Indian Aviation Career NEWS

http://mission2canada.blogspot.co m/

http://philippinesaviationnews.blogspot.com/

Mission To Canada
Mission To Canada
www.missiontocanada.co.in
www.missiontocanada.org
www.missiontocanada.com

Lets Make Mission Possible

Thursday, January 20, 2011

United Wants Joint Venture With AirCanada

Speaking Wednesday at the Hudson Securities airline conference, United CEO Jeff Smisek said United is "looking at a trans-border joint venture" with Air Canada. Additionally, he said, "We're keenly interested ... to form a joint venture in Latin America as well; we will pursue that."

Smisek did not name any potential Latin partners, but the Brazilian carrier TAM is a member of the Star Alliance and last month, both Avianca-Taca, which combines Columbian and El Salvadoran airlines, and Copa, based in Panama, agreed to join Star.

"We think there's a tremendous opportunity for us in JVs," Smisek said. "We compete across the world with everybody, and JVs are a powerful competitive tool for us."

United has a transatlantic joint venture with anti-trust immunity with Air Canada, Continental and Lufthansa. This year, regulators approved its request for a transpacific joint venture with ANA.

Neha Jain

AVIATION SEO R& D WORK

Aerosoft Corp

http://philippinesaviationnews.blogspot.com/

Airline fares taking off

The recession may be over for Canada's airline industry as ticket prices begin to take off at Canada's two major airlines.

Both WestJet and Air Canada are recording higher fares so far this year than levels seen in 2009 and 2010.

In 2010 Air Canada marked year-over-year highs for nine months, while WestJet did the same for six months.

Unlike other analysts who blame the increase in traffic and rising cost of fuel, the president of the Consumers' Association of Canada tells 660News there's no real reason why fares should be this high.

"I think (airlines) take advantage of anything they can get their hands on and this shouldn't be so," says Bruce Cran.

"I don't see any solution, and it's going to be an increasing problem," he says. "Bales of straw are being loaded on a camel's back and one day when the last one gets on, people will get extremely upset."

Cran is doubtful, but hopes Transport Canada will step in to get more reasonable rates for the Canadian consumer.

Starting Wednesday it will also cost a more to fly on Calgary-based WestJet.

The airline is charging passengers $20 for a second checked bag on all of their flights.

WestJet shares appear ready for takeoff

Air Canada has been a surprising star on the stock market over the past 21 months, but the momentum is starting to shift in WestJet Airlines Ltd. (WJA-T14.10-0.04-0.28%)’s favour.

WestJet shares climbed a mere 14 per cent last year while Air Canada (AC.A-T3.12-0.16-4.88%) stock soared 161 per cent. Now, several analysts are examining whether it’s time to switch investing strategies and back WestJet.

MORE RELATED TO THIS STORY
Air Canada downgraded as storm clouds loom
As oil nears $100 mark, threat to nascent recovery grows
Airlines flying higher as they regain pricing power
WestJet Airlines (WJA-T)
14.10 -0.04 -0.28%
As of Jan 19, 2011 4:00
Range:1 Day 5 Day 1 Year View Larger Chart Add to Watchlist
Air Canada (AC.A-T)
3.12 -0.16 -4.88%
As of Jan 19, 2011 3:59
Range:1 Day 5 Day 1 Year View Larger Chart Add to Watchlist
UBS Securities Canada Inc. analyst Tasneem Azim said the window of opportunity appears to be closing for huge investment gains on Air Canada, whose shares declined 13 cents to $3.13 on Wednesday.

Timing, of course, is everything when it comes to investing in airline shares. From its IPO price of $21 in late 2006, Air Canada got beaten down to a penny stock in the spring of 2009, when it traded as low as 73 cents. Air Canada shares finally staged a prolonged rally after management secured labour and pension deals with unions in the summer of 2009.

But the Canadian Auto Workers union, which represents airport customer service agents and call centre staff, has a collective agreement that will expire on Feb. 28. Four other Canadian union contracts will expire March 31.

“We believe labour contract negotiations could lead to a material increase in wage and pension expense over the next few years for Air Canada,” Ms. Azim said in a research note.

She raised her 52-week price target on WestJet to $18 from $17, while reducing her target for Air Canada to $4.50 from $5. Ms. Azim maintained “buy” ratings on both carriers, but believes that WestJet will be able to better withstand the sting of rising fuel expenses.

Ms. Azim said WestJet enjoys a 30-per-cent cost advantage over Air Canada, mostly as a result of the smaller carrier having lower expenses “due to a non-union work force and single-aircraft fleet,” which keeps maintenance bills for Boeing 737s under control.

Despite the cost advantage, Calgary-based WestJet has encountered its own turbulence over the years. Its initial public offering went out at a split-adjusted $2.96 a share in July, 1999. While the carrier’s stock climbed steadily for nearly five years, its price trajectory has been choppy since mid-2004.

“WestJet’s stock has been dead money” for several years, Raymond James Ltd. analyst Ben Cherniavsky said in a research note this week. The shares fell 4 cents to $14.10 on Wednesday, or roughly the same level they were at almost six years ago.

CIBC World Markets Inc. analyst Jacob Bout raised his price target on WestJet to $17 from $16, noting that the airline is “starting to reap early benefits from its new reservation system as it seeks partnership agreements” with foreign carriers. Mr. Bout maintained his $5.50 target for Air Canada, but cautioned that “any major labour disruption would derail Air Canada’s positive momentum, especially during the busy summer period.”

Mr. Cherniavsky raised his price target for WestJet to $16.50 from $13.75, while keeping his target for Air Canada at $6.50. Still, he said he continues to view Air Canada as “the preferred way to capitalize on the airline up-cycle in Canada.” He maintained an “outperform” recommendation for Air Canada, while upgrading WestJet to “outperform” from “market perform.”

Air Canada doesn’t pay any dividends, but WestJet will distribute its inaugural quarterly dividend of 5 cents a share

Neha Jain

AVIATION SEO R& D WORK

Aerosoft Corp

German Airline enters fray, stand against UAE

A dispute not unlike the one between Canada and the United Arab Emirates over additional landing rights is being played out now in Europe with Lufthansa wanting to keep a Persian Gulf airline in check.

This latest spat between the German airline and the Dubai-based Emirates has not gone unnoticed here in Canada, prompting a senior Air Canada official to note the Conservative government has some company.

MORE RELATED TO THIS STORY
Air Canada proposed Emirates deal in 2006: documents
Alberta to push trade talks with UAE
Air Canada as the enemy

Canada to leave Dubai base
Air Canada chief operating officer Duncan Dee the German airline’s bid serves “as further confirmation that Canada was not only correct in what it did but also that it is not alone in wanting to ensure fair access to air rights.”

According to multiple news reports Lufthansa has been successful in having Emirates denied landing positions at Berlin’s new airport, which is to open in June of next year. Lufthansa argues that the Dubai fleet’s access to German airports has led to “unequal” air traffic between Germany and the UAE. (Emirates flies to four airports in Germany compared to one destination in Dubai for Lufthansa.)

The imbroglio in Canada, meanwhile, just won’t go away. Last week, Liberal foreign affairs critic Bob Rae visited the UAE to meet with officials and take his own read of the dispute. He thinks a deal can be worked out, with any new landing slots be phased in over time.

His visit raised eyebrows in the Prime Minister’s Office, where Harper officials were worried that the opposition MP was involving himself – and not in a good way – in Canadian foreign policy.

The relationship between the Canadian and UAE governments is poor right now. In retaliation for refusing the landing rights, the Gulf state has banned the Canadian military from using Camp Mirage, a staging base for Afghanistan that will cost Ottawa about $300-million to relocate. In addition, the UAE has slapped expensive visas on Canadians visiting the country.

But the Harper government has said that “tens of thousands of jobs” of Canadian workers would be at stake if it allowed additional landing rights to Emirates and another UAE airline, Etihad Airways.

“Canadian public policy on Air Canada and open skies needs to be clarified.”

The Liberal MP should be “speaking up for the hundreds of thousands of Canadians whose livelihoods depend directly or indirectly on a strong and vibrant Air Canada and Canadian airline industry.”

Elsewhere, Emirates has been denied additional landing rights in Paris by the French government. And South Korea has also refused the airline new slots.

Neha Jain

AVIATION SEO R& D WORK

Aerosoft Corp