RE:Making Money with AC SharesThe line from your post that analysts "are only permitted to work with data released by AC" hits the nail on the head. The other truth is that Air Canada may be motivated to acheive their goal of buying back shares at the lowest possible price. They may have some info on the 737MAX financial settlement with Boeing and may not be releasing it at this time. As Michael Rousseau noted in his recent answer to questions about this, " We will address this at the appropriate time". (paraphrased if not an exact quote)
To this end I have proposed a list of items that will be declared over the course of the next 6 months that will have to be released by Air Canada. Making money is a process and executing the plans to make money is a process. The news released should follow in line with the plans that they have already made public. The news release will follow in a "timely manner" after the plans have been executed.
All of these news items will unveil plans to increase earning and produce higher FCF.
1. Q4 and full year earning will be reported on February 18th. I know the flights were full everywhere. It will be very clear how profitable management of AC has been.
2. It may be within that report that we will get an update on the 737MAX settlement. We may not because they haven't got the settlement finalized or they choose to hold off to buy more shares at the lower price (I don't know that that strategy is legal if they do know what the settlement is).
3. An upgrade to AC's credit rating is imminent. AC creating a dividend policy may be the tipping point for agencies to make this commitment. It may even get AC invited to the TSX60.
4. Boeing seems confident that it will have the 737MAX certified and ready to fly early in Q3. Air Canada should be able to put the planes back in service expeditiously with 400 pilots ready to go and simulator(s) available for training more as more are delivered. Execution of this will be a challenge as there are old aircraft to park and retire plus releasing leases on other aircraft covering routes that were covering for the grounded MAX. All of this is supposed to get done in the busiest quarter of the year.
5. At about the same time the NEW Aeroplan kicks off officially. AC, the banks and VISA finaly get to launch their new and updated loyalty credit card program. The true value to each of the partners will surely be unveiled to the public at that time.
6. In this same time frame or possibly a little earlier we will have Q1 earnings released and the ensueing updates on corporate finances. How much affect will the virus have on profits? I know it will affect revenue but will it affect the bottom line much? They may even save money on fuel, redeployed aircraft, staff accomodation and per diems plus other savings (not spending). Others have pointed out that these routes are profit lean and full of Asian airline competition with lower labour costs. China flying consiists of 33 flights per week of 10,500 weekly flights for AC. It consists of only 2 of over 100 long distance flying routes including new additions to India and New Zealand. This problem is not exclusive to AC and AC once again will probably be one of the least hurt by this macro development.
7. May/June will be a busy time at AC. One more item that will be announced in this time frame will be the final input of the federal regualtors under Marc Garneau about the purchase of Air Transat. The more I look at this deal the more I am excited about its possibilities. AC has cash and AT has a clientelle and needs cash to get their demographic into new airplanes going to new destinations. They only have 44 planes (Rouge has 64 capped?). With backing of AC they will be able to grow that number with lower supplier costs due to being part of a top 20 airline. Target geographical markets that are currently underserviced are PQ to Europe and the west to sun and other destinations (Caribbean non stops perhaps). This company should be creating $100 to $200 million in earnings per year.
8. The actual return of the 737MAX to operations. People will question the safety of the aircraft. The one thing I noticed is that demand so far outstrips supply for air travel that there will be very short lived anxiety. Memories of how full every flight on old equipment was last summer will make them feel much happier being on brand new airplanes once again.
The analysts have been complaning that they will not be convinced of AC's capacity to consistently be a good investment until they have lived through and survived or thrived through a downturn. If AC can get through all of this and thrive, what will they have left to say on the negative side of PTs going forward? I am sure they will have something. It is what they do.