Guest b52er Posted June 8, 2003 Share Posted June 8, 2003 Just think of how flush WJ would be with profit, how wealthy the shareholders would be, how happy the employees would be if they too chose to stop paying their leases, and made the leasing companies take a hair cut simply because they wanted better leases (the ones that are leased of course) full well knowing the leasing companies don't want their aircraft back. Perhaps something to explore? http://www.globeandmail.com/servlet/story/RTGAM.20030607.uairc0607/BNStory/Business/ Link to comment Share on other sites More sharing options...
Mitch Cronin Posted June 8, 2003 Share Posted June 8, 2003 .... and I thought you were smarter than the average dog. You know danged well that to do that you'd have to be in dire straights first... Would that be so all fired wonderful? Link to comment Share on other sites More sharing options...
Guest neo Posted June 8, 2003 Share Posted June 8, 2003 Man, have you got a great idea! Just think of how much money I'd have if I stopped paying our mortgage! Or our VISA bill. Consequences? What consequences?! You should take that one to Mr. Beddoe. I see a bonus in it for ya. neo Link to comment Share on other sites More sharing options...
Guest b52er Posted June 8, 2003 Share Posted June 8, 2003 Exactly.......if creditors are not going to go after THEIR asset when the money stops coming in.......then why should one pay for the use of it? This is great!! Lets see....new 700 series......no payments on them.......equals........huge windfall.......and yet AC STILL can't make any money! What a great and valuable entity we have in AC!(smiley thing). Link to comment Share on other sites More sharing options...
Guest ACsidestick Posted June 8, 2003 Share Posted June 8, 2003 Don't worry, as soon as AC emerges with a lower economy of scale than WJ, you'll soon have the opportunity to see. Remember, the entire point of all of this is that Beddoe won't be smiling much longer. We'll try not to lower ourselves to your level with the salt rubbing though. Link to comment Share on other sites More sharing options...
Guest ECB Posted June 8, 2003 Share Posted June 8, 2003 b52er, The antics of the former Crown Corp. can annoy even the most easy going WestJetter but lets not twist the knife in others misfortunes. When you lower yourself to the likes of some of their posters you do us a disservice. Others failure is not a prerequisite for our success. The Globe Investor has this positive story on WestJet: WestJet seen gliding through turbulence JORDAN HEATH-RAWLINGS 00:00 EDT Friday, June 06, 2003 When WestJet Airlines Ltd. secured a contract with Aviation Partners Boeing last Monday, it was another example of why WestJet remains a solid long-term investment in an industry fraught with volatility, analysts say. The deal, which will see Aviation Boeing install Blended Winglet Technology on WestJet's growing fleet of Boeing 737-700 series aircraft, will make WestJet the first North American airline to employ this technology on the new planes. The equipment is expected to improve the aerodynamic and handling performance of the jets, boost range and reduce fuel burn by 4 per cent. Such moves -- picking up on a new technology and applying it to improve their bottom line -- are typical of WestJet, said Desjardins Securities Inc. analyst Nadi Tadros. "On the cost side, they're much more competitive [than other Canadian airlines]," he said. "They will keep piling on more and more of these things to shrink their costs." Despite a growing fleet of 737s -- the company currently flies 38 Boeing 737s, 19 737-200s and 19 737-700s, and plans to add seven new planes while retiring one old one to finish 2003 with 44 aircraft -- as well as the addition of more routes at a time when capacity is not at a premium, WestJet president and chief executive officer Clive Beddoe said the company is actually shrinking its cost base. "We are becoming more and more efficient as we get bigger and more economic in scale," he said in an interview. "We have new equipment and a brand new 737-700 series of airplanes, which are 30 per cent more efficient and cost much less to maintain. "They fly more hours in a day. They fly more days in a year. They're faster and they have more seats." Still, even for Canada's leading low-cost airline, the first quarter of 2003 was a tough one. The company posted its 25th consecutive profitable quarter, but just barely. Profit totalled only $778,000, barely 10 per cent of the $7.1-million it reported for the same period last year, as the SARS scare, seasonal dips in traffic and a price war with Air Canada took their toll on the airline. Those challenges have reined in expectations for WestJet's near-term performance, and analysts have revised their previously rosy forecasts to allow for a period of high risk the company is expected to face over the next six to eight months. While pegging WestJet to keep pace with the rest of the airline industry, RBC Dominion Securities Inc. analysts Nick Morton and Mark Perin rated the stock -- which closed yesterday at $17.03, up 2 cents -- as an above-average risk, revising their 12-month price target down to $17.40 from $18. They pointed out in a report that the the company is gaining market share at the cost of declining load factors (the percentage of paying customers that end up in all available seats) and sharply lower yields. The RBC report forecast a share profit of 9 cents in the second quarter. For all of 2003, the RBC analysts forecast a profit of 59 cents on revenue of $851-million, compared with 69 cents on $680-million in 2002. Desjardins Securities' Mr. Tadros has a 12-month target on WestJet's stock of $19. His revenue target for 2003 is in line with the RBC analysts, but he predicts that share profit will hit 74 cents. Octagon Capital Investments Corp. analyst Tim James has set a 12-month target of $20 for the stock, and projects an annual profit of 64 cents a share on revenue of $838-million. Recent forecasts for WestJet's 2004 performance have been more bullish, predicting revenue topping $1-billion and earnings per share ranging from 87 cents to $1.02. In the short term, though, WestJet faces the same uncertainty as the rest of the Canadian airline industry. The company's yield fell by 16.5 per cent in the first quarter, and RBC expects it to get worse in the second quarter. WestJet's load factor for April was 65.6 per cent, compared with 72.1 per cent in April, 2002. During the first four months of 2003, the company's load factor was 64.7 per cent, down from 69.2 per cent during the same period in 2002. Mr. Tadros said the seat wars between Air Canada and WestJet contributed to the lower yields. He added that although he believes the company will fare well even against a leaner, lower-cost Air Canada, he thinks the next two quarters are likely to be difficult. "I don't see a pretty picture at all over the next little while," he said. He also pointed out in a report that "severe price discounting, the SARS outbreak and the resulting decline in traffic have weakened WestJet's recent numbers." What makes WestJet a better long-term investment, Mr. Tadros said, is its cost structure. The company's cost per available seat mile (CASM) was roughly 30 per cent below Air Canada's in 2002. When Mr. Tadros adjusted the formula to reflect the average length of the international flights Air Canada offers compared with the regional flights sold by WestJet, the difference jumped to nearly 90 per cent. WestJet also continued to lower its CASM in the first quarter, trimming it to 11 cents from 13 cents in 2002. "Assuming that Air Canada reduces operating costs by 25 per cent, and brings its CASM (on a non-adjusted basis) to a more comparable level to WestJet, this would still leave WestJet with an estimated 25- to 30-per-cent cost advantage," he said. Mr. Beddoe said he isn't fazed by the prospect of facing a leaner national airline when Air Canada emerges from its restructuring. "When Air Canada and the other mainline carriers across the world start talking about having low-cost carriers, it's a joke," he said. "Even shaving a billion dollars off their costs base doesn't get them close to our cost level. They've been doing that for a long time, but they haven't got there." Even though the company faced significantly lower revenue in the first quarter, Mr. Beddoe said it increased its capacity by 60 per cent during that time -- capacity he believes the airline will fill during the summer and fall, traditionally the peak time for travellers. The company will fight through the lows in the industry this year, he said, before it can take full advantage of its growing fleet -- WestJet also plans to add another nine planes to its fleet by the end of 2004 -- low cost structure and increasing capacity in 2004. "It's going to be a tougher year than other years," he said. "But it's not going to be catastrophic." Link to comment Share on other sites More sharing options...
Guest ECB Posted June 8, 2003 Share Posted June 8, 2003 See GlobeInvestor article in my post above. I suspect WJers (including Clive) will be smileing for a few years yet. Hopefully, with a solid rational business plan, you AC types will be as well. I agree about the salt thing... Link to comment Share on other sites More sharing options...
Guest neo Posted June 8, 2003 Share Posted June 8, 2003 Yes, you're right b52er, it's a great idea! It makes sense, your financial acumen is awesome, it truly reflects a new and valid perspective on business reality. Take it to Mr. Beddoe. Your future looks very bright indeed. Link to comment Share on other sites More sharing options...
Guest b52er Posted June 8, 2003 Share Posted June 8, 2003 Thanks for the encouragement Neo!! Link to comment Share on other sites More sharing options...
Guest neo Posted June 8, 2003 Share Posted June 8, 2003 Encouragement?! Buddy, I'd like to hire you as my financial advisor. Except, of course, that Mr. Beddoe has first dibs. Lucky WestJet. They get all the breaks. neo Link to comment Share on other sites More sharing options...
Guest b52er Posted June 8, 2003 Share Posted June 8, 2003 Cheers...... Link to comment Share on other sites More sharing options...
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