And, instead of retrenching and cutting costs they announce a regional airline and low cost airline to compete with Westjet. Pure lunacy. For those with failing memory does this come as a complete surprise?
It's no different than the disastrous 146 strategy in 1997 or even CP's failed attempt to intimidate WJ before launch with the announcement to start hourly A320 service between YYC-YVR. Just add capacity and hope the lower cost operator will go away! Adding capacity with antique aircraft is suicide if you enter into a price war you cannot win with Westjet and it's modern fleet. To wit...Jetsgo!
Entirely and utterly predictable for AC, with the SP pumped by media analysts. This is hinged on the bet the Government will agree to the massive extrension to pump up the pension plan. Even if the Government agrees, the other airlines will extrract benefits from them to level the playing field thereby negating any advantage to AC. We are coming out of the profitable winter season, watch for plunging revenues and enthusiasm. There is a reason Westjet stock is valued ten time AC. Still a good short term play though to sell on the excessive exhuberence.