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WJA sues AC for $30million

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  • #16
    Originally posted by sturla
    Originally posted by yyz-yvr
    I agree, they are becoming desperate
    I disagree. WJ's taking a natural and logical course of action given that they disagree with AC's legal actions. I do not see this as a frivolous suit (though I believe it will be tossed out), just a logical necessity. Now, the reality is that AC has restructured well and is finally ready to compete with WJ. The interesting question is this: - what will happen to Jetsgo? Sooner or later AC will turn their attention to this annoying little thing and say, "ok, that's it" and get into a nice little price war. The end result? No Jetsgo. I know this sounds crude but I do not see three major Canadian airlines (CanJet does not qualify).

    -Sturla
    I am sorry but I dont think that Jetsgo is going down the drain anytime soon. What they have done in just over 2 years took Westjet more like 5 years to do. They are growing rapidly, even if they are not doing well, somehow they are still able to grow. I really hope that Jetsgo is sucessful.
    Thanks,
    Michael

    Comment


    • #17
      Just like when WestJet broke them and got shut down, once upon a time?
      Not meaning to nitpick, but I'm not familiar with this piece of "once upon a time" news, can I request a link please?
      My Jetphotos.net Images

      Comment


      • #18
        Originally posted by "yyz-yvr
        I am sorry but I dont think that Jetsgo is going down the drain anytime soon. What they have done in just over 2 years took Westjet more like 5 years to do. They are growing rapidly, even if they are not doing well, somehow they are still able to grow. I really hope that Jetsgo is sucessful.
        Well, there is no evidence to suggest that they are expanding profitably. Nor, for that matter, is there any evidence to suggest the other. It's great that you hope that they are successful; however, my post wasn't based on my hopes or dreams on the future of Canadian airlines, rather my objective outlook on things.

        -Sturla

        Comment


        • #19
          Originally posted by yyz-yvr
          Originally posted by sturla
          Originally posted by yyz-yvr
          I agree, they are becoming desperate
          I disagree. WJ's taking a natural and logical course of action given that they disagree with AC's legal actions. I do not see this as a frivolous suit (though I believe it will be tossed out), just a logical necessity. Now, the reality is that AC has restructured well and is finally ready to compete with WJ. The interesting question is this: - what will happen to Jetsgo? Sooner or later AC will turn their attention to this annoying little thing and say, "ok, that's it" and get into a nice little price war. The end result? No Jetsgo. I know this sounds crude but I do not see three major Canadian airlines (CanJet does not qualify).

          -Sturla
          I am sorry but I dont think that Jetsgo is going down the drain anytime soon. What they have done in just over 2 years took Westjet more like 5 years to do. They are growing rapidly, even if they are not doing well, somehow they are still able to grow. I really hope that Jetsgo is sucessful.
          it may have taken westjet 5 years to do what jetsgo did in 2 but westjet were the pioneers and jetsgo are just following behind and borrowing some Ideas....

          Comment


          • #20
            Thats fine, I agree with both of you. I did not mean to offend anyone (if I did )
            Thanks,
            Michael

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            • #21
              heh ..

              Found in todays Globe and Mail, and on their web site here.
              (Subscription)


              WestJet's whine about Air Canada is getting old fast

              By DEBORAH YEDLIN
              Friday, December 17, 2004 - Page B2

              GlobeEdge INSIDER Edition

              What's with WestJet's whining? Is its most recent lawsuit against Air Canada a smokescreen to deflect the scrutiny to which the discount carrier is increasingly subjected, or is there truly some merit in its claim that its larger rival is engaged in abuse of the judicial system?

              And before going any further, let's clarify what "abuse of the judicial system" implies.

              It's an old cause of action that says a company or person can't use the processes of the court to sue someone for one thing in order to gain an advantage in another way. Many in the legal community view this as what football players call a "hail Mary" play.

              Now on to the business of sifting through the statement of claim filed on Wednesday to see whether the allegations are new or whether they're more of the classic attacks on Air Canada, which WestJet has never shied away from.

              And it doesn't take long to figure out which direction the document leans.

              The first header, after the formalities regarding the parties named, is about Air Canada's business plan being crafted with the sole purpose of destroying WestJet.

              WestJet was eating Air Canada's lunch in certain markets, but to assume CEO Robert Milton would focus the airline's resources on putting a competitor out of business -- especially when it wasn't on the soundest financial footing in the first place -- is ludicrous.

              Truth is, WestJet had quite a nice little monopoly once that pesky Canadian Airlines was out of the way, but now it faces competition not only from a healthy Air Canada, but also from the increasingly aggressive Jetsgo.

              So, while the courts will ultimately rule on its validity, this lawsuit comes across early in the claim as nothing more than sour grapes.

              WestJet attempts to substantiate its claim that Air Canada was indeed intent on driving it out of business by alleging that is what it had done to a number of other low-cost carriers, including Nationair, Astonia and VistaJet.

              But each of those carriers had its own serious problems, and they all suffered from underfunding in a capital-intensive business. On the other hand, one of WestJet's successes has been its ability to raise money at a time when many rivals are shut out of the capital markets.

              But there's more.

              The lawsuit alleges that Air Canada engaged in predatory behaviour, where it would sell seats below its costs or flood the market with more capacity in order to win market share. WestJet supports this statement by saying the Competition Tribunal rendered a decision in July, 2003, declaring Air Canada's conduct was anti-competitive.

              But paragraph 340 of the tribunal's judgment suggests otherwise: ". . . even if the Tribunal concluded that Air Canada failed the avoidable cost test, it does not lead to a conclusion that Air Canada has engaged in an abuse of dominant position under section 70 of the Act. Indeed, a practice of anti-competitive acts, among other elements, must be demonstrated under that provision."

              The WestJet suit goes on to claim that Air Canada's business plan called for an equity investor in the airline to be prepared to sustain losses of up to $200-million while Air Canada concentrated on driving WestJet out of business. Was Air Canada management so delusional that they thought attracting an equity investor prepared to lose money for a period of time was even in the realm of possibility? Last anyone checked, people invest for the purpose of making money, not losing it.

              Then there is the allegation that Air Canada aimed to "eliminate WestJet as a competitor through the abuse of the justice system."

              And how was this supposed to have been done? By not acting quickly enough to shut down the WestJet employees that were obtaining load factor information by using an access code granted to a former Canadian Airlines employee who went on to work for WestJet, the statement of claim alleges.

              But the best bit comes at the end, where the claim is clearly stated that "Air Canada, Zip [the discount subsidiary], Milton, Smith and Rovinescu conspired together to destroy WestJet." (At the time Steve Smith was the president of Zip and Calin Rovinescu an Air Canada executive vice-president.)

              This allegation presumes there was no executive team, no board input, no sense of fiduciary duty -- just a rogue management group hijacking an airline's business plan for the purpose of putting a competitor out of business.

              That's a tough one to believe. While it's true that Air Canada's management perhaps hasn't always made the best decisions, to suggest they abandoned sound business practices goes a bit far.

              With this lawsuit, WestJet reveals itself as a tempestuous adolescent that doesn't want to take responsibility for itself nor deal with the realities of operating in a tough business. It really should stop whining.

              [email protected]

              related: Rival tried to 'destroy' WestJet, suit says


              I'm sure some of you will enjoy that one *ahem*

              Originally posted by yyz-yvr
              Thats fine, I agree with both of you. I did not mean to offend anyone (if I did )
              *quickly builds a snow fort and hides* Me too!

              Comment


              • #22
                whining? i think thats going a little too far... other than that the artical is rather correct :P

                While it's true that Air Canada's management perhaps hasn't always made the best decisions, to suggest they abandoned sound business practices goes a bit far.
                as to that... if they had a sound business plan then how would they be loosing so much money a day?

                Comment


                • #23
                  Originally posted by Da-BoB
                  whining? i think thats going a little too far... other than that the artical is rather correct :P

                  While it's true that Air Canada's management perhaps hasn't always made the best decisions, to suggest they abandoned sound business practices goes a bit far.
                  as to that... if they had a sound business plan then how would they be loosing so much money a day?
                  Loosing money!? HA! you wish, AC L/F's for flights out of halifax are serioulsy FULL, and if not, then 4-5 seats open. I am not kidding, and WJA L/F's for flights out of halifax, half full or around there. I dont know what your talking about.
                  -Kevin

                  Comment


                  • #24
                    Originally posted by ACman
                    Originally posted by Da-BoB
                    whining? i think thats going a little too far... other than that the artical is rather correct :P

                    While it's true that Air Canada's management perhaps hasn't always made the best decisions, to suggest they abandoned sound business practices goes a bit far.
                    as to that... if they had a sound business plan then how would they be loosing so much money a day?
                    Loosing money!? HA! you wish, AC L/F's for flights out of halifax are serioulsy FULL, and if not, then 4-5 seats open. I am not kidding, and WJA L/F's for flights out of halifax, half full or around there. I dont know what your talking about.
                    thats only halifax... its only 1 city not the whole airline

                    Comment


                    • #25
                      Alright then, we looked (my father and I) looked at flights a while back to see about going to hawaii, every flight in the day was FULL to YVR from YYZ, i dont know much about WJA L/F's but I can seriously tell you AC L/F's are jam-packed.
                      -Kevin

                      Comment


                      • #26
                        Originally posted by ACman
                        Alright then, we looked (my father and I) looked at flights a while back to see about going to hawaii, every flight in the day was FULL to YVR from YYZ, i dont know much about WJA L/F's but I can seriously tell you AC L/F's are jam-packed.
                        maybe a couple of citys but still....

                        Comment


                        • #27
                          Originally posted by Da-BoB
                          it may have taken westjet 5 years to do what jetsgo did in 2 but westjet were the pioneers and jetsgo are just following behind and borrowing some Ideas....
                          Just like WestJet borrowed the same ideas from Southwest? Pioneers? Yeah right. Now that they are finally breaking away from the proven Southwest buisiness plan (Trasnborder, Flying into big hub airports, PTV), look where it is taking them. They have to be carefull they don't pioneer themselves out of buisiness.

                          Air Canada on the other hand, being around for almost 70 years are the real pioneers here.

                          Comment


                          • #28
                            Originally posted by ACman
                            Alright then, we looked (my father and I) looked at flights a while back to see about going to hawaii, every flight in the day was FULL to YVR from YYZ, i dont know much about WJA L/F's but I can seriously tell you AC L/F's are jam-packed.
                            The *biggest* difference between legacy carriers and LCCs is not their load factors but rather their cost structures. AC's problems have been more than anything connected to their expensive cost structure (if their flights are full then you more than validate this point); the reality is that LCCs have lower CASMs than legacy carriers, B6 and WN being the usual examples. What surprises me a bit, is how willing WJ seems to be on adandoning the "Southwest principles of LCCs", as RampPilot also mentioned. Transborder flights and using congested airports means less aircraft utilization (hrs/day), .

                            -Sturla

                            Comment


                            • #29
                              Hmmmmm..... funny coincidence that this lawsuit comes at about the same time that this happened. http://www.jetphotos.net/forums/viewtopic.php?t=18219

                              That must be very 'convenient' for WJ.

                              Comment


                              • #30
                                Just like WestJet borrowed the same ideas from Southwest?
                                pioneers in canada for the LCC


                                The *biggest* difference between legacy carriers and LCCs is not their load factors but rather their cost structures. AC's problems have been more than anything connected to their expensive cost structure
                                exactly


                                Hmmmmm..... funny coincidence that this lawsuit comes at about the same time that this happened. http://www.jetphotos.net/forums/viewtopic.php?t=18219

                                That must be very 'convenient' for WJ.
                                very convenient for AC to let westjet employees into the system and sue them for $200million as they try to get out of being bankrupt...

                                and also convenient that jetsgo sues westjet when things aren't going so well for jetsgo either


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