blues deville Posted May 9, 2013 Share Posted May 9, 2013 http://boeing.mediaroom.com/index.php?s=43&item=2670 Link to comment Share on other sites More sharing options...
Fido Posted May 9, 2013 Share Posted May 9, 2013 Was this not a conversion from -700s to -800s and not a NEW order? Link to comment Share on other sites More sharing options...
thor Posted May 9, 2013 Share Posted May 9, 2013 so is the glass is half empty or half full. It seems to me that this is a replacement order for the 10 700s that are being sold. This is good in my opinion. Link to comment Share on other sites More sharing options...
YYCMatt Posted May 9, 2013 Share Posted May 9, 2013 New order. Link to comment Share on other sites More sharing options...
better4me Posted May 9, 2013 Share Posted May 9, 2013 I don't know if I would necessarily call this a new order.The first glaring example is a serious lack of increase to the line item "Assets Under Development". This line item is within the Property Plant and Equipement note and represents deposits on future aircraft purchases. On delivery one will see the deposits transfer from Assets Under Development to Aircraft Additions column. For Q1 2013 there was only a 7 million increase to Assets under development while aircraft additions increased 125 million (representing 3 new 738s delivered in the quarter). The new asset additions represent that a new 738 for WS costs about $42 million CAD. What I think happened..... new orders are for 2017/18 while the new airframes in 2014/15 are pulled from the later years existing order book. This transaction treatment would be cash flow efficient as WS would not have to expend much cash on airframe deposits. Link to comment Share on other sites More sharing options...
better4me Posted May 9, 2013 Share Posted May 9, 2013 Westjet's Q1-2013 Fleet Commitment note (fleet plan to 2018) is also a lttle bit whacked out for 2014 and 2015.For the fleet plan to be mathmaticaly accurate, three 73G lease returns in 2014 are required to result in a net 0 fleet growth. The 2015 column is even more confusing as there are 12 lease returns however only 7 returns re required to result in a net 0 fleet growth. Question is which line should the reader consider accurate. If the net fleet growth is to 0, then WS should have the lease returns at 3 and 7 respectively. If there is currently no plan to return the leased aircraft, then there should be net growth in airframes. Which assumption is true? Link to comment Share on other sites More sharing options...
Super 80 Posted May 9, 2013 Share Posted May 9, 2013 I suspect the fleet plan where the leased 700's are concerned is probably pretty dynamic at this point. The market for the 700 is pretty weak at the moment and lessors don't really want them back. There is probably a price at which they would be perfectly content to keep them. At the moment there are about 45 737-700's in long-term storage, by comparison there are only a dozen 737-800's and no 900's. Link to comment Share on other sites More sharing options...
better4me Posted May 9, 2013 Share Posted May 9, 2013 A cheap lease does not reduce the other 90% of trip costs such as wages, fuel, airport charges, etc. At some point WS is going to come to the conclusion they have run out of profitable opportunities for the 73G and perhaps a seat increase to the 738 is best course of action.I suspect the days of unlimited flight growth with 73G are comming to an end. On the smaller scale the future is Q400 and the next shoe to drop is international expansion which will free up 5-6 738s from the Hawaii operation.Another option is to turn 736 fleet into beer cans and write off the remaining investment, just like with the 732. Link to comment Share on other sites More sharing options...
Guest ziggy Posted May 11, 2013 Share Posted May 11, 2013 Call it what you want, in the end, its 10 less airplanes for WJ in their fleet plan. 10 airplanes WJ owns are being sold, not lease returns. Link to comment Share on other sites More sharing options...
YYCMatt Posted May 12, 2013 Share Posted May 12, 2013 Um no. Selling 10 737 and Buying 10 more 738 equals no change. These are new orders. The 5 -700 deferrals are the only change to the number of aircraft planned. Still up to possibly 135 frames by 2017http://www.westjet.com/pdf/ourFleet/fleetpdf_en.pdf Link to comment Share on other sites More sharing options...
Spinnaker Posted May 13, 2013 Share Posted May 13, 2013 By 2018 it is min 100 737's, max135. Link to comment Share on other sites More sharing options...
YYCMatt Posted May 13, 2013 Share Posted May 13, 2013 I think it all depends on how much traffic Encore can feed. Right now with 103 airplanes running an 80-85% LF there's not much room left. I think they will settle in at around 110-120 planes by 2018. That's just speculation though. Link to comment Share on other sites More sharing options...
rudder Posted May 13, 2013 Share Posted May 13, 2013 Quite a bit of WJ capacity increase for late 2012/ early 2013 was resultant from the TC agreement and associated new routes. Apparently under terms of that agreement TC rejected some of that capacity back to WJ. It will be interesting to see what winter 2013/2014 looks like for WJ/TC. Link to comment Share on other sites More sharing options...
Boney Posted May 13, 2013 Share Posted May 13, 2013 A few years ago WJA had a similar deal with TRZ, they contracting the whole airplane. WJA started WJA Vacations and many said the same when they planned on going it alone. WJA Vacations is doing guite well, thank you very much.TC basically indicated that it will buy seats as required, at a favorable rate, vs buying seats that may or may not be filled. Works fine for WJA as they will now have extra seats available for WJA Vacations. Business is business, seats are filled, be it from TC or WJA-V or other partners.Cheers. Link to comment Share on other sites More sharing options...
rudder Posted May 13, 2013 Share Posted May 13, 2013 A few years ago WJA had a similar deal with TRZ, they contracting the whole airplane. WJA started WJA Vacations and many said the same when they planned on going it alone. WJA Vacations is doing guite well, thank you very much.TC basically indicated that it will buy seats as required, at a favorable rate, vs buying seats that may or may not be filled. Works fine for WJA as they will now have extra seats available for WJA Vacations. Business is business, seats are filled, be it from TC or WJA-V or other partners.Cheers.Wow. A little sensitive aren't we?From your own corporate press release:For the second quarter of 2013, WestJet expects strong traffic growth and earnings among its best ever for a second quarter, notwithstanding an expected moderate decline in its second quarter RASM which will be impacted by the timing of Easter and Passover, the elimination of Thomas Cook capacity purchase commitments, the loss of the one-time benefit from Air Canada's labour uncertainty in the second quarter of 2012, and accelerating capacity growth fueled by higher utilization and the launch of WestJet Encore.http://westjet2.mediaroom.com/index.php?s=43&item=772WJ stock price is off almost 16% since the 1st quarter results were released. Sorry to rain on your parade - it wasn't intended. Link to comment Share on other sites More sharing options...
Boney Posted May 13, 2013 Share Posted May 13, 2013 The stock is quite a different animal from the company. Wja announce profits, the stock falls, while other Canadian Carriers report a loss, their stock rises. Beats the hell out of me to understand the way investors think. I guess it's the "spin". WJA tells it like it is, while others have really good "spin doctors."I'll just have to stick to my day job, flying airplanes, as I'm terrible in understanding the stock market. Better to leave that to professionals.Cheers Link to comment Share on other sites More sharing options...
rudder Posted May 13, 2013 Share Posted May 13, 2013 The stock is quite a different animal from the company. Wja announce profits, the stock falls, while other Canadian Carriers report a loss, their stock rises. Beats the hell out of me to understand the way investors think. I guess it's the "spin". WJA tells it like it is, while others have really good "spin doctors."I'll just have to stick to my day job, flying airplanes, as I'm terrible in understanding the stock market. Better to leave that to professionals.CheersIt seems that the pervasive theme in those carriers that report publicly is slight declines in load factors accompanied by declines in yields. In that type of environment, the last thing that the market wants to hear about is capacity increases. WJ has announced the largest planned YOY capacity increases and appears to be suffering the largest coincident share devaluation. Having to assume responsibility for more of the added TC seating capacity than planned and the addition of Encore inventory are coming at a time where there appears to be a weakening in the yield side of the market. And as far as demand is concerned, it is usually just a shell game where one carriers extra traffic has been picked from another carriers pocket. Therefore, capacity discipline is critical or typically all local industry players suffer. Link to comment Share on other sites More sharing options...
Spinnaker Posted May 14, 2013 Share Posted May 14, 2013 It seems that the pervasive theme in those carriers that report publicly is slight declines in load factors accompanied by declines in yields. In that type of environment, the last thing that the market wants to hear about is capacity increases. WJ has announced the largest planned YOY capacity increases and appears to be suffering the largest coincident share devaluation. Having to assume responsibility for more of the added TC seating capacity than planned and the addition of Encore inventory are coming at a time where there appears to be a weakening in the yield side of the market. And as far as demand is concerned, it is usually just a shell game where one carriers extra traffic has been picked from another carriers pocket. Therefore, capacity discipline is critical or typically all local industry players suffer. That is pretty much what i've read, and almost verbatim to what my stock guy told me. My only issue is that the fleet has so much flexibility that no one can really figure out if it is status quo or an actual increase in ASM's.It's still just airline stock, so taking the down side is just part of the game. Link to comment Share on other sites More sharing options...
Guest rozar s'macco Posted May 14, 2013 Share Posted May 14, 2013 The stock is quite a different animal from the company. Wja announce profits, the stock falls, while other Canadian Carriers report a loss, their stock rises. Beats the hell out of me to understand the way investors think. I guess it's the "spin". WJA tells it like it is, while others have really good "spin doctors."I'll just have to stick to my day job, flying airplanes, as I'm terrible in understanding the stock market. Better to leave that to professionals.CheersAC.b is down 35% this month, not sure what you're whining about. I sold at 3.20 for a triple, but the point is everybody is down not just WJA. Link to comment Share on other sites More sharing options...
Thebean Posted May 14, 2013 Share Posted May 14, 2013 The market has a very limited strategic understanding of what Encore is doing in the marketplace. All they understand is global % capacity additions and haven't analyzed where it's going or what it really means.It's '96 all over. Link to comment Share on other sites More sharing options...
rudder Posted May 14, 2013 Share Posted May 14, 2013 The market has a very limited strategic understanding of what Encore is doing in the marketplace. All they understand is global % capacity additions and haven't analyzed where it's going or what it really means.It's '96 all over. If WJ tries to do this using $79 and $99 fares on short haul turboprop city pairs using Encore then it will in fact be destructive to yields which will not be offset by stimulative increases in traffic and demand for travel. And that is what the market fears. Is Encore expecting a 100% L/F? Relying on startup labour costs and aircraft maintenance warranty honeymoons is not the recipe for long term financial success (just ask Porter). Spin it all you like but WJ shares got spanked this week. That would not have been the case absent the near term capacity increase guidance that was provided by WJ. I am still trying to get over the executive comment that perhaps WJ aircraft have been flying around "too full". WJ investors now have extremely high expectations of sustained bottom line results. AC is no longer grievously wounded nor teetering on CCAA. Within 2 years 100% of AC capacity to the sun destinations will be flown under the lower cost Rouge banner. Sunwing appears to be on a trend of adding capacity to the south at bargain basement pricing. AC is subbing more low gauge capacity to tier 2 and it is a given that AC's total costs with CHR will eventually be reduced. And Porter is defying economic gravity and continues to have an erosive effect on yields in the markets it serves.All of the airline stocks are selling off in this environment. But WJ has typically been the most disciplined on the capacity side unless there is clear evidence that added capacity will add to profits and not just revenue. It is looking a little less so these days in the estimation of investors. WJA has given back almost all of the gains of 2013. Of course it could be worse - CHR is now trading at a low not seen since 2009 Link to comment Share on other sites More sharing options...
Spinnaker Posted May 15, 2013 Share Posted May 15, 2013 You are correct on a lot of points there rudder, but take in to account that WestJet his bulging on some routes, while skinny on others. AC has the ability to gauge the aircraft to the demand - which I think is some of the methodology to Encore. We've been a one type fleet up unitl next month.For low pricing, every route ever started by WJ has been sale priced. I think the recent history proves that they quickly return to disciplined pricing / yield management. Only time will tell if Encore is a flop, but so far, those appear to be some fairly well thought out routes. Link to comment Share on other sites More sharing options...
airt Posted May 15, 2013 Share Posted May 15, 2013 Looks like Southwest is the buyer of our older 737's. Link to comment Share on other sites More sharing options...
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