dagger

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dagger last won the day on June 12 2016

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  1. The only time Aderoplan sale money was to come directly to AC to keep it afloat was the abortive deal by Onex (IIRC) to buy 30% of Aeroplan for $300 million. That deal died when AC went into CCAA in 2003.
  2. In negotiations, it ain't over until it's over.
  3. I'll be more interested to see how ALPA's second contract negotiation with Westjet goes. The first is likely to be cautious. It has to consolidate the ranks and won't get that if it pushes too far too fast.
  4. In negotiations, it ain't over until it's over. And I don't think it's over. Remember with Chorus, I said it wouldn't want to wait until 2018 or 2019 to get a new deal with AC. I was right on that one. AIMIA has a number of choices. Strike out as a less relevant domestic program like Air Miles offering accumulation and redemption at rates more like Avenir, or get a new deal with AC (and cut its distribution), or sell out to AC which would avoid a lot of messiness and allow AC basically to own the cash flow feeding the distributions. AC could sell off the foreign loyalty activities AIM manages. AC is going to get back some Unifor employees at AIM no matter what. A new loyalty program call centre will be staffed by Unifor employees, so absorbing AIM might actually be the cleanest thing to do. That's why AIM may wish to do a deal sooner rather than later because the closer it gets to 2020, the less it will be worth.
  5. 62 Pct to join ALPA
  6. The sale proceeds accrued to ACE and were distributed to ACE shareholders. I wouldn't say it kept AC from going under. IIRC, some of the ATCS proceeds, mainly for ground assets like the Montreal and Winnipeg bases, were folded into the AC IPO, but not the Aeroplan sale proceeds.
  7. Security Theatre 101, or rather Security Theater 10. Remember, you have to scare the bejesus out of people to keep them in line.
  8. Glass half empty or half full? Though Air Canada’s (AC-T) stock reacted “favourably” to its first-quarter results, jumping almost 9 per cent on Friday, Raymond James analyst Ben Cherniavsky said he’s not impressed. (Dagger's note: Ben is never impressed with AC). “We remain Market Perform on Air Canada,” he said. “Despite 1Q17 being better than feared, nothing in these results indicates to us that the airline’s strategy is yielding incrementally positive profits, margins, ROIC [return on invested capital], or free cash flow.” The airline reported quarterly earnings before interest, taxes, depreciation, amortization and restructuring of $312-million, exceeding Mr. Cherniavsky’s estimate of $225-million and the consensus of $253-million. “Favourable maintenance deferrals and provisions of $30-million boosted results, but NF CASM [next fiscal cost per available seat mile] guidance was increased for the year,” he said. “Furthermore, we recall how expectations were dramatically cut just 2½ months ago when Air Canada badly disappointed for 4Q16 … So, yes, the airline posted ‘an impressive’ beat, but only after lowering the bar to where it couldn’t miss! Notably, 1Q17 EBITDAR was still 27 per cent below consensus of $428-million at the start of the year, despite falling fuel prices since then. “Looking past the guidance game, 1Q17 EBITDAR fell 32 per cent year over year, EBIT margins declined 620 basis points, and ROIC dropped 450 bps to 12.9 per cent. Further, we forecast the modest 1Q17 free cash flow of $95-million will revert to a negative cash flow of $425-million for the year. Reverting to a pattern that was more common in ‘the old days,’ Air Canada also fell back into the red for 1Q with negative EPS of 32 cents. This reflects the seasonality dilemma we have highlighted many times before: a dramatic reduction in capacity from Air Canada’s peak season to low season (i.e. “parking planes” from summer to winter) effects an equally dramatic increase in its costs and, in turn, a dramatic decrease in its seasonal profitability. The growth of Rouge appears to be accentuating this seasonal dilemma for Air Canada. We also note how RASM [revenue per available seat mile] continues to fall by more than NF CASM as Rouge’s low fare capacity expands across the network .” With a “market perform” rating (unchanged), Mr. Cherniavsky did raised his target to $15 from $12.50 to reflect a higher EPS forecast for both 2017 and 2018. Consensus is $16.48. “A comparison of Air Canada’s results with the rest of the industry adds further perspective to the company’s reported ‘beat,’” he said. “Specifically, despite the market’s euphoric reaction to its 1Q17 results, Air Canada remains at the bottom of the ‘league tables’ for all metrics we track.” ------------------ Air Canada extremely undervalued – TD analyst Air Canada’s revenue outlook and earnings potential confirm that its shares are extremely undervalued, according to a new report from TD Securities. Analyst Tim James reiterated his action list buy recommendation on the stock, and raised his price target to $24 from $21, following Air Canada’s better-than-expected first-quarter results. “The Q1 results and outlook imply that the company remains on track to reach its full-year guidance and resume positive growth in 2018, results that we believe are far from being factored into the current Air Canada valuation,” James told clients. “In our view, Air Canada’s valuation remains very attractive based on any metric or comparison, particularly when considering its achievements over the past five years and its growth potential.” He highlighted several potential catalysts for Air Canada in 2017, including ongoing execution in quarters that contribute a higher proportion of the company’s earnings, an investor day in September, and the market’s increased focus on 2018 earnings and free cash flow potential. James also noted that Air Canada is seeing positive or stabilizing revenue trends in nearly all the regions it operates in. The analyst expects the company to meet or exceed EBITDAR guidance for 2017, despite ongoing weakness in the Canadian dollar. Air Canada’s year-over-year first-quarter revenue climbed 8.9 per cent to $3.64 billion, marking the strongest growth since the third quarter of fiscal 2014. James pointed to the anticipated slowdown in capacity growth in the second half of 2017, as new 787 aircraft additions slow and the company renews its narrow-body fleet. “We believe that slowing capacity growth will be well-received by investors,” the analyst said. “Despite the resulting value creation and long-term benefits, we have observed investor concerns regarding the double-digit rate of growth over the last two-plus years during a tepid Canadian economy.”
  9. Some yes, but until Robert Milton they were doing wide body heavies in their own shops. And there is nothing that says they can't have a qualified outsourcer establish a 767 line in Canada for Rouge
  10. I suspect that AC will be looking more and more at finding domestic sources for things like heavy maintenance. They have been outsourcing the wide bodies to the US, Asia, Israel and elsewhere, but if the CAD is going to be depressed by trade battles, low crude prices and more, finding more cost-effective domestic services would help in cost containment.
  11. American is cutting Y legroom from 31 to 30 or 29 inches domestically to keep up with ULCCs. Will Canadian mainline operations follow suit eventually?
  12. Quite probably. The fleet chart is vague on how lease expiring would affect the fleet. For example, would the four 767s leave as 787s arrive? So it's not clear yet to me when the amount of widebody lift increases, and how fast it increases.
  13. Bob Cummings is moving over to the ULCC. Seems as if the launch date could slide into 2018. Bob Cummings, to lead ultra-low-cost airline Ed Sims joins WestJet as EVP, Commercial CALGARY, April 28, 2017 /CNW/ - WestJet today announced the appointment of Bob Cummings as Executive Vice-President responsible for the yet-to-be-named ultra-low-cost carrier (ULCC) which will launch late in 2017 or early 2018. Bob will have accountability for all aspects of this new venture, including planning, branding, pricing, product development and operationalization. He will also continue to drive other key strategic initiatives for WestJet. Bob has been with WestJet since 2005, with almost 11 years at the EVP level with a variety of responsibilities. "Bob has been an integral part of the successful transformation of WestJet," said Gregg Saretsky, WestJet President and CEO. "We are well positioned to continue our profitable growth and I look forward to Bob's strategic thinking, leadership and execution capability coming to bear in launching this exciting new airline. "I am eager to bring our ULCC to market on behalf of Canadians looking for even lower fares," commented Bob Cummings. "I firmly believe that we have the necessary capabilities to launch another successful and exciting chapter in WestJet's history. Travellers can expect a very different approach from this new ULCC, yet one that will ultimately provide air travel accessibility to many more Canadians." WestJet also announced today the appointment of Ed Sims as Executive Vice-President, Commercial, with responsibility for all aspects of the commercial function within WestJet including sales, marketing, product, network planning, revenue management, corporate development, airline partnerships and WestJet Vacations. Ed will join WestJet on May 29, 2017. Ed's career spans more than 30 years in the tourism and aviation industries, encompassing airlines and tour operators, as well as air traffic control. He has worked in the European and Australasian markets, holding senior commercial and general leadership positions within: Tui, Thomas Cook, Virgin Groups and Air New Zealand where he headed up the international wide-body business. His most recent role was as CEO of Airways, New Zealand's air navigation service provider. "Ed brings to WestJet extensive expertise in leadership, innovation, sales and marketing, operations and change management, and I am delighted to have someone with his experience and skills join our leadership team," continued Gregg Saretsky. "As we expand WestJet's horizons, I look forward to Ed's global perspective and contributions to our growth plans." "WestJet has built a reputation that is globally recognized," said Ed Sims. "I have watched the WestJet success story from afar and now I am honoured to be given the opportunity to shape the next chapter in WestJet's history."
  14. It seems as if one of the risks of launching this ULCC idea without details is that the media is adopting the name "LessJet" for this project. Probably not the best marketing strategy
  15. Well, sometimes actions lead to unexpected consequences. But I don't think this would spark people to join a union who weren't already considering it