RE:RE:RE:RE:Any Comparables for Vertically Integrated Leisure Travel?LongRoad wrote: Your comparing an apple and an orange. Do your DD on Sunwing. That is the model TRZ is copying. They figured out how to deal with the currency issue a long time ago, have high ROE, and decent revenue growth. They also took away winter from TRZ but realized they could not compete at all flying to Europe even with TUI's support.
I haven't done any deep research, but based on your post I did peek at that 2015/2016 TUI report and look at the breakdown of Sunwing revenues.
https://www.tuigroup.com/damfiles/default/tuigroup-15/en/investors/6_Reports-and-presentations/Reports/2016/TUI_AR_2015-16_withMagazine.pdf-4572fe3dec10f0196450291182933f8c.pdf
This showed a breakout for Sunwing:
2014/2015 Revenues: 1557.3
2014/2015 Operating Income: 45.2 (2.9% operating margin)
2015/2016 Revenues: 1432.6
2015/2016 Operating Income: 11.6 (0.8% operating margin)
So revenue went down. Operating income went down and also looks sporadic. Operating margin was low.
Maybe these are models that are better evaluated on cash flow, but TUI did not break down Sunwing's cash flow (not that I could find anyway).
I know nothing about these businesses, and I spent about 15 minutes on this. You can probably defend their business models. I am only making the point that nothing on the financials of any of these companies shouts to me that there will be steady increases in revenues, operating margins, ROA, ROE, and ROIC. One of the real problems Transat has had is this darn cyclicality. I was only curious if the new model that Transat wants to pursue would dramatically change that.