Doublespeak

[Cargo Agent]

"We are the leading low-fare airline in Canada and we don't want to damage that franchise," Mr. Beddoe told analysts during a conference call yesterday. "We can see the markets will adjust to higher fares, but there will be some decline in demand if we're not careful."

WestJet's competitors -- Air Canada and, to a lesser extent, CanJet Airways -- have also made a return to a higher fare environment difficult because of seat sales and special promotions that WestJet has felt compelled to match. "We are dragged down to the lowest common denominator," Mr. Beddoe explained.

If WJ was the low fare leader in Canada, why would it have to match fares of AC and CJ? It should already have the lowest fares.

[dagger]

Indeed, it is already by definition the lowest common denominator. What a hoot

By the way, here's what Doug Reid of Queens had to say about WS' Q2 in today's Natl Post: OUCH!

"WestJet's profit performance is pathetic," said Doug Reid, a business professor at Queen's School of Business. "I could get a better rate of return by leaving my money in my chequing account. For all intents and purposes, this has become a break-even airline."

[Mitch Cronin]

From a non-financial-guy perspective... what's wrong with that?

Truckloads of happily employed people... airplane loads of happy customers.... An airline that continues to grow to employ more people and carry more people safely and comfortably.... Sounds like a bit more than "break even" for many? If they're not losing money at that, and in fact are even making a small profit, what's to criticize?

I gather, if I get any answer at all, it will be something about investors needing a decent return for their dollars... But won't those be the same folks who scream when airfares actually reach a level that can sustain profitability? ... I guess these analysts and investors all figure the "work" of investing is worth more than the "work" of the airline employee... We still make too much I suppose eh?...

"Pay them less" There you go. That's the answer. Then guys like Doug won't have to keep his money in a chequing account, and spend too much of it when he flies off to his summer home.

Sorry CA... you were on about double-speak?

[Cargo Agent]

From a non-financial-guy perspective... what's wrong with that?

Truckloads of happily employed people... airplane loads of happy customers.... An airline that continues to grow to employ more people and carry more people safely and comfortably.... Sounds like a bit more than "break even" for many? If they're not losing money at that, and in fact are even making a small profit, what's to criticize?

I gather, if I get any answer at all, it will be something about investors needing a decent return for their dollars... But won't those be the same folks who scream when airfares actually reach a level that can sustain profitability? ... I guess these analysts and investors all figure the "work" of investing is worth more than the "work" of the airline employee... We still make too much I suppose eh?...

"Pay them less" There you go. That's the answer. Then guys like Doug won't have to keep his money in a chequing account, and spend too much of it when he flies off to his summer home.

Sorry CA... you were on about double-speak?

Clive isn't the only one that knows how to doublespeak. Isn't it part of the curriculum for most Business degree's?

[Kid]

Truckloads of happily employed people... airplane loads of happy customers.... An airline that continues to grow to employ more people and carry more people safely and comfortably.... Sounds like a bit more than "break even" for many? If they're not losing money at that, and in fact are even making a small profit, what's to criticize?

The only problem with a profitless Westjet is that a percentage of the profit is what is keeping the employees happy, hence keeping the "guests" happy etc. etc.

[Maverick]

Well CA, I'll have a kick at it as well. First off Clive is pretty much a what-you-see-is-what-you-get kind of guy and I've heard him say some pretty eye popping things in meetings. He doesn't mince words and says what's on his mind good or bad. Unfortunately this carries over into these conference calls but wouldn't you rather hear what he actually thinks instead of sound bites? this undoubtedly is a PR persons nightmare but it does foster tremendous employee loyalty because you never feel that you're getting lied to. After almost 7 years and 500% growth I've seen some serious blunders but overall this is still a rock solid company with motivated employees in a very slippery industry.

dagger-dog,as usual you tell have the half the story, You have been blathering on for years now "Just wait until all the pieces fall into place", "Just wait until Q (insert whatever quarter and year you like here) until the full savings are realised", "Meat in a bologna sandwich" (not really related to this thread but my personal favourite!!) blah, blah, blah (etc, etc, etc). Obviously if you are to be taken seriously you will acknowledge that WJ has had some substantial one-time financial hits affecting the past few quarters (LiveTV install, winglets, 737-200 writedowns etc.) that ultimately will increase profitability. Jetsgo admittedly slipped in under the radar (see sentence, "blunders" above) but that was ultimately the result of not getting into YYZ fast enough. If we can acknowledge all the extraordinary factors for AC (I can) then the same courtesy must be extended to WJ.

Mitch, WJ is not the airline equivalent of an animated Disney musical but even with all the bitching and moaning almost every employee I've ever talked to still enjoys working here.

Kid, why shouldn't your compensation (and mine) be tied to the health of the company or the general state of the industry? It was the inability of AC to control spending that ultimately lead them into CCAA. I know there will be howls of protest but at the end of the day AC's inability to shrink the outgoing cash was almost the death knell. WJ can't control every cost but profit share is a big buffer in this day and age.

[Cargo Agent]

Well CA, I'll have a kick at it as well. First off Clive is pretty much a what-you-see-is-what-you-get kind of guy and I've heard him say some pretty eye popping things in meetings. He doesn't mince words and says what's on his mind good or bad. Unfortunately this carries over into these conference calls but wouldn't you rather hear what he actually thinks instead of sound bites? this undoubtedly is a PR persons nightmare but it does foster tremendous employee loyalty because you never feel that you're getting lied to. After almost 7 years and 500% growth I've seen some serious blunders but overall this is still a rock solid company with motivated employees in a very slippery industry.

Mav, I actually listened to the conference call and Clive sure was hesitant to answer some questions he was asked. I sure would have liked to hear what he had to say when asked if T/B was profitable, but he simply refused to discuss it.

He had no problem stating that WJ is the "Low Fare" leader, but also mentioned that WJ had to lower fares to match CJ and AC. Which is it? Undoubtedly he is a PR persons nightmare, because at times it sounds like he spouts off whatever comes into his head, unless of course you ask him for specifics.

At the end of the day though, he is doing what he's paid to do, push the positive downplay the negative.

[wizard]

Clive was asked about Air Canada's E190's and would Westjet be looking into getting some ? Clive said they are always looking at the smaller jets but they have compared the E190 to B737-600's and the 600's are just as cheap to operate. Could sombody please tell me how true is this statment as I would think one the fuel burn would be higher in the 600 because of more weight and would this not cost more for landing fees ? and Westjet would also have more seats to fill 132 seats and E190 has only 93 seats.

[flybye]

Clive was asked about Air Canada's E190's and would Westjet be looking into getting some ? Clive said they are always looking at the smaller jets but they have compared the E190 to B737-600's and the 600's are just as cheap to operate. Could sombody please tell me how true is this statment as I would think one the fuel burn would be higher in the 600 because of more weight and would this not cost more for landing fees ? and Westjet would also have more seats to fill 132 seats and E190 has only 93 seats.

I'm going to take a stab at it; I think he meant it was cheaper for WestJet to operate the -600 vs. the emb. Common fleet type, spares, pilots, trng, mtce, etc. Also, I've heard alot of reference to flex weights lately. Ex: you tell CYMM airpt auth that you'll only fly in there at or under 120,000 lbs (for example), then this is all you get billed for, vs a full up weight 150,000 lb aircraft (again, just an example - I don't know what the actual weights might be). Also the -600 will have 116 seats vs. 136 on the -700.

My humble thoughts for you to muse!

[Steam Driven]

While not being an expert or privy to what goes on in the "Oval Office" what I got from what Clive said was that "in our operation" the -600's were cheaper to operate than the EMB's.

Common fleet, common type rating, flexibility with crews/training, Mtce spares, those costs would go up if we had another aircraft in our fleet. The EMB.

As far as landing fee's we have a flexible weight plan in operation with Nav Canada. The plane weighs less, we pay less. We do not always pay landing fee's based on the maximum operating weight of the aircraft.

Cheers.

[wizard]

Thanks for the help as that makes a lot more sense as I was just comparing the two aircraft side by side and I did not even think about MTC Training, pilot training, and having to stock new parts all good points as Clive just made it short and sweet and made it sound like the 600 was just as efficient as a E190. I kinda thought that seat number sounder like the same as the 700 but I was looking at the Boeing web site and pulled up the stats on the 600 and they said the class 1 was 113 seats and class two was 137 so I did not know what class Westjet was getting. I think it would not make to much sense to have the same number of seats as the 700 thanks again.

[flybye]

While not being an expert or privy to what goes on in the "Oval Office" what I got from what Clive said was that "in our operation" the -600's were cheaper to operate than the EMB's.

Common fleet, common type rating, flexibility with crews/training, Mtce spares, those costs would go up if we had another aircraft in our fleet. The EMB.

As far as landing fee's we have a flexible weight plan in operation with Nav Canada. The plane weighs less, we pay less. We do not always pay landing fee's based on the maximum operating weight of the aircraft.

Cheers. 

Hey Steam, we said almost the exact same thing........were you looking over my shoulder when I posted that - I see it was about the same time.

[CanadaEH]

If WJ was the low fare leader in Canada, why would it have to match fares of AC and CJ? It should already have the lowest fares.

Where is the fare matching being done? Apparently on ROBTV it was said that the AVERAGE fare in Eastern Canada has risen 80% post-Jetsgo and has not changed in Western Canada.