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AC Report 3rd Quarter Profit.  
User currently offlineAirCanada014 From Canada, joined Oct 2005, 1513 posts, RR: 0
Posted (8 years 10 months 3 weeks 1 day 2 hours ago) and read 3331 times:

AC report 3rd quarter profit of 270 million from a year earlier loss of 81 million dollars. Congratulations to AC.

http://www.theglobeandmail.com/servl...0051102.wace1102/BNStory/Business/

ACE Aviation Holdings Inc., the parent of Air Canada, swung to a third-quarter profit as higher passenger revenue and a greater load factor outweighed the effect of rising energy costs.

Net income for the quarter was $270-million or $2.33 a share from a year-earlier loss of $81-million or 67 cents a share.

Air Canada, which emerged from bankruptcy protection a year ago, was North America's most profitable carrier in the third quarter, ACE said.


I just copied and past few paragraphs. Any comments are welcome please.

16 replies: All unread, jump to last
 
User currently offlineLymanm From Canada, joined Jan 2001, 1138 posts, RR: 1
Reply 1, posted (8 years 10 months 3 weeks 1 day 2 hours ago) and read 3304 times:

Well I doubt former creditors who lost their shirts would be too enthused, but this is nonetheless a great piece of news for an industry that desperately needs it. It also gives inspiration to the likes of UA, DL & NW that a "legacy" carrier can indeed change its tune and become lean and profitable.

Over the last 5 years, we've heard yyz717 saying as soon as AC turned a profit, would change his anti-AC tune! Let's see if he does, hehehehe.

Perhaps FLYYUL's tenure at AC is solely responsible?

Ok, maybe that's stretching it!



buhh bye
User currently offlineLH477 From Canada, joined Jan 2004, 584 posts, RR: 5
Reply 2, posted (8 years 10 months 3 weeks 1 day 2 hours ago) and read 3288 times:

Quoting AirCanada014 (Thread starter):
AC report 3rd quarter profit of 270 million from a year earlier loss of 81 million dollars. Congratulations to AC.

Good news for AC, it's good to see that the oil prices didn't wipe out all of thier profits.

Boy the CCRA(?) has been great of AC!



Come on you gunners......!!!!!
User currently offlineLongHauler From Canada, joined Mar 2004, 4987 posts, RR: 42
Reply 3, posted (8 years 10 months 3 weeks 1 day 2 hours ago) and read 3299 times:

ACE Aviation's full news release:

ACE Aviation Holdings inc. reports third quarter operating income of $320 million and net income of $270 million
OVERVIEW

- Net income of $270 million.
- Operating income of $320 million in the third quarter of 2005.
- Despite a fuel expense increase of $213 million or 46 per cent, an
improvement of $77 million compared to the $243 million in operating
income before reorganization and restructuring items achieved in the
third quarter of 2004.
- Operating revenues up $337 million or 14 per cent reflecting passenger
revenue increases in all markets.
- EBITDAR for the quarter of $550 million, an improvement of $36 million
from the 2004 quarter.
- Excluding fuel expense, unit cost was reduced by 3 per cent.
- System passenger load factor up 2.0 percentage points to 82.4 per cent,
a record for any quarter in the Corporation's history.
- North America's most profitable carrier in the third quarter.

MONTREAL, Nov. 2 /CNW Telbec/ - ACE Aviation Holdings Inc. (ACE) reported
today operating income of $320 million for the third quarter of 2005, an
increase of $77 million from the operating income before reorganization and
restructuring items of $243 million recorded in the third quarter of 2004.
EBITDAR(1) of $550 million was achieved in the third quarter of 2005, an
improvement of $36 million over the 2004 quarter. Operating revenues were up
$337 million or 14 per cent reflecting passenger revenue increases in all
markets. Passenger traffic, as measured by revenue passenger miles (RPMs),
increased 9 per cent on a capacity increase of 6 per cent, as measured by
available seat miles (ASMs), resulting in a passenger load factor improvement
of 2.0 percentage points. On the same basis of presentation as in the third
quarter of 2004, passenger revenue per available seat mile (RASM) was up 5 per
cent reflecting the improvement in the passenger load factor combined with the
3 per cent improvement in passenger yield, as measured by passenger revenue
per revenue passenger mile.
Operating expenses increased $260 million or 12 per cent over the third
quarter of 2004 and included a fuel expense increase of $213 million or 46 per
cent versus the 2004 quarter on a capacity increase of 6 per cent. Excluding
fuel expense, unit cost was reduced by 3 per cent from the third quarter of
2004.
Net income for the third quarter of 2005 was $270 million and included a
provision for income taxes of $128 million. This compared to a net loss of
$81 million which included reorganization and restructuring items of
$313 million recorded in the third quarter of 2004 and an income tax provision
of only $1 million.
"Since the formation of ACE thirteen months ago we have reported improved
operating results in successive quarters year over year and I am pleased to
again report a significant improvement in operating results for the
Corporation in the third quarter," said Robert Milton, Chairman, President and
CEO of ACE Aviation Holdings Inc.
"Our ongoing efforts to reposition this company are clearly paying off.
These results for the third quarter, traditionally our best, are the strongest
results reported by any North American carrier for the period and reflect our
ability to now achieve North American industry leading levels of profitability
versus low cost carriers as well as legacy carriers. However, in the face of
record fuel prices and ever-increasing airport and air navigation fees, we
must renew our focus on reducing costs while ensuring we retain the highest
levels of safety and remain the airline of choice for consumers. In addition
to my appreciation for the unrelenting efforts of our employees, on behalf of
all of us at ACE, I would like to thank our customers for their tremendous
support in enabling us to achieve eighteen straight months of record load
factors.
"We remain confident that, barring any further unforeseen events, ACE's
financial results for the full year will be amongst the strongest in the
industry."

Other developments
------------------

Fleet and network enhancements

Since the commencement of the third quarter, Air Canada has added 14
aircraft to its fleet: one Airbus A340-300 aircraft, two Boeing 767-300
aircraft and the first 11 of 15 EMBRAER 175 aircraft on order. The remaining
four EMBRAER 175 aircraft on order will be in operation by January 2006. The
airline will begin taking delivery of 45 EMBRAER 190 aircraft in November
2005.
Air Canada Jazz continued taking delivery of 75-seat CRJ-705 aircraft in
the quarter, following the arrival of the first of 15 aircraft in May.
Fourteen CRJ-705s are currently in operation and the remaining aircraft will
be in service in November 2005. Jazz also entered into a four year lease
agreement with GECAS for an additional 8 recent production CRJ-200 aircraft.
By mid-2006, the Jazz fleet will be at 133 aircraft including 73 Bombardier
Regional Jet aircraft.
The introduction of these next-generation, fuel efficient jet aircraft
has allowed Air Canada and Jazz to better match capacity to market demand
thereby allowing the airline to maintain its strategy of disciplined capacity
growth and pursue new opportunities in markets best suited for these sizes of
aircraft. With the arrival of these new aircraft, Air Canada has introduced
Executive Class and in-flight enhancements on key U.S. transborder routes
serving Washington D.C. Reagan National, Philadelphia, Atlanta, Dallas and
Houston, as well as on Montreal-Winnipeg and Ottawa-Winnipeg routes. New next-
generation jet aircraft were also deployed on Toronto-Boston and Toronto-
Newark routes, resulting in increased service with Executive Class. The
deployment of new CRJ-705s has introduced Executive Class service on the
Toronto-Houston route, and has resulted in increased flights on the Calgary-
Houston, Toronto-Saskatoon and Toronto-Regina routes. Customers have responded
very favourably to the introduction of these two new aircraft types.
In the meantime, existing aircraft are being redeployed to introduce new
routes and enhance service on existing routes. Air Canada Jazz has converted
more than 10 existing routes (of over 1.5 hours duration) from Dash-8
turboprop to 50-seat CRJ jet service offering customers enhanced comfort and
faster travel times. Beyond greater convenience for customers, the conversion
of these longer distance turbo-prop routes to higher speed, and more
productive CRJ jet aircraft have the benefit of keeping costs of operation
competitive with the turbo-props they replace.
New routes introduced include: Hamilton-Montreal, Hamilton-Ottawa,
Vancouver-Las Vegas, Calgary-Las Vegas, Edmonton-Regina and Edmonton-
Saskatoon. The remaining EMBRAER 175 and CRJ-705 deliveries will allow further
route expansion in the coming months including the start-up of service between
Vancouver-San Diego, Abbotsford-Toronto, Abbotsford-Calgary, Calgary-Newark
and Calgary-Orlando.

Expansion of Toronto Hub as gateway to Asia

Air Canada continued to grow its non-stop services between its main hub
in Toronto and Asia in the quarter with the addition of Toronto-Seoul non-stop
summer service. From Toronto, Air Canada now operates non-stop flights to Hong
Kong, Tokyo and Beijing and the carrier plans to introduce non-stop service to
Shanghai in 2006 as well as re-introduce Toronto-Seoul non-stop services.
Between its Toronto and Vancouver gateways, Air Canada has one of the most
extensive transpacific networks in operation, with up to 12 non-stop flights
per day in each direction between Canada and seven destinations in Asia.
Starting November 1, long haul international flights have been relocated to
Pearson's Terminal 1 adjacent to Air Canada's domestic operations eliminating
the need for ground transportation to and from the airport's Infield Terminal.
The carrier also operates all-cargo services between Toronto and Shanghai
five times per week.

Update on the initial public offering of Jazz Air Limited Partnership

On August 4, 2005, ACE announced its intention to proceed with an initial
public offering of Jazz Air Limited Partnership ("Jazz") through an income
trust structure, with ACE retaining a majority interest in Jazz. ACE is
pursuing an initial public offering as a means to maximize the value of its
investment in Jazz for the benefit of ACE shareholders. A preliminary
prospectus in respect of the offering was expected to be filed in the third
quarter of 2005.
On September 30, 2005, the Corporation provided an update on its
intention to proceed with an initial public offering of Jazz stating that the
preparatory work to file a preliminary prospectus had been completed, and the
document was ready for submission. However, given conditions in the income
trust market subsequent to the launch by the Department of Finance of
consultations on the economic and fiscal implications of publicly listed flow-
through entities (FTEs), including income trusts, and the decision by the
Minister of National Revenue to postpone providing advance rulings respecting
FTE structures, ACE management felt it appropriate to refrain from proceeding
with the filing. ACE will proceed with a Jazz offering as market conditions
warrant.

Investment - US Airways

During the quarter, ACE completed its acquisition for $87 million
(US$75 million) of approximately 7 per cent of the newly created US Airways,
resulting from the merger of US Airways and America West airlines. The market
has responded favourably to the formation of this carrier and the value of
ACE's investment in the carrier has appreciated by approximately 67 per cent
or $US50 million as of the close of trading on November 1, 2005.
Air Canada and ACTS continue to develop their commercial relationships
with US Airways. Thus far, ACTS has signed five-year contracts covering a
range of activities including heavy maintenance of US Airways' Airbus A330
fleet, landing gear overhaul and work on a variety of engine and flight
control components. These contracts will provide approximately $50 million in
annual revenues to ACTS. Ongoing discussions continue between US Airways and
ACTS on further contracts covering a wide variety of maintenance work. The
dollar value and scope of contracts entered into is anticipated to grow
further.
In the area of airport services, meaningful cost reductions are expected
as Air Canada and US Airways finalize agreements providing for Air Canada's
relocation to more attractive airport facilities than currently utilized in a
number of U.S. cities.
ACE's Interim Unaudited Third Quarter 2005 Consolidated Financial
Statements and Management's Discussion and Analysis (MD&A) are available on
ACE's and Air Canada's website www.aircanada.com and at SEDAR.com on
November 2, 2005. A copy may also be obtained on request by contacting ACE's
Shareholder Relations at (514) 205-7856.



Never gonna grow up, never gonna slow down .... Barefoot Blue Jean Night
User currently offlineCessnapimp From Canada, joined Oct 2001, 1320 posts, RR: 19
Reply 4, posted (8 years 10 months 3 weeks 23 hours ago) and read 3141 times:

Boy, I've been waiting for a while for those results... well worth the wait! Excellent news! It will make me even happier when I will see the first 767's converted early next year (March approx.). Next big news for AC, the arrival of the 175's bigger sister preloaded with the Thales i4500 IFE. Hmmmmm...  Smile

Drifting yet further away from the topic but well worth the mention; yesterday was a nice day at Pearson as well. We could see the happy faces of customers (mostly FF'ers) and F/A's merrily make their way to International destinations (LHR, HKG yadayada) a mere hundred meters from security.

Louis Turpen's wet dream seems more and more practical by the day...

Next step, the full opening of Pier F and the transfer of transborder to T1 in January '07! Yaaaayy!


User currently offlineVonRichtofen From Canada, joined Nov 2000, 4627 posts, RR: 36
Reply 5, posted (8 years 10 months 3 weeks 18 hours ago) and read 2993 times:

This is great news! Cessnapimp you ever fly into YYC? If so I'm surprised I haven't bumped into to you yet at work.

Regards,
Kris



Word
User currently offlineCessnapimp From Canada, joined Oct 2001, 1320 posts, RR: 19
Reply 6, posted (8 years 10 months 3 weeks 17 hours ago) and read 2893 times:

Heya VonRichtofen... yes, 7 times since I started working, but I always go straight from the plane to the shuttle. I have stayed a while at the A-gates waiting for planes, but nothing much other than that. Tough to let people know, as I choose Reserve flying most months.

Cheerio!


User currently offlineYyz717 From Canada, joined Sep 2001, 16259 posts, RR: 56
Reply 7, posted (8 years 10 months 3 weeks 16 hours ago) and read 2819 times:

Quoting Lymanm (Reply 1):
Over the last 5 years, we've heard yyz717 saying as soon as AC turned a profit, would change his anti-AC tune! Let's see if he does, hehehehe.



Yup, here goes: the results look good. I also made positive commentary after the last quarter's results.

But ALL is not well:
1. First and foremost, WJ continues to expand at a much faster rate than AC and will continue to crowd AC in North America. AC's market share continues to diminish vis-a-vis WJ and with that will go pricing control.

2. Most airline analysts still peg WJ employee productivity at about 25% higher than AC. That means that AC employees remain about 25% underworked, or 25% overpaid (or a mixture of the 2). AC must lower unit labour costs and that will be difficult with militant unions. The poor unit-labour performance is an albatross than could kill AC one day. The airline business is a commodity business and only the most efficient will survive in the long run.

3. The FA union yesterday announced that they will challenge a planned disbursement of $300M to new shareholders. This could result in escalating labour disruptions and.or jittery investors.

4. A market downturn or recession could leave AC exposed just as it is adding 46 E190's.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineACYWG From Canada, joined Feb 2005, 265 posts, RR: 0
Reply 8, posted (8 years 10 months 3 weeks 15 hours ago) and read 2790 times:

Quoting Yyz717 (Reply 7):
Yup, here goes: the results look good. I also made positive commentary after the last quarter's results.

But ALL is not well:
1. First and foremost, WJ continues to expand at a much faster rate than AC and will continue to crowd AC in North America. AC's market share continues to diminish vis-a-vis WJ and with that will go pricing control.

2. Most airline analysts still peg WJ employee productivity at about 25% higher than AC. That means that AC employees remain about 25% underworked, or 25% overpaid (or a mixture of the 2). AC must lower unit labour costs and that will be difficult with militant unions. The poor unit-labour performance is an albatross than could kill AC one day. The airline business is a commodity business and only the most efficient will survive in the long run.

3. The FA union yesterday announced that they will challenge a planned disbursement of $300M to new shareholders. This could result in escalating labour disruptions and.or jittery investors.

4. A market downturn or recession could leave AC exposed just as it is adding 46 E190's.

Surprising as it may seem, I respect and agree with all you've written, except for the WJ expansion. AC has very little room to expand anymore with some of the markets in Canada reaching saturation now. As well, when your just a little bugger like WJ, there is lots of cities to fly to, but for AC its a little different, as they already fly to said cities.
On the Work efficiency topic, I whole-heartedly agree. When I worked at AC in YYZ for this past summer, I was amazed at the antics at that place. It was the only job that I've ever had, where you were encouraged to take extended breaks, and to sleep on the job. Sometimes it was busy, but other times it was a total farce.


User currently offlineYyz717 From Canada, joined Sep 2001, 16259 posts, RR: 56
Reply 9, posted (8 years 10 months 3 weeks 15 hours ago) and read 2781 times:

Quoting ACYWG (Reply 8):
When I worked at AC in YYZ for this past summer, I was amazed at the antics at that place. It was the only job that I've ever had, where you were encouraged to take extended breaks, and to sleep on the job.

You should write letters to management demanding these goofs be fired, by name. They are screwing AC's attempt to recover.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineACYWG From Canada, joined Feb 2005, 265 posts, RR: 0
Reply 10, posted (8 years 10 months 3 weeks 14 hours ago) and read 2740 times:

Even if I did, it would never happen, its the most senior ramp employees over at T2 that are the biggest problem (the union would save them everytime). Its the old folks home over there, and they've got far too many people for such a small list of departures. T1 is perfectly fine, they are always busy over there.
Anyways, I'm hoping to get a job as a FA with AC this coming summer, and I don't want to appear as a sh*t disturber.

[Edited 2005-11-03 05:17:08]

User currently offlineYOWza From Canada, joined Jul 2005, 4892 posts, RR: 15
Reply 11, posted (8 years 10 months 3 weeks 14 hours ago) and read 2715 times:

Quoting ACYWG (Reply 8):
It was the only job that I've ever had, where you were encouraged to take extended breaks, and to sleep on the job.

Have you never been to a federal government building in Ottawa? I have a friend at fisheries whose boss doesn't know his full name after 3 years of working there. He claims (and I believe him) that in that time he has done 2/3 months worth of work. That said he has developed solid solitaire skills.

YOWza



12A whenever possible.
User currently offlineCO737800 From Canada, joined Dec 2003, 545 posts, RR: 1
Reply 12, posted (8 years 10 months 3 weeks 12 hours ago) and read 2645 times:

AC made top story on BCTV today about charging for food on flights over 1.5 hours in North America and charging for blankets and pillows on day flights. I think they are going over board with the blankets and pillows. They should follow CO and offer meals during meal time.Must have been a slow news day

User currently offlineYyz717 From Canada, joined Sep 2001, 16259 posts, RR: 56
Reply 13, posted (8 years 10 months 3 weeks 6 hours ago) and read 2587 times:

Quoting CO737800 (Reply 12):
They should follow CO and offer meals during meal time.

If you want a meal, you should pay for it. Your airfare covers the cost of travel, not a meal.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineACYWG From Canada, joined Feb 2005, 265 posts, RR: 0
Reply 14, posted (8 years 10 months 3 weeks 4 hours ago) and read 2552 times:

Quoting Yyz717 (Reply 13):
If you want a meal, you should pay for it. Your airfare covers the cost of travel, not a meal.

Exactly, Aircraft are a form of transportation, not a airborne restaurant. Anyways, for the shorter flights, is it really that necessary to get a meal in the first place, I certainly don't need a meal on a 2 hour flight.


User currently offlineThreepoint From Canada, joined Oct 2005, 2135 posts, RR: 9
Reply 15, posted (8 years 10 months 3 weeks 1 hour ago) and read 2508 times:

Sorry to read about the black lining in your silver cloud Neil, but I believe these quarterly profit postings at AC will become routine all too soon.

Quoting Yyz717 (Reply 7):
First and foremost, WJ continues to expand at a much faster rate than AC and will continue to crowd AC in North America.

I'm certainly no airline analyst, but my understanding is rapid growth does not necessarily a profitable airline make. As long as AC retains high yields and a decent load factor over the routes they currently (or plan to) serve, then they'll be in fine form.

Quoting Yyz717 (Reply 7):
AC's market share continues to diminish vis-a-vis WJ

Perhaps, but by how much, really? Each airline targets a different demographic for the most part and I think WJ's current gains in market share are now quite small.

Quoting Yyz717 (Reply 7):
AC employees remain about 25% underworked, or 25% overpaid

Ah, the beauty of unions! I should know, I've worked for a government union long enough that I know there are many people content to do the absolute minimum required and hide behind all the protection afforded to them. It can be sickening to those of us with a real work ethic. But be careful with your broad paintbrush...there are many gems at AC and I'm willing to bet that there are equal numbers of culls employed at WJ.

Quoting Yyz717 (Reply 7):
A market downturn or recession could leave AC exposed just as it is adding 46 E190's.

I think a major economic correction will have dire consequences no matter where an airline is in it's fleet acquistion process. There will be future adversities for which no airline can prepare, but I think the folks in the corner offices at both our major carriers have the smarts to mitigate any negative effects, unlike the financial horrors we've seen in the last 5 years.



The nice thing about a mistake is the pleasure it gives others.
User currently offlineOlympus69 From Canada, joined Jun 2002, 1737 posts, RR: 7
Reply 16, posted (8 years 10 months 3 weeks ago) and read 2489 times:

Quoting Yyz717 (Reply 7):
1. First and foremost, WJ continues to expand at a much faster rate than AC and will continue to crowd AC in North America. AC's market share continues to diminish vis-a-vis WJ and with that will go pricing control.

How do you define 'rate'? If you're talking percentages it is meaningless when comparing entities of hugely different sizes. For example, if I have one plane and one route, and then buy a second plane and start a second route, I have expanded by 100% - in just one day!

Quoting Yyz717 (Reply 7):
4. A market downturn or recession could leave AC exposed just as it is adding 46 E190's.

Why would that affect AC more than other airlines? It is impossible to plan for every conceivable contingency. If you try to you will never get off the ground.
("We'd better not buy any more planes. There might be an invasion by aliens from outer space." Or, to be less far fetched - "There might be a global pandemic of avian flu that could kill 50 million people".)

In other respects I agree with what you are saying.


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