similar prices on a route. A sort of anti-loyalty if you will.
While the mass consumer market is open to manipulation by clever marketeers, after the CANADA3000 experience and now Jetsgo, I don't think Leblanc stands a chance of resurrecting Jetsgo or starting with a new brand anytime soon.
#45
Join Date: Jan 2005
Location: Seattle, WA
Programs: AC Elite
Posts: 298
I think that all airlines will stand to gain. I remember after C3 went belly-up three years back, that it had an immediate upward effect on prices. That levelled off over time as capacity rose again.
WS probably will gain smaller as they are smaller. Their higher load capacities will mean more as they have a much lower capacity. AC will gain too as they profit from the higher fares, but not as much (percentage wise) as WS.
WS probably will gain smaller as they are smaller. Their higher load capacities will mean more as they have a much lower capacity. AC will gain too as they profit from the higher fares, but not as much (percentage wise) as WS.