Kip Powick Posted October 21, 2003 Share Posted October 21, 2003 Tuesday, October 21, 2003 WestJet Airlines Ltd.'s third-quarter profit increased by nearly 40%, even though the low-cost carrier says it was forced to sell almost half of its fares at "seat sale" prices due to intense competition fuelled by rival Air Canada and its "scorched earth policy." Moreover, Clive Beddoe, WestJet chief executive, alleged his rival will remain in court-ordered bankruptcy protection for as long as possible -- until next April -- to avoid making payments while selling seats "well below" cost. "If you can weaken your competition through [bankruptcy protection], then it's easier to emerge from bankruptcy protection," Mr. Beddoe told financial analysts and reporters in a conference call. Link to comment Share on other sites More sharing options...
CanadaEH Posted October 21, 2003 Share Posted October 21, 2003 Makes sense, doesn't it? Link to comment Share on other sites More sharing options...
Guest neo Posted October 21, 2003 Share Posted October 21, 2003 I've heard a number of people make reference to Air Canada not paying its current bills, Mr. Beddoe is just the latest. Perhaps someone familiar with the process could clarify. My understanding is that a company in bankruptcy protection continues to pay bills as approved by the court monitoring the CCAA process. It's only payment on debts incurred prior to entering CCAA that are held back. And of course, any supplier or debtor to Air Canada may renegotiate the terms under which they do any ongoing business. Think about it: why would you as an outside supplier keep doing business with Air Canada if they weren't paying their current bills? Yes, there's a FORMER bill for which you may receive less than what you were owed, and yes you may renegotiate new terms for future business, but your ongoing bills are paid as permitted by the court that oversees the CCAA process. What a pity Mr. Beddoe can't simply celebrate his company's outstanding performance, rather than misrepresenting the situation elsewhere. A 40% increase in net profit year over year isn't good enough for you? Mr. Beddoe is beginning to sound like a greedy real estate developer. neo Link to comment Share on other sites More sharing options...
Guest Operation Bomberclad Posted October 21, 2003 Share Posted October 21, 2003 Klyde's market psychology strategy of grandstanding before the media is bound to backfire one day. The problem with lo-cost is that you can't increase revenues by raising prices because the whole market depends on absolute lowest fares. So this whole ballywhoo is about why Wetjest is not paying out a dividend which forces Klyde to blame the mothercorp every time his company fails to do so. Both Wetjest and Southwest are overstating their profits this time around, for whatever reason. :[ OB Link to comment Share on other sites More sharing options...
Guest Simcoe Posted October 21, 2003 Share Posted October 21, 2003 Paying a dividend? I think shareholders would rather see the money ploughed back into acquisition of NG aircraft, 40% growth producing 20% return on equity and an increase in shareprice from $16 in July to $27 today. Overstating profits? Give me a break. Link to comment Share on other sites More sharing options...
E-HANDLE Posted October 21, 2003 Share Posted October 21, 2003 Do you have the forensic accounting evidence to back the statement about overstated profits? Link to comment Share on other sites More sharing options...
Guest Operation Bomberclad Posted October 21, 2003 Share Posted October 21, 2003 Robtv mispells Westjet WEST JEST Apparently, someone has been reading my posts!! (Scroll down to 12pm for "Lunch Money") http://robtv.com/channels/hubs/pastprograms_highlights_mon.html http://makeashorterlink.com/?K4BB23946 :[ OB Link to comment Share on other sites More sharing options...
E-HANDLE Posted October 21, 2003 Share Posted October 21, 2003 Neo, I believe that the bondholders and some aircraft lessors are the people not being paid. Air Canada has said that lessors will get their payments resumed when they re-negotite their leases. (Reminds of a National Lampoon cover featuring a dog and a revolver:-)) The bondholders are owed billions in pricipal and interest; money they loaned AC in good faith. I understand that they will be offerd something of an equity interest in the "New Air Canada" Link to comment Share on other sites More sharing options...
Guest Simcoe Posted October 21, 2003 Share Posted October 21, 2003 Which makes your posts, and the editorials associated with them, irrelevant to anyone with a brain.... Link to comment Share on other sites More sharing options...
Guest Operation Bomberclad Posted October 21, 2003 Share Posted October 21, 2003 LOL!!! :[ OB Link to comment Share on other sites More sharing options...
Guest sanders Posted October 21, 2003 Share Posted October 21, 2003 You're just a little sad that your shares at AC are worth Jack Sh**!! Worthless posting as usual by an uneducated sloth!! Link to comment Share on other sites More sharing options...
CanadaEH Posted October 21, 2003 Share Posted October 21, 2003 With all the renegoatied contracts/leases Air Canada should be in a good position to make some money, right? It's going to be sad to see how much Air Canada has lost in the most profitable quarter of the year at the expense of its (ex)employees. Link to comment Share on other sites More sharing options...
Guest Operation Bomberclad Posted October 21, 2003 Share Posted October 21, 2003 I couldn't help but slowly creep to my keyboard one more time, being a sloth and all. Let's get one thing straight one more time you idiot Wetjesters- I don't work for Air Canada, capice? Yes AC shares are worthless and I think anyone staking their retirements on a cyclical stock such as airlines had better have their heads examined. A lot of people lost a lot of money on AC-T, and may still be holding onto it out of habit. On the way down, however, people were holding on for dear life, my friends, just like anyone at Wetjest will do when their airline goes through its cycle. My best wishies to people over at WJ having jumped off from the regional and escaped the dungeon of the mothercorp. But you will find very quickly that you are chained to yet another pyramid-building scheme and can't ask for the key to be let go. :[ OB Link to comment Share on other sites More sharing options...
Guest Simcoe Posted October 21, 2003 Share Posted October 21, 2003 Uh huh...... A pyramid scheme with a cost per seat mile of 10.6 cents a mile over 700 miles, live tv, leather seats, airmiles, more leg room, the best customer service in the business and before too long, a younger fleet than Air Canada. Where do you think AC's costs per mile will end up after ccaa? I'll give you a hint. It's no where near 10.6 cents a mile. The big US investment banks are taking note as well. Goldman Sachs said last week that WJA has a bigger relative cost edge than that other pyramid scheme, Southwest. What's that stat about SWA? If you invested $1,000 23 years ago in LUV, you'd be a millionaire? No wonder you are a frightened little bat... Link to comment Share on other sites More sharing options...
Guest Operation Bomberclad Posted October 21, 2003 Share Posted October 21, 2003 Ok, if the animal epithets make you happy, why not d@mnit? Knock yourself out! Wetjest has consistently overstated its rasms, and glossed its profits over on people. But far be it from me to declare this whole hoopla is just to boost the stock in order to make new shareholders happy. One thing you have to consider carrying a cyclical stock with the entire value of your retirement wrapped up in it is whether one day it might not drop in value. WJA-T lost value before, and many people have stayed away from it since. Far be it from me to say that Wetjest is growing too fast and that its load factor can't meet with its growth projections. Very much the same situation as last time. Just try to withdraw those funds after they have lost half their value in the space of a few short months, you will probably not be long for the company. A lot of regional people who bought AC shares had a cold hard lesson in cyclical stocks, and I am certain that the same fate is in store for any airline employee. I don't believe in buying stock with my hard earned cash in a company which at the same time is throwing us out of work to pad the asses of their wuvvly pilots. And I am glad that I didn't give the company one red cent towards that scheme, it must be doubly embarassing for people who took a pay cut and a layoff and watch the value of their stocks disappear. If my company survives, (which is not AC) then I will gladly compare ourselves to yours and see how the market share pans out. And you're right, this week we're more scared than we have ever been down at the regional operation, though we have all the numbers right and all agreements in place. Not unlike you Wetjest snot-bags to gloat over that kind of thing, and I wouldn't put it past you. You have all the intellectual glee of kicking at a dead dog, and so does your boss. :[ OB Link to comment Share on other sites More sharing options...
Guest neo Posted October 21, 2003 Share Posted October 21, 2003 If I was an accountant making up the balance sheet for a company in CCAA, I'd load every single charge I could into the report PRIOR to coming out of CCAA. Why would I do that? It's called the "Big Bath". Rather than drag out bad news over many quarters, you load all the bad news into one and go from there, upwards hopefully. Even companies that aren't in CCAA do it. I expect Air Canada's financial results to look abysmal until it comes out of CCAA. I'm not sure why anyone would expect otherwise, with the possible exception of the balance sheet from operations. But even there, I would expect it to take a while before all the labor concessions, renegotiated leases, etc are reflected in the results. Link to comment Share on other sites More sharing options...
E-HANDLE Posted October 21, 2003 Share Posted October 21, 2003 This is a quote from your post. Wetjest has consistently overstated its rasms, and glossed its profits over on people. I'll ask again, on what evidence to you base this claim? And would you be so kind as to explain what this statement means. Just try to withdraw those funds after they have lost half their value in the space of a few short months, you will probably not be long for the company. Are you saying that an employee of WestJet would be fired for selling their stock? Because I have sold rather a large amount over the years. Perhaps they just have not got around to tieing a can to my backside and sending me on my way? Link to comment Share on other sites More sharing options...
Guest neo Posted October 21, 2003 Share Posted October 21, 2003 The lessors have a gun to their heads? Oh please. If they're not being paid for their aircraft, they have the option of taking them home to the barn, do they not? Or is your idea of a lease that you can renege on the payments and keep the item you're leasing against the wishes of the owner? But rather than discuss hearsay, why don't you read what the Court-Appointed Monitor has to say in its most recent report(September 21st) about AC's leasing arrangements? It's very straightforward. It states that Air Canada has undertaken to reduce its fleet size by 40 aircraft. Thus far approximately 23 aircraft have been returned with approximately another 17 to follow within the next 30 to 60 days, based on negotiations with current aircraft lessors and fleet requirements. To date, Air Canada has renegotiated terms with eight lessors covering 170 of the aircraft which will remain. Furthermore, the company has reached agreement in principle with the lessors for an additional 31 aircraft and is in the final stages of preparing the documentation for approval. A total of 244 aircraft have thus far either had their leases renegotiated legally or in principle, or been sent back. The company expects to have the remainder of the leases renegotiated by the end of this month. Additionally, the Monitor reports that Air Canada's projected cash-on-hand on 12 December, 2003 will be approximately $651 million, AFTER payment of the leases. As for the bondholders, by my recollection you have overstated what they are owed by a very large margin. But, like I said, don't take my word for it: simply read what the independant Monitor has to say about the matter. neo Link to comment Share on other sites More sharing options...
Guest neo Posted October 21, 2003 Share Posted October 21, 2003 E-HANDLE, I take it you don't think O/B's comments were accurate. I can't speak to their veracity, but I can certainly draw your attention to what it's like when you feel someone is misrepresenting your employer's financial and business ethics. So now imagine that it wasn't an anonymous poster on AEF that stated those claims, but Air Canada's CEO, publicly. And he did so in a quarter where Air Canada made money hand over fist. And that WestJet and its employees were struggling to survive, let alone make money. If you can imagine all that, then you'll understand what Mr. Beddoe's comments look like. neo Link to comment Share on other sites More sharing options...
Guest neo Posted October 21, 2003 Share Posted October 21, 2003 "Klyde's market psychology strategy of grandstanding before the media is bound to backfire one day." I believe you're right. How long will he be able to work the 'poor little airline' schtick without a backlash? Especially while he's personally becoming a very, very wealthy man? What's WestJet up to now... 1000's of employees? 50 aircraft? Maybe more? Domestically speaking, they must be close to Canadian's size. They're no underdog, not anymore. I've watched WestJet since Day One. I admire their business plan; their execution of same; and their employees, many of whom I know personally. And as the employee-owners have a lot to say in how the business is run, I'll just point out this. Raking in money hand over fist while simultaneously trash-mouthing your competition is crass and vulgar. And if there's a population in this world more sensitive to that than Canadians, I'm not aware of 'em. neo Link to comment Share on other sites More sharing options...
E-HANDLE Posted October 22, 2003 Share Posted October 22, 2003 The lessors of some A321's went to court to get payments restored on their airplanes, or the ability to repossess them. The last report I could find regarding debt and perpetual debt was for $4.3 billion. If Air canada is making payments on this debt, then I stand corrected. Link to comment Share on other sites More sharing options...
Fido Posted October 22, 2003 Share Posted October 22, 2003 "How long will he be able to work the 'poor little airline' schtick without a backlash? " It worked for CAIL, it worked for CP-Air, it really worked for Ward. Tried and proven formula for getting employees and newspapers on your side. Link to comment Share on other sites More sharing options...
E-HANDLE Posted October 22, 2003 Share Posted October 22, 2003 Whether or not WestJet is making money has nothing to do with the validity of Beddoes comments. If someone damaged my property, I wouldn't expect the legal system to tell me to get over it because I have the money to repair the damage. Is the way AC is competing fair or not? Clive said that he believes it isn't, and since AC has imunity from the Competition Bureau, WJ or Jetsgo or any other company has no legal remedy. Link to comment Share on other sites More sharing options...
Guest ECB Posted October 22, 2003 Share Posted October 22, 2003 I think Clive is correct. What I don't know is if this is a planned, thought out strategy or they just can't break out of the old mold of doing things (and the credetors can't put the brakes on RM and the BOD). Hey, maybe it is a good strategy (for Air Canada)! It has reduced WJ profit and probably slowed the growth of Jetsgo, CJ & WJ a bit. But I suspect it might hinder AC recovery, in which case Clive's comments are in everyone's best interests. Link to comment Share on other sites More sharing options...
Guest neo Posted October 22, 2003 Share Posted October 22, 2003 That's a good observation. The difference is that all those airlines were losing money. WestJet is practically printing it. neo Link to comment Share on other sites More sharing options...
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