Porter making "fairly good progress"
Bill,
I always find it amusing to read your post about the coming death of Porter. You always claim that passengers have plateaued, or is declining. They are about to go out of business because they are always having sales, etc. I would like to make a couple of points:
- If the fact that they always are promoting a sale means they are going out of business, then every retail store or airline will be in the same boat. People like to buy things when they are on sale and not at full price. Have you ever checked to see how many of these fairs are at the discounted rate vs. full price.
- Porter's use of the Q400 means that they have a lower breakeven than other airlines. Their current load factors have them around the breakeven point. The airline only launched in 2006, which means it is only 4 to five years old. For a business of this type it is fairly good progress, considering that they have rapidly added to their fleet, which would be expensive for capital and labour.
-When you compare the "declining" load factors you do not appear to take into consideration the seasonality of the industry. If you were being really dillegent you would compare if Westjet and Air Canada experience declines.
-With regards to debt. Yes they have lost a lot of money, but do you know how much money their current shareholders are willing to put in? (since it is a public company, only those around the table would know) That is the true test on if they will run out of cash or not.
- "Failed IPO" many companies have an IPO that does not proceed due to market climate. I am sure everybody will agree that the market is currently difficult for many companies without guaranteed success. Additionally, the fact that the bankers suggested that Westjet should invest, is not surprising seeing that it would make sense for the relationship.
As somebody else indicated, it is one thing to debate the merits of an island airport, it is something else to slag a public company and anybody that disagrees with your point of view.
Rob
I always find it amusing to read your post about the coming death of Porter. You always claim that passengers have plateaued, or is declining. They are about to go out of business because they are always having sales, etc. I would like to make a couple of points:
- If the fact that they always are promoting a sale means they are going out of business, then every retail store or airline will be in the same boat. People like to buy things when they are on sale and not at full price. Have you ever checked to see how many of these fairs are at the discounted rate vs. full price.
- Porter's use of the Q400 means that they have a lower breakeven than other airlines. Their current load factors have them around the breakeven point. The airline only launched in 2006, which means it is only 4 to five years old. For a business of this type it is fairly good progress, considering that they have rapidly added to their fleet, which would be expensive for capital and labour.
-When you compare the "declining" load factors you do not appear to take into consideration the seasonality of the industry. If you were being really dillegent you would compare if Westjet and Air Canada experience declines.
-With regards to debt. Yes they have lost a lot of money, but do you know how much money their current shareholders are willing to put in? (since it is a public company, only those around the table would know) That is the true test on if they will run out of cash or not.
- "Failed IPO" many companies have an IPO that does not proceed due to market climate. I am sure everybody will agree that the market is currently difficult for many companies without guaranteed success. Additionally, the fact that the bankers suggested that Westjet should invest, is not surprising seeing that it would make sense for the relationship.
As somebody else indicated, it is one thing to debate the merits of an island airport, it is something else to slag a public company and anybody that disagrees with your point of view.
Rob
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