Loonie sags, Air Canada soars & Canadians feather their nest eggs: BUSINESS WEEK WRAP

Written By Unknown on Sabtu, 14 Februari 2015 | 22.39

After a brief respite out of the headlines, the Canadian dollar reclaimed the spotlight this week, dipping as low as 78 cents as oil prices resumed their volatility after a relatively steady week.

Headed into the weekend, the loonie is changing hands at around 80 cents. But given the uncertainty in Canada's economy, it's anyone's guess as to where the Canadian dollar will be in the near future.

With oil seemingly in the same boat, unable to break much higher or lower than the $50 a barrel level, it seems a good bet that the loonie is in for a bumpy ride.

As Scotiabank currency strategist Camilla Sutton told us this week,  "Every sign we have, and that's lower oil prices, the Bank of Canada, a stronger U.S. dollar, all of it points to a weaker Canadian dollar in the near term."

Airlines cashing in

It's a mixed blessing overall, but it looks like a cheap loonie is good news for at least one industry: airlines. Air Canada posted its quarterly results this week, and they were eye-opening. After years of losing money, the airline earned more than $500 million last year, thanks to strong demand for air travel.


Cheap oil is saving Air Canada a lot on jet fuel costs, but the airline is so far using that extra margin to pad its bottom line. (Chris Rank/Bloomberg)

Cheap oil is great news for airlines because it lowers the cost of their biggest input next to salaries, which is the cost of jet fuel. Sure, jet fuel is priced in U.S. dollars and the airlines revenue is mainly is Canadian dollars (coming from ticket-buying customers in Canada) but on the whole, cheap oil and a weak loonie is letting the airline pocket a lot more profits.

And don't expect them to give that back any time soon. Cheap oil is giving airlines the chance to beef up their balance sheet for possible turbulence ahead.

Which means, airlines' extra fuel surcharges are likely here to stay, according to one industry-watcher. "They have no intention of ever removing it, in my judgment," Carleton University business professor Ian Lee told us this week.

Bombardier's bomb

It may be sunny skies for airlines, but the same can't be said for one of the companies that make their planes. Bombardier shook up its management this week, with long-time company icon Laurent Beaudouin leaving the company, and his son, erstwhile CEO Pierre, leaving that executive post and becoming chair.

Some say the changes are long overdue, as Bombardier has lost about two-thirds of its value since 2011, plagued by constant delays with its still not ready CSeries aircraft.

The new boss will be Alain Bellemare, just the third non-family member to hold that job since the company's founding. He certainly sounds like he has the resume for it, with years experience at United Technologies Corp., including at the Pratt and Whitney division that makes jet engines for Bombardier.

But as with most things, time will tell if he's the right man at the controls.

Retirement looking rosy

Laurent Beaudouin is certainly heading into a rosy retirement, and there was a story this week that bucked conventional wisdom by concluding that despite the occasional bleak headlines, on the whole most Canadians are on track for a pretty decent retirement.

McKinsey had some numbers this week suggesting that more than 80 per cent of Canadians are on track for a comfortable retirement. Experts say people tend to spend about two-thirds as much per year in retirement as they did while they were in the working world.

By that metric, the vast majority of Canadians can expect to do OK. "Certainly those below the median income line are in pretty good shape," David Baskin of Baskin Financial told Amanda Lang this week. "It's this interesting segment that we would define as the well-to-do who are in peril of having a disappointing retirement."

A rare bit of good news to remember the next time some financial expert convinces you you're in danger of eating catfood because you're decades behind where you should be.

Other stuff

Those were just some of our most-read stories this week. Be sure to check back with our website often for more, and don't forget to follow us on Twitter here. In the meantime, here's some of our more popular stories this week that you may have missed.






Anda sedang membaca artikel tentang

Loonie sags, Air Canada soars & Canadians feather their nest eggs: BUSINESS WEEK WRAP

Dengan url


Anda boleh menyebar luaskannya atau mengcopy paste-nya

Loonie sags, Air Canada soars & Canadians feather their nest eggs: BUSINESS WEEK WRAP

namun jangan lupa untuk meletakkan link

Loonie sags, Air Canada soars & Canadians feather their nest eggs: BUSINESS WEEK WRAP

sebagai sumbernya

0 komentar:

Posting Komentar

techieblogger.com Techie Blogger Techie Blogger