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Jazz Air Buying Porter?

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It's just another angle that makes a satisfactory exit for Porter investors a very difficult proposition. The value is in the defacto monopoly, but that monopoly has not resulted in any discernable profit since launch. In the event of a sale, the monopoly would be materially watered down thus negating much of any of the perceived value of the potential acquisition in the first place.

Porter's Sept press release illustrates their dilemma. High loads, low yields in the summer as they sop up all the spill traffic available to them. As traffic declines, lower loads but higher yields. Does either scenario result in an annualized profit?

That remains to be seen.

B)

Isn't the value also in the ownership of the terminal, not just the "monopoly"? So if Deluce sells out the airline to Jazz he still gets the satisfaction of having them pay him rent. Porter has proven there's a market for service from YTZ, it may not be as big as it is now with unsustaianbly low fares, but its big enough that it would be worth serving. AC learned that lesson the hard way.

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I'd love nothing better - and so I suspect would Calin Rovinescu - if Chorus were to buy Porter. A public traded company like Chorus would have to publish its financial results, and if the airline - stripped of the terminal - was a dog instead of a raccoon, it wouldn't last long. Of course, Chorus could maintain it as a dog and watch its share price slip under $1 on the way to doing an AVEOS (Calin wins). And it's debatable how Chorus could make a case why it's not violating the no-compete aspects of the CPA. AC might seek abrogation (Calin wins). Removing the Chorus cost burden after throwing off the AVEOS cost burden would be quite an achievement. Any short-term dislocation would be offset by the long-term cost flattening of moving regional service to new, lower cost outfits. Now I'm trying to figure out if AC's move to create Altitude, a new branding for its top tier benefits for its frequent flyers, is a step towards distancing itself from Aeroplan. Not that Aeroplan wouldn't be a source of redemptions and points accrual, but I suspect AC would rather reward is best flyers differently since most prefer status benefits like upgrades to free trips. I'm especially interested whether the LCC will give Aeroplan points. Not giving those points would be a way to lower unit costs.

Edited by dagger

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I'm especially interested whether the LCC will give Aeroplan points. Not giving those points would be a way to lower unit costs.

It would also devalue the Aeroplan program further for most members, and I can just hear the howling.

It'd be a pretty radical move not to award FF points, but maybe the idea behind the LCC really is to capture an entirely different segment of the market.

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It would also devalue the Aeroplan program further for most members, and I can just hear the howling.

It'd be a pretty radical move not to award FF points, but maybe the idea behind the LCC really is to capture an entirely different segment of the market.

Most members? Who cares. It's the real FF members AC wants and it's going after them with Altitude, layered on top of Aeroplan. Like I said, to true frequent flyers, the Altitude benefits are way more important than the Aeroplan points. Non-status passengers generate most of their points with credit card purchases anyway. And AC can always reward status flyers that take LCC flights by giving them Altitude credits of some kind, which don't cost AC anything.

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Yes; Jazz / Chorus has its issues, but they only come about because of the relationship with AC. In examining the 'big picture', one must ask; what model of business provides any justification for AC's eternal continuance? As a stand-alone business, AC should and would have been put down years ago were it not for the constant federal meddling and intervention into the forces of so-called 'free enterprise'. The void left by AC's departure would be filled quickly by newer and likely healthy carriers that would move the capitalistic agenda forward instead of ‘forcing’ it into a closet somewhere else. There seems to be a false belief that AC is somehow the center of the aviation universe and all others need to consider it so when in fact, everyone would be doing a lot better if natural business forces were allowed to prevail. Just imagine where WJ, its employees and shareholders would be if they too weren't hamstrung by the unholy artificial presence of a seriously and continuously messed up AC? If AC were to sever its link with Jazz; Jazz would be required to go it alone and in this Country, that scenario might actually result in the best possible business outcome for Jazz as well?

Edited by DEFCON

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I think some out of touch CEO with too much available credit will take the bait eventually... Deluce just needs to get desperate enough to price it so someone finally takes the bait. :glare:

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Just imagine if he bundled in the buildings also and Chorus purchased the package, to become the landlord and competition for the AirCanada Feeder............

Nothing like putting 6 shells in the gun before playing Russian Roulette ...

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