equipment bid

[Brick Head]

Guys piggy is right.

If oil keeps going up, fares will continue to rise, As fares rise, less people fly. The player with the lower costs has more room to maneuver, still keep butts in seats and still eek out a profit. The player with the higher costs either matches fares it can't make money at, or increases fares and loose market share.

This scenario basically plays out anytime people stop their flying habits for whatever reason. Price increases or a demand drop.

With that said.

Piggy.

In 2002 a gapping hole was left in the Market by Canada 3000.

In 2002 AC did not have the aircraft versatility it has today. Matching demand with the correct gage aircraft will be huge in this high fuel price environment. The Burrito is producing a CASM impressively close to a 319. AC can actually go smaller gaged without increasing CASM by very much.

For example at the end of April I was traveling YYC-YYZ. AC had down gaged everything all day to the Burrito. It was a slow time of year and it was packed. Gave up and went to WJ. The flight I got on had a Burrito load on it. (are you impressed with my massive cross section of analysis? ) Yeah I know they probably still made money.

My point is simply that right sizing a route will become more important as fuel becomes a larger and larger portion of CASM. It is probably one of the only advantages AC has over WJ.

I expect AC to do much better against WJ this time around. I also expect that WJ, will show restraint in capacity increases if need be. They have done it before.

I don't think the domestic market is AC's biggest issue at the moment.

[rudder]

Prediction - no resumption of hiring in Sept '08. As for hiring in '09...........$140 oil according to US based soothsayers.

No layoffs but no retirement/GDIIP replacements either.

[Sage]

I don't get the burrito reference though. Burritos are Mexican and the Embraer is Brazilian.

There was a report that I read recently that said that with the forecasted downturn, every airline especially the LCCs will be hit hard. With the LCCs being hit the hardest because of the already very slim profit margins. It did also say that Southwest will fare the best of the LCCs because of their longterm fuel hedge.

[Brick Head]

[quote="Sage"]I don't get the burrito reference though. Burritos are Mexican and the Embraer is Brazilian.
quote]

You apparently never saw the Slogan. "The burrito goes to Habana" put out by employee communications.

Slogin didn't last long but I thought it was funny enough to repeat.....and repeat......

[Norfolk]

Sage, you fly a burrito.....LOL From RJ to RJ Ha ha ha ha haahahahahha MEN....

[Sage]

Sage, you fly a burrito.....LOL From RJ to RJ Ha ha ha ha haahahahahha MEN....

heh heh heh. Not my choice but the schedule is good. This is a bigger and better RJ now though. Better environmental system, engines, etc. I don't have to wait 35 minutes anymore to climb to FL300 then cruise at mach .70 and I don't have to sweat it out in the back when I'm deadheading. I don't have to clean the back when the pax are off either like some other companies. I'd rather a burrito than a skidoo.

[piggy]

Guys piggy is right.

If oil keeps going up, fares will continue to rise, As fares rise, less people fly. The player with the lower costs has more room to maneuver, still keep butts in seats and still eek out a profit. The player with the higher costs either matches fares it can't make money at, or increases fares and loose market share.

This scenario basically plays out anytime people stop their flying habits for whatever reason. Price increases or a demand drop.

With that said.

Piggy.

In 2002 a gapping hole was left in the Market by Canada 3000.

In 2002 AC did not have the aircraft versatility it has today. Matching demand with the correct gage aircraft will be huge in this high fuel price environment. The Burrito is producing a CASM impressively close to a 319. AC can actually go smaller gaged without increasing CASM by very much.

For example at the end of April I was traveling YYC-YYZ. AC had down gaged everything all day to the Burrito. It was a slow time of year and it was packed. Gave up and went to WJ. The flight I got on had a Burrito load on it. (are you impressed with my massive cross section of analysis? ) Yeah I know they probably still made money.

My point is simply that right sizing a route will become more important as fuel becomes a larger and larger portion of CASM. It is probably one of the only advantages AC has over WJ.

I expect AC to do much better against WJ this time around. I also expect that WJ, will show restraint in capacity increases if need be. They have done it before.

I don't think the domestic market is AC's biggest issue at the moment.

MAny of your points are correct. I believe only in what professional money managers believe. That includes airline analysts, fund managers, etc. I do not have expertise in these things, although I am learning a lot from them. Most guys who deal with money hate airline stock. It basically never makes money if one looks at history. A growth stock such as WJ is expected that the company will grow. A so called value stock such as AC is not expected to grow significantly so its price is much lower.
The simple fact is that jet fuel is rising significantly due to high oil price and the higher cost of making jet fuel from oil. This is going to kill the weak airlines out there. As i said before the blood bath is starting in US. What happened recently??? American is cutting flts, etc, due to the high cost nvironment-this is just the beginning. AC load factor may be high, but the revenue will stay the same as they cannot raise intl prices as its too competitive and domestic competition (WJ) will prevent sig. price increases. AC costs are way higher than WJ and if ticket price upside is limited, what do they do?? Well dont go out and buy AC stock. anytime soon. You are correct that highest possible loadfactor will be important, analysts are saying they will try to have every a/c full. That only goes so far. I would put my money on WJ stock before Ac right now. However, I dont own either at the moment.

[tonysoprano]

And so another downcycle is approaching. I've seen about half a dozen of them come and go. Know what? This is a great time to buy AC stock. In 2-3 years the stock will rebound nicely as we come out the cycle and the company will be up for sale jacking up the stock even more. Don't be looking to AC stock for your retirement but it's a great quick buck scheme. Always was, always will be. But don't take it from me, I don't play the market game. All my money is in real estate and my company pension, kinda old fashioned. Yep, this is not just another pilot forum. Knowledge just oozes out of here!!!

[Al707]

Now that's funny!

Does that mean we won't all be making 100K+ in a year to 18 months? Now where'd you put those glasses? I liked your projections better just a couple months ago

Here's to seeing nothing worse in the coming months.

[BigB]

Tony, I hope you weren't giving out that same advice when the old AC stock was, if memory serves me correctly, $.06 before delisting.

I agree Al, that was funny!

[tonysoprano]

Al, ya gotta get rid of those dark shades man, you're gonna get ulcers or have a heart attack someday. Dooom and Glooom!!! Look out, the sky is falling! Al, I hope you bid that left seat on this bid. BigB, pretty ignorant comments but no surprise. Hey guys put your money somewhere else instead of airlines. Oops, I forgot, Al doesn't have any money. AC doesn't pay him enough. Like I said, having been through a few of these cycles, I don't pay too much attention anymore. Ain't the first, won't be the last.

[A330]

I remember reading about Warren Buffett and airline stocks. In the article he was asked if he ever would ever consider buying airline stocks. He said that he has a recording of his own voice reminding himself why he should never buy airline stocks...

I would still be shorting the crap out of these stocks but better yet buy Berkshire Hath and sleep the night through....

[Al707]

I think it actually you that needs to lighten up Tony.

It is you who takes exception to anyone having a different opinion to yours. Mine was that progression and ability to bid out of the position group or flat pay in such short order, like what we've seen in the past few years IMHO will not remain as such! (just in November if you recall?)

When someone asked about likely progression times and salaries, you stated my forward projections were way off. I stated that your projections were way too optimistic and that you actually used a handful of absolute best case scenarios to try to strengthen your case. Having "been through a few of these cycles" even you should have known better.

How's your projections now Tony for ones ability to bid out of position group ie. left seat EMB and right seat 320?

Just 6 months later your rosy outlook based on ZERO historical or economical analysis is shown for what it was. Completely inaccurate! Mine... what you call "doom and gloom" was an attempt at being a bit more realistic for those on the outside looking in and looking for as accurate as possible data with which to make some basic financial assumptions!

You are the photo typical AC guy who's been around awhile and has (conveniently) forgotten about the past. Be it entry level salaries or likely progression when things slow down and It was YOU who (not me) was openly telling everyone on this forum how much you will make in 12-18 months... (100K + remember?)

I took exception to those obvious (to me) misleading statements. Some people on here might actually be seeking some accurate information or at least not overly optimistic information with which to make a decision and who better to ask than Tony who's been around awhile and has all the answers?

Never once have I told people to avoid AC or that layoffs were imminent or that the pay was worse than advertised. It is what was advertised, a very few of us lucky guys managed to be trained out of the group to the 320 or left seat EMB in very short order.

Things are slowing (even now Tony says so ) easy however to make that brilliant call..... NOW!

[Al707]

From AC highest paid in N.A thread to save the search.

And how long till the music stops playing here Tony?

Yes things are good at the moment, albeit in YYZ.

Also don't forget that the left seat of the EMB (which is amazing to be able to hold it soon) is a commute to a reserve block for anyone other than those from Ontario or can move here.

In my opinion it will not last long.

Al. You sound pretty sure of your doom and gloom prognostic. Care to enlighten us on the "why" part? I didn't know the music was going to stop. What won't last long?

What won't last long??? Ahhhh... the 100K gigs in 12-18 months you were talking about!

[tonysoprano]

Pardon my ignorance Al, it's just that I'm not seeing the pessimism you are. Things are slowing down. Wow. Is there no light at the end of this horrific tunnel? Upgrade courses are planned already for the fall because the training dep shuts down in the summer. To me, the oppurtunities are still there. Whether it's in the short term or not is anyone's guess and can change. I'm basing upgrades on retirements and movement that comes with each equipment bid. You're basing it solely on the economy. As long as we don't end up with a surplus, there's always movement. Don't be too quick to compain, it's amazing how things can work out even in tough times.

[Al707]

Who said anything about an EMB Capt bidding down to anything? You are reading way too much between the lines!

I have never spoken about this topic (or the AC highest paid topic) using, (I or me or my) but I do understand why you think that way as most people in the industry think of I/Me first. No wonder we are in such trouble (collectively) going forward.

I actually might have some consideration for those below (I or me or my position) and like I've said many times.... dispute your projections for salaries and progression! I was just trying to convey that you may not know it all. I certaily don't but it seems many people (just not you) saw this coming!

[BigB]

Oh please Tony, stop with the overly dramatic responses. Your are starting to remind me of my teenager.

It was not my intention in any way, to debase AC as a company. If that was your impression, I apologize. That said, here is some advice to you. Never..ever:

1) Urinate into a strong headwind.
2) Forget an anniversary.
3) Give advice on what stock, and when, to buy or sell.

The first two are fairly self explanatory. The last is a very personal thing. It's not unlike giving a person advice on what brand of deodorant to wear. Much like you implied, most everyone has their own style, and comfort level. If you are going to take the leap and ...#3....then be prepared to get called out to justify your argument. There were only two statements I had an issue with:

......but it's a great quick buck scheme. Always was, always will be...........

and,

Knowledge just oozes out of here!!!

The "Always was" can be proven historically incorrect (unless you're either a day-trader, or used shorting as part of your investing style). The "always will be" is a fairly bold statement in and of itself.

The "knowledge" statement gives me the impression that you have no problem professing yourself as the resident expert on such matters.....not that I am of course.

[tonysoprano]

Al. I saw it coming too Al. The point I made to you a while back is that it's still possible for upgrades to happen. I based my opinion on retirements and the fact that at the time, Boeing had not announced any delays and that the new airplanes would be on Bid 08-02. The economy doesn't always spell doom and gloom. As long as we don't show a surplus, anyone can bid what they want within reason and stand a good chance of getting it. Typically bids provide some movement which makes way for oppurtunities you may have thought weren't there. That was the message I was trying to pass along to the new guys.

[tonysoprano]

The "Always was" can be proven historically incorrect (unless you're either a day-trader, or used shorting as part of your investing style). The "always will be" is a fairly bold statement in and of itself.

You're not paying attention or my english is getting worse. Buy low, sell high. AC's stock has always gone up and down like a yo yo. Do I really have to explain all this? The stock has always taken dramatic dips with an approaching recession only to bounce back nicely afterwards. "Always will be" is simply based on that historical fact but risk is always there, no kidding, right? For you to use the .06 cent level and the delisting after 9/11 into CCAA is not a typical turn of events and therefore only a smartass would use it as an example.

The "knowledge" statement gives me the impression that you have no problem professing yourself as the resident expert on such matters.....not that I am of course.

Read it again. In fact I do anything but profess to be an expert. Especially on the market. I was simply taking a satirical opinion towards the abbundance of "knowledge" being expressed prior to my post. I simply piped in to show perhaps that all was not necessarily doom and gloom and that money can be made on the rebound when you buy cheap. You don't have to take my word for it, I didn't take advantage myself because I don't believe in the stock market but many people made a quick buck in past recessions and not just on airline stock. Not millions, just a quick buck. I sure hope you have a better understanding of your teenager than you do of me. Here's some advice to you: always practice what you preach. You used some pretty obvious dramatics too. Did my "saved from the brink" post get to you?

[rudder]

Hey Tony - have you seen the price of fuel lately? I always get a kick out of you guys that live within the equipment bids and retirements as if 'good times forever' were guaranteed.

Here is the script of the last 30 years in commercial aviation in Canada......boom-bust-boom-bust-boom-bust-boom. What do you think comes next?

[tonysoprano]

Bust! And thank God for retirements. On top of the bust, Boeing decides to delay the new plane. Bid 08-01 was saved by retirements. Bid 08-02 will be the same but could have been better if not for Boeing. My point is the junoir guys, for those who want, might still be able to move up. I don't know. Just sounds like it so far. If oil continues to go ballistic, we may be worrying about more than just the AC equipment bid and the ability to make 100k at AC as a newbie. I'm trying to be realistic only as far as world events allow me to be. Beyond that, my crystal ball isn't any better than yours.

[BigB]

Do I really have to explain all this? The stock has always taken dramatic dips with an approaching recession only to bounce back nicely afterwards. "Always will be" is simply based on that historical fact but risk is always there, no kidding, right? For you to use the .06 cent level and the delisting after 9/11 into CCAA is not a typical turn of events and therefore only a smartass would use it as an example.

Not trying to be a smart-ass, but I would prefer it if you not try to explain it. If you cannot see the flawed argument in the quote above, there is no hope. Every company, in it's own way, had to deal with 9/11...get over it.

I thought we went through this "saved from the brink" thing. Once again, my version is different than yours. Feel free to start a new thread, and we'll go through the 5 pages of debate if necessary, to agree to disagree. Better yet, bring up the topic at the next ACPA meeting.

[tonysoprano]

I know you guys pretty good by now. I've heard about 5 different versions of "your" story from about 5 of your colleagues. I really don't have the stomach to hear another version nor 5 pages of it. I can sum it up in 2 sentences:
1)You went tits up.
2)We bought you, get over it! There. Is that short enough for ya??

[WJ700]

It would be interesting to know the outcome if CAI had actually gone CCAA and used a temporary lower cost structure against AC to re-organize. A similar situation is Hawaiian and Aloha. The two carriers had their problems and one would drastically hurt the other while in Chapter 11; it was cyclical. The last was Hawaiian who went Chapter 11, reorganized and look where Aloha is now.

I know the fight of AC vs CAI will never die but CAI never did restructure because of the arranged marriage, and we never did get to see what ‘could’ have happened to AC had it gone that route.

[BigB]

Agree to disagree? C'mon Tony, you can do it!

Look, I respect you having an opinion. I encourage any or every-ones opinion...."it's a good thing" as Martha would say. However, I draw the line, and won't hesitate to hit the B*&%-S$#@ button when someone either spreads a falsehood, or touts something as fact which isn't.