Updated logo and 767 preview

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brooks
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Re: Updated logo and 767 preview

#126 Post by brooks » Sun Nov 22, 2015 6:18 pm

It never will. I could see us taking the 737 into YCD if the runway and services were upgraded. Only a matter of time.
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Re: Updated logo and 767 preview

#127 Post by cjet » Mon Nov 23, 2015 3:36 pm

brooks wrote:DH772 :lol:
YYC-YYJ served by a dash8. That will never happen, and about as likely as YYC-YVR being served by Dash8. Encore was started to grow the company. Some routes will get dash service but bases such as YLW and YQQ will always need a 737 at peak periods.

Brooks sorry to burst your bubble but Encore starts YVR-YYC return on Saturday's in December. BTW Air Canada has been kicking our ass for a while now.

Cjet
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Re: Updated logo and 767 preview

#128 Post by plhought » Mon Nov 23, 2015 10:49 pm

brooks wrote:We start Calgary-Nanaimo. AC starts Calgary-Nanaimo.
We start Calgary-Terrace.
We start Winnipeg-Gatwick (this spring)
The list goes on...
I was looking at an 1988 paper schedule from Canadian last night - They were flying Calgary - Terrace 6 times a week back then. With a 737 too. Routes come and go (especially into smaller communities) as places/economy/population changes. You guys aren't special.
brooks wrote:A traveler flying YYC to YYJ for example buys a ticket on AC for $10 less (what a deal!) then gets on the plane and finds out its a Q400. Back in the 90's some still remember that this was served with a BAC146 by AirBC.
The Q400 is likely faster gate-to-gate than the 146 - :lol:
brooks wrote:The traveller then deeply regrets their decision and next time books WJ and fly's on B737. Customer/Guest is happy. I am not trying to hand out glasses of KoolAid but you guys are making out like we are making some bad choices and I would have to disagree.
I highly doubt WestJet places passenger 'comfort' over economics. They aren't stupid. Look how normal economy seat pitch has reduced to accommodate the 'plus' economy rows. It's about makin' moolah. Flying a Boeing on a leg that averages less than 70ish people doesn't make sense.
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Re: Updated logo and 767 preview

#129 Post by brooks » Tue Nov 24, 2015 7:50 am

cjet wrote:
brooks wrote:DH772 :lol:
YYC-YYJ served by a dash8. That will never happen, and about as likely as YYC-YVR being served by Dash8. Encore was started to grow the company. Some routes will get dash service but bases such as YLW and YQQ will always need a 737 at peak periods.

Brooks sorry to burst your bubble but Encore starts YVR-YYC return on Saturday's in December. BTW Air Canada has been kicking our ass for a while now.

Cjet
Please elaborate why you think Air Canada is kicking our ass? If your answer is Rouge I'm going to :lol:
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Re: Updated logo and 767 preview

#130 Post by cjet » Tue Nov 24, 2015 4:45 pm

brooks wrote:
cjet wrote:
brooks wrote:DH772 :lol:
YYC-YYJ served by a dash8. That will never happen, and about as likely as YYC-YVR being served by Dash8. Encore was started to grow the company. Some routes will get dash service but bases such as YLW and YQQ will always need a 737 at peak periods.

Brooks sorry to burst your bubble but Encore starts YVR-YYC return on Saturday's in December. BTW Air Canada has been kicking our ass for a while now.

Cjet
Please elaborate why you think Air Canada is kicking our ass? If your answer is Rouge I'm going to :lol:
All you need to look at is the 2015 financials. AC added nearly 10 percent capacity this year and maintained their 85 percent load factor. Westjet on the other hand only grew 6 percent and our load factor is falling. That tells me people are choosing AC over Westjet. You should go for a ride onboard and see why people are choosing AC. Better service, better food,more frequency much better in flight entertainment over Direct tv. Next time you fly with a commuter ask him who they prefer to fly with. Most if not all prefer AC.

Cjet
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Re: Updated logo and 767 preview

#131 Post by True North » Tue Nov 24, 2015 4:47 pm

brooks wrote:Please elaborate why you think Air Canada is kicking our ass? If your answer is Rouge I'm going to :lol:
The two that should really concern you are; customer service and customer satisfaction.
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Re: Updated logo and 767 preview

#132 Post by privateer » Tue Nov 24, 2015 9:41 pm

So...
I see we are comparing oranges to melons. This thread has really gotten off topic.
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Re: Updated logo and 767 preview

#133 Post by PostmasterGeneral » Wed Nov 25, 2015 8:54 pm

privateer wrote:So...
I see we are comparing oranges to melons. This thread has really gotten off topic.
So, it's another thread typical of AvCanada? :rolleyes:
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Re: Updated logo and 767 preview

#134 Post by True North » Thu Nov 26, 2015 1:50 pm

privateer wrote:So...
I see we are comparing oranges to melons. This thread has really gotten off topic.
You lost me. Which are the oranges and which are the melons?
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Re: Updated logo and 767 preview

#135 Post by leftoftrack » Sat Nov 28, 2015 6:40 pm

What happened to the apples
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Re: Updated logo and 767 preview

#136 Post by privateer » Sun Nov 29, 2015 12:57 pm

Your mom used them to make me a pie.
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Re: Updated logo and 767 preview

#137 Post by AirMail » Sun Nov 29, 2015 6:42 pm

I also had his mom's pie
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Re: Updated logo and 767 preview

#138 Post by Realitychex » Mon Nov 30, 2015 8:35 am

Please elaborate why you think Air Canada is kicking our ass? If your answer is Rouge I'm going to :lol:[/quote]

All you need to look at is the 2015 financials. AC added nearly 10 percent capacity this year and maintained their 85 percent load factor. Westjet on the other hand only grew 6 percent and our load factor is falling. That tells me people are choosing AC over Westjet. You should go for a ride onboard and see why people are choosing AC. Better service, better food,more frequency much better in flight entertainment over Direct tv. Next time you fly with a commuter ask him who they prefer to fly with. Most if not all prefer AC.

Cjet[/quote]

Here are a few thoughts to be considered.

Air Canada has built a church for Easter Sunday. Everything is tickety-boo on "Easter", which, in Canada is from June 1 to roughly September 20th, and then through the obvious holiday and vacation periods in the late fall, winter and early spring. After that, the "Church" is far too large for the market.

This shows up in AC's seasonal CASM numbers year after year after year. When the "Church" is full, ie in the 3rd quarter, AC generates gazillions of ASM's and RPM's and profitability is pretty good, especially when fuel is at its lowest cost in years.

In August 2015, AC generated 8.165b asm's. Two months later, in another 31 day month, they generated 6.687b asm's, or just 81.9% of peak production. Compare that to the same months in 2014, (7.398b vs 6,159b) or 83.3% of peak summer capacity. Lest anyone forget, AC does not shed any fixed costs or lay off anyone on a seasonal basis.

For this reason, AC's unit costs experience dramatic seasonal fluctuations year after year which result in dramatic seasonal profitability swings. The collection plate is full on Easter Sunday, but the picture isn't quite as rosy in November....

Even with ASM's maximized in peak summer, by it's own data, AC reported a consolidated casm, including interest expense, of C$14.08 cents in 3Q, generated over a system asl of 1,634 miles.

This is after having densed up a very significant proportion of their fleet, including the 777 slaveships, a more efficient contract with Chorus Aviation for Jazz flying, the introduction of SkyService doing the Toronto Island flying as well as the E170 flying, largely from Toronto to the US eastern seaboard, as well as the addition of the much hyped "low cost" Rouge brand, now up to about 40 tails and all kinds of other cost savings "initiatives".

WJ, whose expansion has been focused on much higher cost, short haul growth with close to 30 Q400's added in the last recent 3 years, reported a CASM including interest of C$13.02 cents, but generated over a consolidated asl of....and this is important, just 881 miles.

Stage length adjust WJ's casm to 1,634 miles, almost exactly the distance between Toronto, and both Calgary and Edmonton, where both airlines compete and as any one with even basic knowledge of the industry understands, the cost gap is huge. Or conversely, stage length adjust AC's casm to WJ's 881 mile asl.

It shouldn't be a surprise to anyone that as WJ has focused on strengthening it's feed network in smaller Canadian markets that it's l/f's are flat. Show me a regional carrier, either owned by, or flying for a network carrier that operates with the same or higher loads than the mother ship. It rarely, if ever occurs. This is why Jazz, Skyservice and even Porter no longer provide l/f data. Their loads would spook the investment community out of their shorts.

WJ is adding 4 767-300ER's over the next 8 months or so, with. as can be imagined, very low capital costs and, for now, cheap fuel.

The winter 767 flying will largely be Alberta to Hawaii, about 3,200 miles, close to 4 times it's current ASL. In the summer of 2016, they'll be flying to LGW from various locations in Canada, with the shortest sector being about 3,600 miles.

WJ's casm on this flying will be delightfully lower than it's current consolidated casm, which, even in the summer months, is significantly lower than Air Canada's casm. Needless to say, that casm gap swells significantly in the winter as AC iron goes through heavy maintenance and then sits in the weeds for a good part of the winter, looking for something to do that is compensatory. You will note that most route announcements are all about filing the church on Easter Sunday, not how to fill the church in January, other than by discounting, then discounting the discounting.

Here's another important thought: Air Canada has been in the unique situation of being the ONLY Canadian domiciled network airline operating to Europe, Asia, South America and beyond since late 1999 when Canadian Airlines collapsed. There are few, if any other examples of so called "flag carriers" who have that sort cosy arrangement.

Outside what amounts to scheduled charter ops by Transat, (and a couple others who have come and gone), only Air Canada could offer a network that could get passengers to and from secondary and tertiary markets in Canada. Transat's international flying is from a handful of key gateways, and outside Toronto, Montreal and, to a certain extent, Vancouver, the sched is of the "several flights weekly" nature, and only from Calgary, Edmonton and maybe a couple other gateways. All of it is transatlantic and they have no domestic feed of any consequence.

That changes in the summer of 2016. For the first time in 17, count 'em, 17 years, Air Canada will have a Canadian domiciled network competitor to it's key international destination, London. There is no other international destination in Air Canada's world that has anything close to the demand of Canada to the UK, and specifically, London. Star Alliance doesn't offer a lot of good onward connections from London to places most Canadian's want to go. Besides, outside Africa, Air Canada flies to most of those destinations non-stop from Canada anyway. Few are traveling on AC for from Toronto to London to Copenhagen when there are Toronto to Copenhagen non stops available.

WestJet has a fleet of 140 or so aircraft feeding it's wide body network, as well as code share partners such as Delta and AA feeding key gateways.

Stunningly, a recent search on Kayak for dozens of London destined itineraries from various US cities. large and small, for travel in June 2016 showed WestJet often being the cheapest alternative. Dallas to London, for example, next June 15-29th, is $1,089 on WJA with connections under 3 hrs in Toronto. Air Canada's cheapest one stop from Dallas over Toronto is over $1,800. That's one heck of a premium for LHR, especially as Air Canada's Rouge will operate a parallel Toronto to London service to LGW with, presumably, matched fares to WJ. There are going to be all kinds of people who are going to get indigestion from the $800 difference in fares between the two airports.

One has to assume AA and Delta are complicit in WJ's USA to Canada to London pricing as it undercuts even their non-stop or one stop pricing. That tells me those two behemoth carriers, both of which are now consistently highly profitable, and not just on "Easter Sunday", are comfortable using low cost WJ as a proxy against AC. This is a strategic signal that has yet to be understood by the analyst community. It has enormous implications given AC's plan to divert US originating traffic over their hubs to Europe and Asia.

LGW has enough LCC connections that allow web savvy travelers, which, in this day and age, are pretty much everybody, to be able to buy a Canada to LGW ticket, (or US to Canada to LGW ticket), then buy a ticket on, say, EasyJet to their final destination and still save a boat load off Air Canada or even Air Canada Rouge's non-stop fares to the continent.

Most observers have seen the movie before and know precisely what's going to happen.

Demand is going to shift to LGW as a result of the pricing differential, at all fare levels, and ultimately, fares to LHR are going to implode, neutering a very key source of Air Canada's profitability during the critical 3Q.

The ability to buy to LGW, then add on an EasyJet or other LCC fare beyond is going to cause ALL Canada to Europe fares to see serious weakness next summer. It doesn't take a genius to figure out who is going to be impacted by this sea change. As is always the case in the airline business, it's death by a thousand scalpel cuts.

So, for all the hand wringing about WJ's TATL plans, there's very little risk involved. The numbers make it clear that WJ continues to enjoy a healthy cost advantage over Air Canada, even in the summer months.

There are those that constantly suggest that Air Canada has "fixed" their problem and that they are "competitive" with WJ on any and each of the individual subsets of flying, be it regional with Jazz, short haul with AC, Rouge, trans-border and international.

It's a nice story, but the numbers don't lie. Something in AC's world is not competitive and causing that casm to be 14.08 cents over a consolidated 1,634 mile asl, dramatically higher than WJ's, even though the claim is that in each sector, they are competitive.

As has been the case since WestJet's launch on Feb 29th, 1996 with a couple of old Southwest 737-200's, that casm gap is going to be mercilessly exploited.

It will be fun to watch this all unfold in 2016. You'll see a fender bender in early Aug when 2Q numbers are announced, but the head on collision will be hard to ignore when 3Q numbers, traditionally underwritten by windfall TATL numbers fueled by 17 years of having London and most of Europe all to itself from everything outside a few Canadian cities are unveiled in early November 2016.

Just keepin' it real.....

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Re: Updated logo and 767 preview

#139 Post by TheStig » Mon Nov 30, 2015 12:30 pm

Thanks for keeping it real. I hope Easyjet is going add enough capacity to keep up with all the connecting traffic from Texas that is going to codeshare on AA to YVR/YYC/YYZ thanks to these low fares... You really think Westjet is going to 'stimulate' the busiest market in Canadian aviation? Air Canada is going to have all of its Boeing 777's updated to the Dreamliner standard (including the HD's) by next summer and offer 787 service out of YVR (x2 daily) and YYC while BA is bringing their A380 to YVR.

Air Canada does a fine job filling its aircraft and it's nice to see they're commanding a sizeable premium. I think the 2016 Q2-Q3 results will demonstrate that the only thing WJ was able to achieve with their overseas operation was industry low yields.

https://www.youtube.com/watch?v=X8u1jvjk_3w
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Re: Updated logo and 767 preview

#140 Post by rudder » Mon Nov 30, 2015 3:00 pm

WJ add a couple of used 767's and some believe that they will meaningfully impact the transatlantic marketplace? Priceless. Talk about hubris.

Take a look at airline share prices and you will see where the bets for success are being placed and where they are not.
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Re: Updated logo and 767 preview

#141 Post by Squid » Mon Nov 30, 2015 7:58 pm

Thinking transat will be the one feeling the pinch first.
Last I checked - there isn't much support for many share prices these days in any industry.
Gotta give em a chance to grow the business. Pretty stable successful growth so far - no argument there.
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Re: Updated logo and 767 preview

#142 Post by Realitychex » Mon Nov 30, 2015 10:11 pm

rudder wrote:WJ add a couple of used 767's and some believe that they will meaningfully impact the transatlantic marketplace? Priceless. Talk about hubris.

Take a look at airline share prices and you will see where the bets for success are being placed and where they are not.
Recall that in 1996, no one figured WJ, with a handful of 25 year old 737's and a very modest schedule, would impact the western Canadian marketplace either.

Lo and behold, a certain Montreal based airline operating margins in Western Canada dropped from +7% to -23%, according to documents management presented to their own Board of Directors in 1998.

History often has a nasty habit of repeating itself....

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Re: Updated logo and 767 preview

#143 Post by brooks » Tue Dec 01, 2015 12:44 am

AC can add all the capacity they want and try to flood the market. When oil spikes back up watch the revenue tank and CASM sky rocket. WJ's costs are rising but nowhere near AC levels. AC can have fuel efficient 787 but if you don't own them that makes it hard to raise revenue. WJ bought 4 767s for a super cheap in exchange (we presume) for 787 orders and when they come online you can bet WJ will target more AC destinations. I call that eating someone's lunch or at least casually snacking on it. As for Transat the only low cost to them is renting Enerjet to do their work I don't know if they pose a problem really for AC or WJ.
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Re: Updated logo and 767 preview

#144 Post by plhought » Tue Dec 01, 2015 2:31 am

brooks wrote:...WJ bought 4 767s for a super cheap in exchange (we presume) for 787 orders...
The 767's arn't 'bought' - they are leased - and it wasn't "super cheap". Take a look at the plate in the cockpit next time. Do I think Boeing is courting them for 787 orders though? Of course...but WJ isn't going to bite for quite a while - provided everything goes good.

People are forgetting at WJ that the '67 project is really an experiment. Nothing is set in stone. Don't fall for what the koolaid-rah-rah are telling you. At the moment this isn't a concerted effort to go toe-to-toe with AC on international markets. That simply isn't possible (as mentioned) with a few 767s. It really is a gauged experimental expansion abroad to get all the metrics and costs in order/accounted for for a possible permanent expansion.

Don't forget the ribbin' the "westjetters" will get abroad -


(replace Easyjet with WJ for a laugh)
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Re: Updated logo and 767 preview

#145 Post by aerobod » Tue Dec 01, 2015 8:41 am

plhought wrote: The 767's arn't 'bought' - they are leased

Don't forget the ribbin' the "westjetters" will get abroad
Initially the plan was to lease them, but as Gregg announced in the Q2 analysts call, they are now being purchased.

We are counting on the "ribbin'", we never take ourselves seriously.
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Re: Updated logo and 767 preview

#146 Post by brooks » Tue Dec 01, 2015 10:50 am

plhought You should get your facts straight before blabbing on. I could care less about your easyjet video. Last I checked they fly an Airbus 320 for cheap around Europe. Woopee.

Fact the 767 were bought for a good reason and if you believe it is an experiment or proving to justify going down the wide body road you've been drinking too much KoolAid. AC went into our market and we needed to fire back and we couldn't keep leasing Thomas Cook.
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Re: Updated logo and 767 preview

#147 Post by rudder » Tue Dec 01, 2015 11:21 am

brooks wrote: AC went into our market and we needed to fire back and we couldn't keep leasing Thomas Cook.
Wow. Our market?

AC has a history that dates back to the 1930's. Calling anything "our market" represents a little bit of selective and very short term analysis.

I applaud WJ and the evolution of their product and their company. But the suggestion by one poster that a WJ presence on the North Atlantic - the largest international aviation market on the planet - would be a 'game changer' was farcical.

Just keep doing what you do and be humble, unlike some of your cheerleaders that are trying to pump up a depressed stock price.
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Re: Updated logo and 767 preview

#148 Post by brooks » Tue Dec 01, 2015 12:21 pm

Maybe not "our market" if that hurts your feelings but it was a market that only we were serving until AC decided to put a 67 on it. 90 seat 700s was not really a solution to the problem.
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Re: Updated logo and 767 preview

#149 Post by Realitychex » Tue Dec 01, 2015 2:36 pm

rudder wrote:
brooks wrote: AC went into our market and we needed to fire back and we couldn't keep leasing Thomas Cook.
Wow. Our market?

AC has a history that dates back to the 1930's. Calling anything "our market" represents a little bit of selective and very short term analysis.

I applaud WJ and the evolution of their product and their company. But the suggestion by one poster that a WJ presence on the North Atlantic - the largest international aviation market on the planet - would be a 'game changer' was farcical.

Just keep doing what you do and be humble, unlike some of your cheerleaders that are trying to pump up a depressed stock price.
In 1996, no one thought one flight a day from Calgary to Vancouver, or from Edmonton to Winnipeg would result in the implosion of yields in Western Canada, and the first of many near death experiences for the incumbent carriers, but it most certainly did.

Even in pre-internet days, customers became very savvy and found all kinds of fare work arounds that ultimately resulted in fares falling on both routes WJ operated and those they didn't on a n/s basis. For example, the incumbents found it impossible to hold high fares on YYC-YWG when YEG-YWG walk up was going for $99. YYC -YWG was the higher yield market, but it too collapsed.

No one figured WJ operating east of Thunder Bay would amount to much, but it did, big time. Same with WJ going trans-border or into Mexico and the Caribbean.

WJ isn't going to "game change" the North Atlantic market as a whole in the summer of 2016, but you can be certain it's going to dramatically change the profitability of the incumbent airlines operating between Canada and Europe.

It's a market that pales in comparison to any other long haul market and it is squarely in WJ's gunsights. Compare TATL traffic to any other international traffic from North America.

https://www.youtube.com/watch?v=yx7_yzypm5w

Customers traveling to and from Canada are going to very quickly figure out work arounds to avoid the incumbents high fares to and from Canada. The cheap fare mindset is utterly embedded in Brits and Europeans mindset. It isn't going away any time soon.

Why pay AC $1,235 for n/s YYZ-AMS on a 2 week trip beginning peak July 20th, when you can fly Rouge or WJ to LGW and connect to AMS on British Airways for $122? That's a $214 saving per person. That's a pretty big nut for a family of four on their summer vacay.

What's the solution to stop the leakage? Cut YYZ-AMS non stop fares. See how it works? Now take every other market in Europe and do the same. Any guesses on what happens to AC's 17% 3Q 2015 operating margin in Q3 2016 when TATL low end fares are cut 10 to 15% and premium fares by 25 to 30% to "remain competitive"? It isn't going to be pretty and I'll bet it could end up looking a lot like what happened to the incumbents profitability decline in the Western Canadian market when the same thing occurred beginning on Feb 29th, 1996.

As noted in a previous post, in spite of vehement claims to the contrary, a very significant cost gap continues to exist between WJ and AC. Costs are all costs, not just DoC's. In a commodity business, I'll bet on the guy with the lowest consolidated, fully allocated costs every time.

Don't be side tracked by the entry level fares. They are red herrings. Those fares are the least painful for incumbents to match.

It's the higher yielding, last minute fares that are going to profusely tumble, as has been the case everywhere WJ has gone. That's where the big hurt is going to come. It's way too early to see what's happening on summer TATL now, but by early March 2016, the incumbents sphincters are going to start to tighten and by late April, alarm bells are going to start ringing.

The non Star US mega carriers, both of which are roughly 4 times the size of Air Canada, are not happy with Air Canada doing an "Emirates" on them and poaching US originating passengers to Europe over AC hubs. It would appear their response is to have engaged WJ as a proxy in a fairly obvious attempt to discipline this sort of activity.

WJ has the cheapest fares from countless US destinations to Europe next summer, destinations that require code share flights on US iron. SLC to London? The cheapest is WJ, far and away. Same on MSP-London. PIT- London and many, many more, all requiring codeshare from either AA or DL. Will many take up the offers? No. But that's not the point. It's the message that's important, and given the pricing, the message is squarely aimed at the groinal area and is as follows: "You continue with this concept and this is only the beginning".

For neophytes, this kind of signalling is common in the industry. Longtimers will recall Canadian generating a fare code in the mid 90's that began "FUAC".

WJ has never done anything to satisfy short term urges or to pump the stock. It's not in their DNA, and won't be for as least as long as CB is on the Board.

So enjoy dream land my friend and keep lapping up the sunshine that is being pumped.

Even assuming cheap fuel continues next summer, and let's be clear, it is cheap fuel that is causing the windfall profits at airlines that were barely able to break-even with $100 per bbl oil, not any particular genius of airline management, the changes that are going to occur on the Canada to Europe TATL market next summer are going to be huge.

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Re: Updated logo and 767 preview

#150 Post by complexintentions » Wed Dec 02, 2015 12:28 am

There are massive holes and extremely large assumptions made in your needlessly long ramblings. I don't have a horse in this race, I just am amused by the hyperbole. Perhaps my favourite tidbit is this:
Demand is going to shift to LGW as a result of the pricing differential, at all fare levels, and ultimately, fares to LHR are going to implode, neutering a very key source of Air Canada's profitability during the critical 3Q.
Yes, Heathrow will become cheap-as-chips to fly to. :lol: Well, maybe not.

The comparison to 1996 is asinine. There was a unique moment in aviation history where WestJet was able to exploit the turmoil of the Canadian/AC merger and founded an upstart company with a different approach - and found great success doing so. Fast forward 20 years and WestJet doesn't resemble its former self whatsoever, nor does Air Canada. For history to repeat itself, the environment has to have at least SOME factors in common with what allowed those events to occur previously. Timing was on your side in 1996. It is not now. You may have London "in your sights" but you're bringing a knife to a gun fight. Wishful thinking is not analysis.

Do I wish ill on the B767 venture? Not at all. But it's hardly a slam-dunk, in fact will be a very hard nut to crack. If you only dip your toes in the water you'll probably get them bitten off. If you go more all-in there's massive financial exposure - at a time when the home base economy is imploding, which is spreading elsewhere in Canada. Neither scenario gives a high probability of success. I don't care either way, but that's MY dispassionate opinion.
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