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Anybody expect any announcements from AC at Farnborough?


rudder
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Forget what you read in a newspaper. Figure out for yourself, where are WS costs 30% to 40% cheaper?

Fuel

Pilots

Landing fees

Nav fees

Airplane lease/purchase

anywhere?

WJ domestic unit costs are lower due to guage and stage length. By domestic, I mean North America and the Caribbean.

Bottom line is if RASM > CASM then you win :icon_super:

Edited by rudder
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Forget what you read in a newspaper. Figure out for yourself, where are WS costs 30% to 40% cheaper?

Fuel

Pilots

Landing fees

Nav fees

Airplane lease/purchase

anywhere?

I believe WS's costs for airport staff, call centre staff, ramp, FAs, backroom staff etc. etc. are much cheaper. I can't speculate on what net effect this has to bottomline though.

Edited by seeker
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I believe WS's costs for airport staff, call centre staff, ramp, FAs, backroom staff etc. etc. are much cheaper. I can't speculate on what net effect this has to bottomline though.

Labour costs are less than 25% of the total airline costs. If WS staff were paid nothing it would not make 30% of total costs, let alone 40%. I believe also that the difference in hourly costs betwen AC and WS is balanced because WS can afford to use more people to do the same job such as call-centre or checkin.

Fuel is 25-30% of costs

Labour 20-25% of costs

Aircraft ownership is 10%

Landing and Nav and terminal charges 10%

Maintenance 10%

These are roughly the same no matter the airline.

In the remaining 15 to 25% can anyone reduce total costs 30% to 40%.

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Labour costs are less than 25% of the total airline costs. If WS staff were paid nothing it would not make 30% of total costs, let alone 40%. I believe also that the difference in hourly costs betwen AC and WS is balanced because WS can afford to use more people to do the same job such as call-centre or checkin.

Fuel is 25-30% of costs

Labour 20-25% of costs

Aircraft ownership is 10%

Landing and Nav and terminal charges 10%

Maintenance 10%

These are roughly the same no matter the airline.

In the remaining 15 to 25% can anyone reduce total costs 30% to 40%.

I agree, there are so many fixed costs out there that on a absolute dollar basis I don't really believe WS is that much cheaper than AC either, but when that 30-40% stat is thrown about I believe it is in reference to CASM and not total dollars. I'm not sure truly how much the delta is even on a CASM basis, but those premium seats have a increasing effect on the CASM as well as the RASM. Just like for a Sunwing or Canjet the extra 23 seats over WS on an 738 will have a substantial decreasing effect on CASM.

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The 30%-40% difference in CASM between WS and AC is a good example why a CASM comparision between two similiar airlines is shaky and between two dis-similiar airlines is not meaningfull.

The 30-40 figure comes directly from some idiot dividing AC's stated CASM by WS's stated CASM but since the analysts that do this have no firm knowledge of the industry they do not see the flaws.

If you wanted to take the time to figure out why the numbers are different one would only need to look at:

Seating config-

Putting only Y seats into an A333 drops the CASM of that airplane by 40%

Putting only Y seats into an A320 drops it by 10%

Operating area-

The AC longhaul flying costs it a large amount due to exponentially increased fuel burn and crew costs.

We used to think that increasing the stage length lowered CASM but there is a point (and beyond which AC operate a lot of flights) where CASM starts to increase again.

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Guest rozar s'macco

If a flight is blocked above 9 hrs a dozer is on board, and an augment FO is added above xx hrs...I'm on the narrowbody fleet so I don't know the rules but for the sake of argument call it 12 hrs? I could imagine that within the bean counting vacuum, running stage lengths at 9hrs+:01 and again at xx+:01 would be a confounding cost exercise...those damn pilots and their wanting full pay for every hour at work, and we only need the 3rd (or 4th) guy for :01! True long-haul appears to costs 'exponentially' more than just long-short-haul. I think it is decidedly linear, but with steps at the 9 and 12 hr marks.

I would further counter with the suggestion that splitting the stage into two, keeping an additional crew at the tech stop so as to eliminate that pesky dozer or auggie, would obviously be false economy, but it proves my point. There are city pairs where the auggie is held up to be the make or break line item w.r.t profitability. In fact there is a battle in progress right now on that precise issue. Company wants 3 pilots, pilots want 4. Route viability is at stake! No mention made that every other airline operates with 4 on those stage lengths, even supremely profitable ones. Bean counters are confident flight safety is not an issue. How's the weather in the vacuum, again?

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....would be a confounding cost exercise...

The exercise is not hard to do at all, in fact AC did one on YYZ-HKG with the A340-500 before introduction and it showed that there was no way to make money. The hard part is to get anyone at the top to listen.

...I would further counter with the suggestion that splitting the stage into two, keeping an additional crew at the tech stop so as to eliminate that pesky dozer or auggie, would obviously be false economy, but it proves my point.

The solution is to charge a higher fare for the non-stop which is something that AC finally did on YYZ-HKG, but then when they had too much capacity last year with both YYZ and YVR they decided to cancel some YVR flights instead of the YYZ fights and flow the traffic over YVR. Instead they just lost the YVR-HKG traffic.

There are city pairs where the auggie is held up to be the make or break line item w.r.t profitability.

Every little bit helps but the biggest problem is the fuel. As a pilot you are well aware that it costs fuel to carry fuel....but have you ever considered how that affects route costs. The average fuel burn per hour of a 13hour flight can be 50% above the average of a 3 hour flight. When fuel was $25/barrel no one cared too much but as fuel gets to be a bigger percentage of the total costs trouble is just over the horizon.

.. No mention made that every other airline operates with 4 on those stage lengths, even supremely profitable ones.

Not many airlines even consider the problem or even know about it.

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Labour costs are less than 25% of the total airline costs. If WS staff were paid nothing it would not make 30% of total costs, let alone 40%. I believe also that the difference in hourly costs betwen AC and WS is balanced because WS can afford to use more people to do the same job such as call-centre or checkin.

Fuel is 25-30% of costs

Labour 20-25% of costs

Aircraft ownership is 10%

Landing and Nav and terminal charges 10%

Maintenance 10%

These are roughly the same no matter the airline.

In the remaining 15 to 25% can anyone reduce total costs 30% to 40%.

Fido, you forgot translation services as required by the ACPPA. A figure I once heard was north of $100M/yr for translation services at AC. Don't know how true or accurate that number is.

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Fido, you forgot translation services as required by the ACPPA. A figure I once heard was north of $100M/yr for translation services at AC. Don't know how true or accurate that number is.

I suspect that IF the figure is $100 million then that figure includes language courses given to public contact employees which are a marketing expense and might likely be incurred anyway.

Look instead at 100 million as a small number in a 10 billion expense story. It is only 1% of all costs.

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I suspect that IF the figure is $100 million then that figure includes language courses given to public contact employees which are a marketing expense and might likely be incurred anyway.

Look instead at 100 million as a small number in a 10 billion expense story. It is only 1% of all costs.

It's still a significant expense that WJ does not have. However, IMO WJ should be required to provide the same bilingual services as AC as part of their AOC. Right now, an additional $100M would look good on the bottom line.

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Fido, you forgot translation services as required by the ACPPA. A figure I once heard was north of $100M/yr for translation services at AC. Don't know how true or accurate that number is.

I think that a gross error check is called for on this one. This would be equivalent to 1000 employees at $100,000 per year. I think there's about a dozen employees in the translation services department and I would suggest that none of them makes $100,000 per year.

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I think that a gross error check is called for on this one. This would be equivalent to 1000 employees at $100,000 per year. I think there's about a dozen employees in the translation services department and I would suggest that none of them makes $100,000 per year.

I have no idea if the figure quoted is correct or even in the right ballpark but whatever the number is it probably includes the cost of printing everything twice, creating double signage for everything, additional advertising costs due to the need for buying twice the column space, etc, etc. I think I remember dagger speculating that even if the bi-lingual requirement of the ACPPA was to be removed that there would likely be almost no change in AC's language policy or costs since they would continue to want to serve the Quebec/French market and probably get some preferential government treatment due to the policy. I wonder if AC gets a positive return on the language policy costs?

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