ONEX plans

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altiplano
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Re: ONEX plans

Post by altiplano »

No way this is in response to AC. The Swoop market and model is completely different than AC.

C3 went bankrupt because they ran out of money, had debts due, and nobody would lend them anymore.
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cloak
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Re: ONEX plans

Post by cloak »

altiplano wrote: Wed Oct 23, 2019 10:59 am C3 went bankrupt because they ran out of money, had debts due, and nobody would lend them anymore.
Turns out denial is not just a river in Egypt! Just because you keep telling yourself that, it don't make it the truth! Air Canada and its Tango were absolutely responsible for demise of Canada 3000, and many others....all it takes is a quick search in case one was too young to remember 18 years ago.

•FROM: Nov. 9, 2001: Air Canada's 'Tango' service barely avoids cease-and-desist order
Late last year, the federal Competition Bureau was about to issue a cease-and-desist order that would have shut down Tango, but the ruling was preempted by the collapse of Canada 3000 in November.

Source: https://www.cbc.ca/news/business/air-ca ... 1-1.311489

Interestingly, combined with massive losses at Air Canada, I wonder why!
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altiplano
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Re: ONEX plans

Post by altiplano »

Record losses during a recession and after September 11 you say?

No kidding?

How many airlines went bankrupt after that era?

Cease and desist? Whatever. Not much credibility or story in that article. Didn't happen anyway.
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cloak
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Re: ONEX plans

Post by cloak »

altiplano wrote: Wed Oct 23, 2019 3:32 pm Cease and desist? Whatever. Not much credibility or story in that article. Didn't happen anyway.
Wow, "didn't happen"?! Never thought I'd hear that so soon! That is exactly how they change history!!
At any rate, don't know what grade you were in at the time, but been there, done that, got the t-shirt!

In fact, for the illumination of the younger ones, I'll tell a story called: Air Canada.

Air Canada used to be a crown corporation up until 1988, and for those who don't know what that means, it means it got to do what it wanted while the taxpayers paid for it. In 1988 Air Canada became a "private" corporation and between then and 2001, in the space of 13 years, Air Canada managed to accrue as many BILLIONS (read BILLIONS) in debt, in other words 20% of Argentina's national debt that was on the brink of bankruptcy then. That astronomical debt was accumulated in the process of undercutting competition out of business which was(is) basically Air Canada's corporate strategy. It was a surprise, and in much gratitude to bail-outs of another Liberal regime that was in power then that Air Canada survived. Please don't insult our intelligence by some revisionist re-written history!! If you want to change history, change something more distant, not something many would remember.
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altiplano
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Re: ONEX plans

Post by altiplano »

The article itself says the cease and desist didn't happen with the limited information it speculates.

Learn to read your own article.

And drop the ad hominem bullshit if you really have an argument.

Not to mention revisionist!!! Your own diatribe is reek of inaccuracy.
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Fanblade
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Re: ONEX plans

Post by Fanblade »

cloak wrote: Wed Oct 23, 2019 5:48 pm
altiplano wrote: Wed Oct 23, 2019 3:32 pm Cease and desist? Whatever. Not much credibility or story in that article. Didn't happen anyway.
Wow, "didn't happen"?! Never thought I'd hear that so soon! That is exactly how they change history!!
At any rate, don't know what grade you were in at the time, but been there, done that, got the t-shirt!

In fact, for the illumination of the younger ones, I'll tell a story called: Air Canada.

Air Canada used to be a crown corporation up until 1988, and for those who don't know what that means, it means it got to do what it wanted while the taxpayers paid for it. In 1988 Air Canada became a "private" corporation and between then and 2001, in the space of 13 years, Air Canada managed to accrue as many BILLIONS (read BILLIONS) in debt, in other words 20% of Argentina's national debt that was on the brink of bankruptcy then. That astronomical debt was accumulated in the process of undercutting competition out of business which was(is) basically Air Canada's corporate strategy. It was a surprise, and in much gratitude to bail-outs of another Liberal regime that was in power then that Air Canada survived. Please don't insult our intelligence by some revisionist re-written history!! If you want to change history, change something more distant, not something many would remember.
Your views are myopic.

Your forgetting deregulation and government policy with respect to airline failures during deregulation as a major factor. Not a single airline entity that existed prior to deregulation, exists today with the exception of those that went through bankruptcy. Regulation led to fat, uncompetitive companies who were lunch meat for lean upstarts. Government policy of not allowing airlines to fail post deregulation did more harm than good.

To give younger viewers a little history.

Prior to deregulation Canada had. Air Canada, CP Air, Pacific Western, Wardair, Nord Air, Eastern Provincial Airways. With the exception of PWA, all fat, debt ridden companies, not competing with each other in any meaningful way.

Post deregulation.

The corporations believed the way to profitability was through consolidation. It failed and left a debt ridden train wreck. CP bought EPA and Nordair. The combined debt load and the competing deregulated environment made them unprofitable. PWA stepped in to pick up CP Air in a highly leveraged purchase and renamed themselves Canadian.

Wardair was then on the ropes.

The Canadian government with a policy of not letting airlines fail stepped in to force CP to buy Wardair. ( Threatened to allow Wardair into Asia).

Then the early 80’ recession hit. This left Canadian and its high debt load through multiple acquisitions in a precarious position for a little more than a decade before failure.

Air Canada had not been acquiring companies through this period but neither were they making money.

Then Westjet. The first successful post deregulation Airline in Canada. Both Canadian and Air Canada began to bleed hard. Particularly Canadian as WJ started in their back yard.

Then Canadian was on the brink. The Canadian government once again stepped into the situation and forced AC to take on Canadian and its debt rather than let it fail. Once again the government used routes, and access to them, as a way to make AC comply.

So by 2001 AC had on its books the combined debt of the ENTIRE group of pre deregulation airlines. AC was so fat it could barely waddle as a result.

Numerous complaints to the competition bureau then ensued about AC. You see the competition rules of the day stated you could not sell a product below cost. Since AC was so fat even matching the competitions pricing drew competition bureau complaints.

In response AC started Tango ( Read desperation here) to compete on price matching with C3000 and WJ. The competition bureau never got to rule on if this was a legal workaround of the competition rules because the government modernized the rules first. It is entirely possible that the the competition bureau, using the rules of the day, may have found AC was in contravention of competition rules by using Tango to price match with WJ and C3000. It might even be probable. The fact is the law was modernized to enhance competition. Not allowing price matching would stifle it.

Then 911.

Canada 3000 went bankrupt.

The government finally stepped away from their policy of not letting airlines fail and finally brought in real competition rules.

Then SARS which was Toronto centred, WJ was still out west, was the final blow for AC.

AC went bankrupt and was washed of the entire pre deregulation debt load of the ENTIRE pre deregulation industry.

Unfortunately AC was taken into bankruptcy by a hedgefund that wasn’t really interested in fixing AC systemic problems. They just wanted to drop debt and part it off in pieces.

It was not until 2009, 21 years post deregulation, that AC finally had leadership that would take them from a pre deregulation fat organization to a company that could compete in a post deregulation environment.
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cloak
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Re: ONEX plans

Post by cloak »

It's very admirable for Air Canada apologists to come out and try to defend it, and why wouldn't they? They work there and their livelihood depends on it. But this is the example of a 300 pound 7 foot beast of man cage fighting an agile young lean fighter who can really move and land some hits, but then the beast lands a heavy hook that sends the guy flying against the cage which cracks his skull and kills him instantly. Then the beast's kids (let's assume he has some!) turn around and claim that it was the metal cage that killed the poor young fighter!!

It happened only 18 years ago. Air Canada started Tango, now that was the real airline within an airline because it wasn't even a real airline with separate fleet, but some seats on the same flight that were strategically priced to match Canada 3000's schedule and undercut its price. That was the blow that knocked out Canada 3000 which was just gaining a foot hold in the market and Air Canada, having just defeated and assimilated Canadian Airlines, didn't want it to grow to a sizeable competition. So it started Tango for that purpose. Canada 3000 ceased operations on 9th of November; the very next day on 10th of November Competition Bureau came out with a reply to Canada 3000's earlier complaint about Air Canada's Tango in the market, saying that it had its Cease & Desist Order, but it no longer served any purpose because C3 was no more.

And that wasn't the first or last airline Air Canada has bankrupted. We can mention Roots Air or City Express, depending on how far back we want to go. Understandably this must be a shock to young aces working at Air Canada, but let's not change history. And granted a Killer Whale is a great food source for the fish around it, and yes it has admirers too, but it don't make it a benevolent creature! The end!
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Realitychex
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Re: ONEX plans

Post by Realitychex »

altiplano wrote: Wed Oct 23, 2019 6:00 am But realitychex said airline within an airline NEVER works.
The airline within an airline concept, operated in the historically traditional manner, has never really worked.

They simply cannibalize the mothership’s business, overlapping routes and watering down the brand, which drives the ability to maintain a yield premium.

No one will be confusing Swoop from WJ’s mainline product anytime soon, and the route network, as far as I can see, is 100% mutually exclusive to mainline ops. It doesn’t touch hubs. There’s no mainline connectivity, period. Last I heard, even WJ mainline employees can’t fly stand by on Swoop. It’s a completely different beast.

As pointed out in a RJ Report a few years back, if you’re going to undertake this sort of strategy, defending the backdoor against inevitable incursions, this is the way I’d do it, for as long as the market allowed.

Interspersing the so called ULCC brand on top of key strategic routes, including, depending on seasonality, on the #1 O&D market in Canada is probably not something I would do, especially if there was no tactical need to do so. As was learned on YVR-LAX a few years back, road warriors, not all of whom sit up front, aren't going to be happy with their secretaries / corporate travel department inadvertently booking them in coach on a Rouge YVR-YYZ at 8:30am on a business day. One experience likes that immediately undoes years of hard earned loyalty.

8)
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mbav8r
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Re: ONEX plans

Post by mbav8r »

Fanblade wrote: Thu Oct 24, 2019 7:01 am
cloak wrote: Wed Oct 23, 2019 5:48 pm
altiplano wrote: Wed Oct 23, 2019 3:32 pm Cease and desist? Whatever. Not much credibility or story in that article. Didn't happen anyway.
Wow, "didn't happen"?! Never thought I'd hear that so soon! That is exactly how they change history!!
At any rate, don't know what grade you were in at the time, but been there, done that, got the t-shirt!

In fact, for the illumination of the younger ones, I'll tell a story called: Air Canada.

Air Canada used to be a crown corporation up until 1988, and for those who don't know what that means, it means it got to do what it wanted while the taxpayers paid for it. In 1988 Air Canada became a "private" corporation and between then and 2001, in the space of 13 years, Air Canada managed to accrue as many BILLIONS (read BILLIONS) in debt, in other words 20% of Argentina's national debt that was on the brink of bankruptcy then. That astronomical debt was accumulated in the process of undercutting competition out of business which was(is) basically Air Canada's corporate strategy. It was a surprise, and in much gratitude to bail-outs of another Liberal regime that was in power then that Air Canada survived. Please don't insult our intelligence by some revisionist re-written history!! If you want to change history, change something more distant, not something many would remember.
Your views are myopic.

Your forgetting deregulation and government policy with respect to airline failures during deregulation as a major factor. Not a single airline entity that existed prior to deregulation, exists today with the exception of those that went through bankruptcy. Regulation led to fat, uncompetitive companies who were lunch meat for lean upstarts. Government policy of not allowing airlines to fail post deregulation did more harm than good.

To give younger viewers a little history.

Prior to deregulation Canada had. Air Canada, CP Air, Pacific Western, Wardair, Nord Air, Eastern Provincial Airways. With the exception of PWA, all fat, debt ridden companies, not competing with each other in any meaningful way.

Post deregulation.

The corporations believed the way to profitability was through consolidation. It failed and left a debt ridden train wreck. CP bought EPA and Nordair. The combined debt load and the competing deregulated environment made them unprofitable. PWA stepped in to pick up CP Air in a highly leveraged purchase and renamed themselves Canadian.

Wardair was then on the ropes.

The Canadian government with a policy of not letting airlines fail stepped in to force CP to buy Wardair. ( Threatened to allow Wardair into Asia).

Then the early 80’ recession hit. This left Canadian and its high debt load through multiple acquisitions in a precarious position for a little more than a decade before failure.

Air Canada had not been acquiring companies through this period but neither were they making money.

Then Westjet. The first successful post deregulation Airline in Canada. Both Canadian and Air Canada began to bleed hard. Particularly Canadian as WJ started in their back yard.

Then Canadian was on the brink. The Canadian government once again stepped into the situation and forced AC to take on Canadian and its debt rather than let it fail. Once again the government used routes, and access to them, as a way to make AC comply.

So by 2001 AC had on its books the combined debt of the ENTIRE group of pre deregulation airlines. AC was so fat it could barely waddle as a result.

Numerous complaints to the competition bureau then ensued about AC. You see the competition rules of the day stated you could not sell a product below cost. Since AC was so fat even matching the competitions pricing drew competition bureau complaints.

In response AC started Tango ( Read desperation here) to compete on price matching with C3000 and WJ. The competition bureau never got to rule on if this was a legal workaround of the competition rules because the government modernized the rules first. It is entirely possible that the the competition bureau, using the rules of the day, may have found AC was in contravention of competition rules by using Tango to price match with WJ and C3000. It might even be probable. The fact is the law was modernized to enhance competition. Not allowing price matching would stifle it.

Then 911.

Canada 3000 went bankrupt.

The government finally stepped away from their policy of not letting airlines fail and finally brought in real competition rules.

Then SARS which was Toronto centred, WJ was still out west, was the final blow for AC.

AC went bankrupt and was washed of the entire pre deregulation debt load of the ENTIRE pre deregulation industry.

Unfortunately AC was taken into bankruptcy by a hedgefund that wasn’t really interested in fixing AC systemic problems. They just wanted to drop debt and part it off in pieces.

It was not until 2009, 21 years post deregulation, that AC finally had leadership that would take them from a pre deregulation fat organization to a company that could compete in a post deregulation environment.
Nice recap, there will be some that deny these as facts but most rational people will get it!
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mbav8r
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Re: ONEX plans

Post by mbav8r »

Realitychex wrote: Thu Oct 24, 2019 9:36 am
altiplano wrote: Wed Oct 23, 2019 6:00 am But realitychex said airline within an airline NEVER works.
The airline within an airline concept, operated in the historically traditional manner, has never really worked.

They simply cannibalize the mothership’s business, overlapping routes and watering down the brand, which drives the ability to maintain a yield premium.

No one will be confusing Swoop from WJ’s mainline product anytime soon, and the route network, as far as I can see, is 100% mutually exclusive to mainline ops. It doesn’t touch hubs. There’s no mainline connectivity, period. Last I heard, even WJ mainline employees can’t fly stand by on Swoop. It’s a completely different beast.

As pointed out in a RJ Report a few years back, if you’re going to undertake this sort of strategy, defending the backdoor against inevitable incursions, this is the way I’d do it, for as long as the market allowed.

Interspersing the so called ULCC brand on top of key strategic routes, including, depending on seasonality, on the #1 O&D market in Canada is probably not something I would do, especially if there was no tactical need to do so. As was learned on YVR-LAX a few years back, road warriors, not all of whom sit up front, aren't going to be happy with their secretaries / corporate travel department inadvertently booking them in coach on a Rouge YVR-YYZ at 8:30am on a business day. One experience likes that immediately undoes years of hard earned loyalty.

8)
Cloak, is it ok for WJ to protect it’s backdoor but not AC, the structuring may be different but the strategy is not?
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cloak
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Re: ONEX plans

Post by cloak »

mbav8r wrote: Thu Oct 24, 2019 9:51 am Cloak, is it ok for WJ to protect it’s backdoor but not AC, the structuring may be different but the strategy is not?
Of course it's ok, but the way Air Canada was doing it, which was, on its normal flights that matched Canada 3000's schedule, sell a few seats cheaper than Canada 3000, according to Competition Bureau, was illegal. That's why they had the Cease & Desist order. What it's doing now by applying some "Rouge", is more legit! :D
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Last edited by cloak on Thu Oct 24, 2019 10:10 am, edited 1 time in total.
cloak
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Re: ONEX plans

Post by cloak »

Realitychex wrote: Thu Oct 24, 2019 9:36 am ...
No one will be confusing Swoop from WJ’s mainline product anytime soon, and the route network, as far as I can see, is 100% mutually exclusive to mainline ops. It doesn’t touch hubs. There’s no mainline connectivity, period.
As pointed out in a RJ Report a few years back, if you’re going to undertake this sort of strategy, defending the backdoor against inevitable incursions, this is the way I’d do it, for as long as the market allowed...
Good points, and agreed that getting the surprise flight on Rouge, would be akin to discovering a compact size car on the day of pick-up instead of the full size that one thought had rented! Not cool.

However, corporations serving different segments of the market by different companies has been around in other industries, e.g Loblaws and NOFRILLS. If one wants connections and upgrades, etc. buy WestJet. If one seeks lowest unbundled price, buy Swoop.
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altiplano
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Re: ONEX plans

Post by altiplano »

Realitychex wrote: Thu Oct 24, 2019 9:36 am
altiplano wrote: Wed Oct 23, 2019 6:00 am But realitychex said airline within an airline NEVER works.
The airline within an airline concept, operated in the historically traditional manner, has never really worked.

They simply cannibalize the mothership’s business, overlapping routes and watering down the brand, which drives the ability to maintain a yield premium.

No one will be confusing Swoop from WJ’s mainline product anytime soon, and the route network, as far as I can see, is 100% mutually exclusive to mainline ops. It doesn’t touch hubs. There’s no mainline connectivity, period. Last I heard, even WJ mainline employees can’t fly stand by on Swoop. It’s a completely different beast.

As pointed out in a RJ Report a few years back, if you’re going to undertake this sort of strategy, defending the backdoor against inevitable incursions, this is the way I’d do it, for as long as the market allowed.

Interspersing the so called ULCC brand on top of key strategic routes, including, depending on seasonality, on the #1 O&D market in Canada is probably not something I would do, especially if there was no tactical need to do so. As was learned on YVR-LAX a few years back, road warriors, not all of whom sit up front, aren't going to be happy with their secretaries / corporate travel department inadvertently booking them in coach on a Rouge YVR-YYZ at 8:30am on a business day. One experience likes that immediately undoes years of hard earned loyalty.

8)
Of course... Now you qualify it... so, if you say so, I guess?

Glad to see you posting though.
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Fanblade
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Re: ONEX plans

Post by Fanblade »

cloak wrote: Thu Oct 24, 2019 9:59 am
mbav8r wrote: Thu Oct 24, 2019 9:51 am Cloak, is it ok for WJ to protect it’s backdoor but not AC, the structuring may be different but the strategy is not?
Of course it's ok, but the way Air Canada was doing it, which was, on its normal flights that matched Canada 3000's schedule, sell a few seats cheaper than Canada 3000, according to Competition Bureau, was illegal. That's why they had the Cease & Desist order. What it's doing now by applying some "Rouge", is more legit! :D
Your making up your history.

Air Canada was selling seats on normal flights and the competition bureau was expected to rule AC can not price match the competition if it is below their cost. This is the cease and desist order you speak of which never actually materialized.

But that was not about Tango. Tango was created because of this expected ruling.

Tango was a fleet of separate aircraft within the AC fleet. It was not a fare level within normal flights as you claim.

The competition bureau never ruled on Tango as the rules were modernized first.

Some real fact for you.

The 11 days that Tango and C3000 existed together did not kill C3000.

911/ sudden cash flow reduction/sudden lack of access to liquidity/ a recent leveraged merger with a Royal Airlines/ killed C3000. It killed a lot of companies. Not just airlines.

Tango started Nov 1 2001 and eventually had a fleet of 320/737 aircraft.

https://en.m.wikipedia.org/wiki/Air_Canada_Tango

C3000 failed Nov 11 2001.

https://en.m.wikipedia.org/wiki/Canada_3000
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Realitychex
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Re: ONEX plans

Post by Realitychex »

I tend to generally agree with Fanblade's assessment of C3000's collapse.

C3000 were well on their way to failure long before Tango made an appearance in the market or the impact of 9/11.

C3000 tried to leap frog what WJ had built slowly, steadily and organically since late Feb 1996 by cobbling together C3000, Royal and, Canjet 1.0 , (as I recall?). It failed miserably.

People forget that WJ was profitable in both 3Q 2001 and 4Q 2001, with higher profits in 2001 than in the previous year, with a fleet of 27 aircraft. C3000 wasn't able to manage through that event. They bit off way more than they could chew.

Aviation insiders were always bemused by claims of record sales at C3000 prior to the collapse. By cobbling together the capacity and expenses of the various airlines they acquired, of course they had record sales! They needed them to keep up with the record expenses!

That same phenomena occurs today.

That being said, the appearance of Tango was not going to make C3000's life any easier.

Somewhere deep in my files, I have a copy of the late John Leckie's long letter to the C3000 BoD explaining what happened, supplied to me by a Toronto investment banker. It's a great read. That being said, I have great respect for what he did as an athlete in his younger days and his exceedingly generous support of Shawnigan Lake school so it won't be me who makes that letter and related docs public nearly 20 years after the fact. What would be the point?

8)
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altiplano
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Re: ONEX plans

Post by altiplano »

Careful with the facts everyone!

Are you going to put up with those pesky facts cloak? Better "enlighten" us some more...
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cloak
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Re: ONEX plans

Post by cloak »

Now you're behaving like a kid who's been told for the first time his parents had sex! Easy Junior!
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altiplano
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Re: ONEX plans

Post by altiplano »

What are you talking about?

Get real, get a clue, or at least an accurate position!

Junior? Based on your behavior and comments I'm guessing that I'm provably 25 years older than you... but since you're a re-tard... I'm probably closer to 5 years older...

So if that's all you got...
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cloak
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Re: ONEX plans

Post by cloak »

You know when kids first find out.....ah I hate it when I have to explain my jokes, especially to old wise men! :goodman:
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altiplano
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Re: ONEX plans

Post by altiplano »

Except you're the one in denial...
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