RE:RE:An Interesting Thesis....Negotiated SettlementActually - if I may give more color - I do recall the newspapers quoting that the panel thought the AC 12.5% markup was too high - but I believe that was commentary and not fact quoted by the panel (someone correct me if I am wrong - but I did my homework at that time).
a) What the panel agreed to had nothing to do with the rate markup - but the methodology for calculating AC.Bs markup to Chorus - but made the provision that the adjustments need to be considered - if you read the agreement between CHR and AC.B - it has always been clear that using similar airlines as a benchmark had to take into account fleet age, etc.etc - to level the playing field - and CHR rightfully noted that with adjustments - whether using Air Canada or Chorus methodology - both had to take into account adjustments - what this round of arbitration was all about...but the media made it out that Air Canada won the ruling - which to me was blown out of proportion...somehow the media reported this as being a valiation that the rate was too high...but Randell correctly points out - this arbitration benchmarking has nothing to do with the rate (that is contractually what Air Canada and Chorus agreed to) - but it has to do with the rate of cost increases relative to the benchmark airlines- which in turn affects the markup paid to Air Canada....once you factor in adjustments - per my earlier emails - the markup does not change.
b) The panels intention has always been to force Air Canada and Chours to the table. I believe they also recognize Chorus cannot negotiate with Air Canada without the leverage a full arbitration win gives them (ie. anything less than 12.5% woudl have been spun by air canada as a victory)....an Air Canada win would have decimated Chorus stock (an outcome not desired by the panel).....which is why I feel the only path that meets thier original intention is a full arbitration win to Chrous (no change in markup) - it gives them the level playing field to force a discussion with Air Canada - in the end - Air Canada, Chours, and the panel win - under this arrangement.
c) It is also why the transcript from the Q3 call seemed like Randell was doging a bullet - (he in fact has not met with the panel, had further meetings - etc - because he is in fact talking with air canada to nail out the outcome....to get to the right answer) as he puts it....
My two cents - but will be curious to see if my hypothesis holds when they announce the conclusion.