Westjet Q3 - $52.8 million profit

[dagger]

For the record, Exxon Mobil's operating margin was 18.25% in 3Q.

For the record, Exxon Mobil can do that four quarters of every calender year. WS can't. Given my druthers, I'd rather own Exxon Mobil stock.

[Thebean]

For the record, Exxon Mobil can do that four quarters of every calender year. WS can't. Given my druthers, I'd rather own Exxon Mobil stock.

True, but nonetheless, you gotta admit it makes for a nice little factoid.

Now be a good supporter of the Island Airport, Dagger and fly to Ottawa on Porter tomorrow afternoon, Saturday, returning Sunday morning. Being the #2 supporter of Deluce's folly, (I'm obviously #1), this must be your highest priority this weekend.

Oops. It can't be done.

It must be nice to have the luxury of parking the fleet of high fixed cost aircraft for almost 30% of the week.

What a dumb concept.

PS, I'd fly Porter, but I'm watching Mesa's Hawaii 5-0 folly up close and personal....

[Spinnaker]

Thebean,

When you posted the numbers for Op margins in Q2, one of the US regionals was at the top. I think it may have been Skywest. Did you omit them since they are CPA or did they not report yet?

[Thebean]

Thebean,

When you posted the numbers for Op margins in Q2, one of the US regionals was at the top. I think it may have been Skywest. Did you omit them since they are CPA or did they not report yet?

Republic.....but watch for those numbers to drop in time....contract renegotiation time.

[CanadaEH]

1. WJA 19.6%

2. Republic 18.5%

3. Southwest 11.1%

4. JBLU 6.5%

5. Continental 5.5%

6. AMR 4.9%

7. Frontier 1%

8. US Airways .5%

9. Midwest .25%

10. Air Tran -.7%

11. Alaska -2.6%

Weighted Industry: 5%

Where would Jazz fit into that?

[Mitch Cronin]

Where would Jazz fit into that?

Well, now that's refreshing!.... a WJ employee who knows what sort of airline to compare his own to.

[Eddy]

Well, now that's refreshing!.... a WJ employee who knows what sort of airline to compare his own to.   

I guess we're safe to assume that, by that, your referring to the sort of airline that is able to turn a profit in more then just one quarter every year or two.

[CanadaEH]

Well, now that's refreshing!.... a WJ employee who knows what sort of airline to compare his own to. 

Nothing against WJ but they don't have the highest margins. Jazz does. Jazz made $117M on $1Billion in revenue. WJA made $87M on $1.7B. Either way it is good for all of us.

Just curious because someone made the above statement on another forum.

[Thebean]

Nothing against WJ but they don't have the highest margins. Jazz does. Jazz made $117M on $1Billion in revenue. WJA made $87M on $1.7B. Either way it is good for all of us.

Just curious because someone made the above statement on another forum.

Someone doesn't understand the concept of operating margin......

For the six months ended June 30th 2006, Jazz was allocated $660,090,000 in revenue from its sole customer, Air Canada. As you know, like other regionals, Jazz does not sell to the public.

It showed operating expenses of $588,266,000.

That indicates an operating profit of $71,824,000 for the period and results in an operating margin of $71.8m / $660.1m or 10.9%.

In the same period, WJA's operating margin was $97.2m / $812.9m or 11.95%

WJA's op margins are higher, and a point that may be forgotten is that WJ's revenues are quite a bit higher than Jazz's.

Jazz has an average casm of 27.5 cents, WJA's was 12.7 cents.

The numbers are contained in:

http://library.corporate-ir.net/library/19...20-%20Filed.pdf

http://cnrp.ccnmatthews.com/client/westjet...6&releaseSeq=18

For the record, if you look at AC's October 2006 prospectus, Air Canada's mainline operating margin in the first 6 months of 2006 was $61m / $4.935b, or about 1.25%, with casm of 15.7 cents.

It's on page 17 of the 262 page Preliminary Prospectus dated October 16 2006.

I can't find where Air Canada have listed their average stage length, it may be in the document but who wants to go thru 262 pages to find it. I don't. WJA's ASL was 827 miles.

[dagger]

Someone doesn't understand the concept of operating margin...... 

For the six months ended June 30th 2006, Jazz was allocated $660,090,000 in revenue from its sole customer, Air Canada. As you know, like other regionals, Jazz does not sell to the public.

It showed operating expenses of $588,266,000.

That indicates an operating profit of $71,824,000 for the period and results in an operating margin of $71.8m / $660.1m or 10.9%.

In the same period, WJA's operating margin was $97.2m  / $812.9m or 11.95%

WJA's op margins are higher, and a point that may be forgotten is that WJ's revenues are quite a bit higher than Jazz's.

Jazz has an average casm of 27.5 cents, WJA's was 12.7 cents.

The numbers are contained in:

http://library.corporate-ir.net/library/19...20-%20Filed.pdf

http://cnrp.ccnmatthews.com/client/westjet...6&releaseSeq=18

For the record, if you look at AC's October 2006 prospectus, Air Canada's mainline operating margin in the first 6 months of 2006 was $61m / $4.935b, or about 1.25%, with casm of 15.7 cents.

It's on page 17 of the 262 page Preliminary Prospectus dated October 16 2006.

I can't find where Air Canada have listed their average stage length, it may be in the document but who wants to go thru 262 pages to find it. I don't.  WJA's ASL was 827 miles.

A 10.9 percent op margin is what it is. Most people would love to have one. It just has to be understood that Jazz is a contract carrier and all of the risks are assumed by the carrier filling the seats, namely Air Canada. It is therefore an apples to oranges comparison. If I rent a commercial building at a particular rent, and the building operator makes a profit, it doesn't matter if the building costs across the street across the street is less. In the case of Jazz, its spread is established by its master contract with AC and will not vary greatly unless its controllable costs - notably aircraft rent, labor maintenance - change significantly or the contract with AC is altered/terminated.

[Thebean]

A 10.9 percent op margin is what it is. Most people would love to have one. It just has to be understood that Jazz is a contract carrier and all of the risks are assumed by the carrier filling the seats, namely Air Canada. It is therefore an apples to oranges comparison. If I rent a commercial building at a particular rent, and the building operator makes a profit, it doesn't matter if the building costs across the street across the street is less. In the case of Jazz, its spread is established by its master contract with AC and will not vary greatly unless its controllable costs - notably aircraft rent, labor maintenance - change significantly or the contract with AC is altered/terminated.

Agreed. Jazz's margins will stay pretty consistent in this range. It has been purpose-built in order to pay out dividends as an income trust.

As for Republic in the US, it is well known that it's margins will be slashed as it's contracts are renogotiated by the carriers who buy its capacity.

It's tuff to go into negotiations when you're making 18 pts, and the carriers that buy your capacity, (AA, Delta, UAL and US Airways), collectively make 4.5% margins.

Those RJET margins will end up in the 8-10% range. Bet on it.

[Spinnaker]

"but who wants to go thru 262 pages to find it."

From what I know I'd think you're the right guy for that.

(oh, and there you and dagger go again... agreeing on everything, what happened to the gas and matches relationship ZZZzzzzzzzz)

[Thebean]

http://ir.flyjazz.ca/phoenix.zhtml?c=19417...ol-reportsOther

It should be included in the Key Statistical Information on page 12.

I don't see it, but it may be buried deeper in the 22 page document.

[Guest rattler]

http://ir.flyjazz.ca/phoenix.zhtml?c=19417...ol-reportsOther

It should be included in the Key Statistical Information on page 12.

I don't see it, but it may be buried deeper in the 22 page document.

Appears that neigher ACE nor Jazz are publishing "stage lengths". I wonder why, unless of course they are considered to be of less importance than net numbers.

[Thebean]

Appears that neigher ACE nor Jazz are publishing "stage lengths". I wonder why, unless of course they are considered to be of less importance than net numbers.

CASM without ASL is kind of like me telling you the Canucks scored 2 goals last night.

It doesn't mean anything unless you know how many goals Minnesota scored.

[Fido]

CASM without ASL is kind of like me telling you the Canucks scored 2 goals last night.

It doesn't mean anything unless you know how many goals Minnesota scored.

No one figure of any kind tells the whole story and are useless as they stand alone.

ASL means little in the grand scheme of things. Knowing what a network carriers ASL is useless.

[Thebean]

No one figure of any kind tells the whole story and are useless as they stand alone.

ASL means little in the grand scheme of things. Knowing what a network carriers ASL is useless.

...and you, sir, are a moron.

Are you telling us that an airline with a 13 cent casm over 800 miles has the same cost structure as an airline with a 13 cent casm over 1,200 miles?

[Kip Powick]

...and you, sir, are a moron.

Hey Bean...You're embarassing yourself.....attack the "logic" not the poster.......play nice or you may be asked to get out of the sandbox.

[dagger]

...and you, sir, are a moron.

Are you telling us that an airline with a 13 cent casm over 800 miles has the same cost structure as an airline with a 13 cent casm over 1,200 miles?

It may not have the same CASM structure, but it may also have a different RASM structure.

[Fido]

...and you, sir, are a moron.

My sentiments of you exactly.

Now back to topic:

CASM/RASM/Yield/Trip Cost/Load factor/etc/etc.... are all interdependent and no one of them determines anything by itself. Going to the trouble of adjusting for an adjusted stage length by averaging an average is a waste of your time and those of us who listen to it.

Airline profitability is important at the route level and the subset flight level. From the route level 'Network Contribution' is also an important factor.

Also see the Dagger's post that talks to the point of the relationship between RASM and CASM and you have the real clue.

This is not a game of who's is bigger, but how one uses it.

[dagger]

My sentiments of you exactly.   

Now back to topic:

CASM/RASM/Yield/Trip Cost/Load factor/etc/etc....  are all interdependent and no one of them determines anything by itself.  Going to the trouble of adjusting for an adjusted stage length by averaging an average is a waste of your time and those of us who listen to it.

Airline profitability is important at the route level and the subset flight level.  From the route level 'Network Contribution' is also an important factor.

Also see the Dagger's post that talks to the point of the relationship between RASM and CASM and you have the real clue.

This is not a game of who's is bigger, but how one uses it.

Quite right.

Any statistic taken in isolation may suggest something positive or negative, and may be the subject of boasting rights, but is not a definitive analytical tool.

The only definitive analytical tool is

Revenues minus expenses = equals profit.

After all, if Jazz's CASM was definitive, Michel Leblanc would still be in business and Mr. Bean's airline could just fire up a couple of 737s and send them into Podunk to carry 32 passengers per departure, but of course, it won't.

[Thebean]

Quite right.

Any statistic taken in isolation may suggest something positive or negative, and may be the subject of boasting rights, but is not a definitive analytical tool.

The only definitive analytical tool is

Revenues minus expenses = equals profit.

After all, if Jazz's CASM was definitive, Michel Leblanc would still be in business and Mr. Bean's airline could just fire up a couple of 737s and send them into Podunk to carry 32 passengers per departure, but of course, it won't.

Ah....but doesn't it seem fairly clear that the airline with the lowest cost structure this side of the border seems to consistently be producing the highest operating margins?

The same phenomina has worked for LUV for about 35 years.

I suppose I should place a caveat on that statement until Friday morning.

[Arctic Ace]

...and you, sir, are a moron.

Being a proud WestJetter, I like to read positive comments regarding our performance. Don't spoil it.