WestJet vs. Air Canada
05-23-2007, 06:57 PM
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Joined APC: Apr 2007
Posts: 11
WestJet vs. Air Canada
From the recent issue of plane business...an interesting comparison!!
First Quarter Operating Margin/Break Even Wrap-Up
Bryan Bedford should be one happy man.
The Chairman and CEO of Republic Holdings is running the airline that not only posted the highest operating margin for the quarter, it also posted the lowest break-even figure for the quarter.
Excellent job by the folks at Republic.
Rank Airline Op Margin
1 Republic 18.9%
2 Allegiant 16.9%
3 WestJet 13.7%
4 Skywest 10.1%
5 AC Jazz 9.9%
6 Northwest 7.0%
7 AMR 4.6%
8 US Airways 4.3%
9 Midwest 4.0%
10 Southwest 3.8%
11 Delta 3.7%
12 ExpressJet 3.5%
13 AirTran 2.7%
14 Industry Average: 2.5%
15 Continental 2.0%
16 ACE -1.1%
17 United -2.1%
18 JetBlue -2.1%
19 Alaska -2.4%
20 Air Canada -3.1%
21 Hawaiian -7.5%
22 Mesa -7.9%
Below is the ranking for break-even load factor for the quarter. It is a function of operating costs and revenue.
1 Republic 62.7%
2 Southwest 66.3%
3 ACJazz 66.7%
4 Allegiant 68.1%
5 Midwest 70.5%
6 AirTran 70.5%
7 Skywest 71.3%
8 WestJet 72.1%
9 Alaska 75.0%
10 USAirways 75.1%
11 AMR 77.4%
12 Delta 78.0%
13 IndustryAverage: 79.2%
14 Northwest 79.4%
15 Continental 79.9%
16 Mesa 82.0%
17 ACE 84.8%
18 United 85.3%
19 AirCanada 85.5%
20 JetBlue 89.2%
21 Hawaiian 96.7%
WestJet
Another quarter, another excellent performance turned in by WestJet.
The airline recently reported first-quarter net earnings of C$29.9 million ($27.4 million) - a 132% increase over the same period a year ago, when it reported a C$12.9-million profit. Earnings per share more than doubled to C$0.23 cents from C$0.10 cents.
The EPS of C$0.23 nicely beat the analyst consensus of C$0.19 a share.
Operating margin was a stunning 13.7%, ranking it number three in the total North American airline universe. (Well, except for Frontier, which still has not reported first quarter results.)
The airline said in its call that its revenue outlook remains "robust" and demand continues to be strong. Given these strong trends, WestJet will increase capacity by 16% in the June quarter.
In addition, the carrier will be shifting some 17% of its total capacity from transborder and charter operations back into its domestic Canadian markets in response to seasonal strength. This reflects the airline's now ongoing manipulation of its capacity -- increasing it on the transborder and charter operations in the winter, and then building up domestic capacity in the summer months.
You may recall that WestJet has also embarked over the last year on a campaign to increase its ancilliary revenues. For the first quarter, these revenues increased a whopping 66% from a year ago, representing an increase of C$7.20 per passenger.
And what about the hapless ongoing saga with the aiRES reservation system? The airline said that if it cannot reach some type of agreement in regard to the successful delivery of a new completed system by July 31, they will take a write-off on the project of approximately C$32 million. (Sorry Clive, I used the figure of C$38 million in my recent interview with US Airways CEO Doug Parker. Guess it's bad enough without me making it worse.)
Excellent, excellent job posted by the folks north of the border. Oh, and one last interesting tidbit from the earnings call. The airline now says that it estimates that 45% of its passengers are business fliers.
Air Canada
Another quarter, another confusing set of numbers from Air Canada.
I am still at a loss as to why the airline continues to issue its financials in dribs and drabs. But they did it again this quarter, with a preliminary set of numbers, followed by a more complete set of numbers.
You may also recall how confusing the airline's results were last quarter, and how the airline continued to refer to EBITDAR/EBIT throughout its release and in its earnings call.
This quarter, a subscriber sent me a note and asked, "So, how many times do you think we are going to hear EBIT or EBITDAR in the airline's press release?"
I can now tell you the answer -- 20. Net profit is not in the airline's vocabulary anymore.
For the quarter, the airline reported a much larger loss than anticipated, posting an EBIT loss of C$78 million, or C$(0.72.) per share. (This excludes a one time gain.) This compared quite badly to an analyst consensus loss estimate of C$(0.13).
Air Canada reported the third worst operating margin in North America, -3.08%. Only Hawaiian and Mesa did worse, and well, we all know they are locked in a brutal fare war over $19 inter-island fares.
Air Canada also posted the 3rd worst break-even load factor of publicly traded airlines at 85.5%, worse than last years 83.4% figure for the first quarter.
In what was a particularly nasty slap at the airline, Versant Partners announced Tuesday it was downgrading shares of the airline from "buy" to "hold" as analyst Cameron Doerksen wrote "Although we are not negative on Air Canada shares, we believe that WestJet shares are a better investment vehicle for playing the current strength in the Canadian airline industry."
Ouch.
Just another less than impressive performance by Air Canada.
First Quarter Operating Margin/Break Even Wrap-Up
Bryan Bedford should be one happy man.
The Chairman and CEO of Republic Holdings is running the airline that not only posted the highest operating margin for the quarter, it also posted the lowest break-even figure for the quarter.
Excellent job by the folks at Republic.
Rank Airline Op Margin
1 Republic 18.9%
2 Allegiant 16.9%
3 WestJet 13.7%
4 Skywest 10.1%
5 AC Jazz 9.9%
6 Northwest 7.0%
7 AMR 4.6%
8 US Airways 4.3%
9 Midwest 4.0%
10 Southwest 3.8%
11 Delta 3.7%
12 ExpressJet 3.5%
13 AirTran 2.7%
14 Industry Average: 2.5%
15 Continental 2.0%
16 ACE -1.1%
17 United -2.1%
18 JetBlue -2.1%
19 Alaska -2.4%
20 Air Canada -3.1%
21 Hawaiian -7.5%
22 Mesa -7.9%
Below is the ranking for break-even load factor for the quarter. It is a function of operating costs and revenue.
1 Republic 62.7%
2 Southwest 66.3%
3 ACJazz 66.7%
4 Allegiant 68.1%
5 Midwest 70.5%
6 AirTran 70.5%
7 Skywest 71.3%
8 WestJet 72.1%
9 Alaska 75.0%
10 USAirways 75.1%
11 AMR 77.4%
12 Delta 78.0%
13 IndustryAverage: 79.2%
14 Northwest 79.4%
15 Continental 79.9%
16 Mesa 82.0%
17 ACE 84.8%
18 United 85.3%
19 AirCanada 85.5%
20 JetBlue 89.2%
21 Hawaiian 96.7%
WestJet
Another quarter, another excellent performance turned in by WestJet.
The airline recently reported first-quarter net earnings of C$29.9 million ($27.4 million) - a 132% increase over the same period a year ago, when it reported a C$12.9-million profit. Earnings per share more than doubled to C$0.23 cents from C$0.10 cents.
The EPS of C$0.23 nicely beat the analyst consensus of C$0.19 a share.
Operating margin was a stunning 13.7%, ranking it number three in the total North American airline universe. (Well, except for Frontier, which still has not reported first quarter results.)
The airline said in its call that its revenue outlook remains "robust" and demand continues to be strong. Given these strong trends, WestJet will increase capacity by 16% in the June quarter.
In addition, the carrier will be shifting some 17% of its total capacity from transborder and charter operations back into its domestic Canadian markets in response to seasonal strength. This reflects the airline's now ongoing manipulation of its capacity -- increasing it on the transborder and charter operations in the winter, and then building up domestic capacity in the summer months.
You may recall that WestJet has also embarked over the last year on a campaign to increase its ancilliary revenues. For the first quarter, these revenues increased a whopping 66% from a year ago, representing an increase of C$7.20 per passenger.
And what about the hapless ongoing saga with the aiRES reservation system? The airline said that if it cannot reach some type of agreement in regard to the successful delivery of a new completed system by July 31, they will take a write-off on the project of approximately C$32 million. (Sorry Clive, I used the figure of C$38 million in my recent interview with US Airways CEO Doug Parker. Guess it's bad enough without me making it worse.)
Excellent, excellent job posted by the folks north of the border. Oh, and one last interesting tidbit from the earnings call. The airline now says that it estimates that 45% of its passengers are business fliers.
Air Canada
Another quarter, another confusing set of numbers from Air Canada.
I am still at a loss as to why the airline continues to issue its financials in dribs and drabs. But they did it again this quarter, with a preliminary set of numbers, followed by a more complete set of numbers.
You may also recall how confusing the airline's results were last quarter, and how the airline continued to refer to EBITDAR/EBIT throughout its release and in its earnings call.
This quarter, a subscriber sent me a note and asked, "So, how many times do you think we are going to hear EBIT or EBITDAR in the airline's press release?"
I can now tell you the answer -- 20. Net profit is not in the airline's vocabulary anymore.
For the quarter, the airline reported a much larger loss than anticipated, posting an EBIT loss of C$78 million, or C$(0.72.) per share. (This excludes a one time gain.) This compared quite badly to an analyst consensus loss estimate of C$(0.13).
Air Canada reported the third worst operating margin in North America, -3.08%. Only Hawaiian and Mesa did worse, and well, we all know they are locked in a brutal fare war over $19 inter-island fares.
Air Canada also posted the 3rd worst break-even load factor of publicly traded airlines at 85.5%, worse than last years 83.4% figure for the first quarter.
In what was a particularly nasty slap at the airline, Versant Partners announced Tuesday it was downgrading shares of the airline from "buy" to "hold" as analyst Cameron Doerksen wrote "Although we are not negative on Air Canada shares, we believe that WestJet shares are a better investment vehicle for playing the current strength in the Canadian airline industry."
Ouch.
Just another less than impressive performance by Air Canada.
05-25-2007, 05:38 PM
#2
Gets Weekends Off
Joined APC: Mar 2006
Position: Contract purgatory
Posts: 701
About time one of mine WJ friends had something to say. Where were you the last time the AC wanabes were laying into me?
Good on ya West Jet. If I still flew in the country I'd want to be there. I just hope that my current employers Star Alliance partner, Air Canada, can get it together. . .well maybe not. I wouldn't mind seeing us get YVR-LHR fifth freedom rights. But, we still need good feed from their domestic, so perhaps they can work on that 85% break even. Man, is that correct?
Good on ya West Jet. If I still flew in the country I'd want to be there. I just hope that my current employers Star Alliance partner, Air Canada, can get it together. . .well maybe not. I wouldn't mind seeing us get YVR-LHR fifth freedom rights. But, we still need good feed from their domestic, so perhaps they can work on that 85% break even. Man, is that correct?
05-28-2007, 12:05 PM
#3
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Thread Starter
Joined APC: Apr 2007
Posts: 11
With Air Canada's break-even load factor around 85%, I would be somewhat concerned about the next few years. 2009 is right around the corner and with everyone wanting more that number can only get higher because there isn't anything left to sell. Where does the money come from. I would guess that the investment community is going to want further cuts from the ranks!!
06-10-2007, 01:31 AM
#4
Gets Weekends Off
Joined APC: Jan 2006
Posts: 345
About time one of mine WJ friends had something to say. Where were you the last time the AC wanabes were laying into me?
Good on ya West Jet. If I still flew in the country I'd want to be there. I just hope that my current employers Star Alliance partner, Air Canada, can get it together. . .well maybe not. I wouldn't mind seeing us get YVR-LHR fifth freedom rights. But, we still need good feed from their domestic, so perhaps they can work on that 85% break even. Man, is that correct?
Good on ya West Jet. If I still flew in the country I'd want to be there. I just hope that my current employers Star Alliance partner, Air Canada, can get it together. . .well maybe not. I wouldn't mind seeing us get YVR-LHR fifth freedom rights. But, we still need good feed from their domestic, so perhaps they can work on that 85% break even. Man, is that correct?
http://www.airlinepilotforums.com/sh...ad.php?t=10831
Big big expansion at AC, the 340's were slated for replacment but now they are keeping them for longer because they need all the planes they can get
06-10-2007, 03:46 AM
#5
Gets Weekends Off
Joined APC: Mar 2006
Position: Contract purgatory
Posts: 701
Oh contraire, I think you had a supporter.
I went to buy a ticket on from LAX to YEG the other day. Air Canada was the cheapest by far at $90 per sector. I think this explains the 85% break even load factor. But hey, perhap they were hoping I'd do what the reporter they paid off from the TO Star hoped and buy a sandwich and a coke.
As I mentioned in our previous tet-a tet, I would be very cautious about championing AC as an employer. Their management is awful, their fleet is in a shambles (yes they are replaceing, but is it too little too late?), they are losing money hand over fist. But hey, if you just have to fly for them then go for it and the best of luck too you; just be carefull eh.
As for the expansion. . .just be carefull my friend, they have a habit of laying off.
I went to buy a ticket on from LAX to YEG the other day. Air Canada was the cheapest by far at $90 per sector. I think this explains the 85% break even load factor. But hey, perhap they were hoping I'd do what the reporter they paid off from the TO Star hoped and buy a sandwich and a coke.
As I mentioned in our previous tet-a tet, I would be very cautious about championing AC as an employer. Their management is awful, their fleet is in a shambles (yes they are replaceing, but is it too little too late?), they are losing money hand over fist. But hey, if you just have to fly for them then go for it and the best of luck too you; just be carefull eh.
As for the expansion. . .just be carefull my friend, they have a habit of laying off.
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