The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Konark Gupta - Scotiabank Pvt Equity - Analyst
: Thanks, operator, good morning. My first question is on the capacity. You went down from 19% growth to 13% recently, and then, now, 11%. Just
curious if this incremental capacity cut is all driven by the union noise that we are hearing, and then, the Pratt & Whitney continued issues there,
or is there something else in these cuts?
Question: Konark Gupta - Scotiabank Pvt Equity - Analyst
: Okay, that makes sense. And is there any specific area or region where you have to cut more capacity because of these issues?
Question: Konark Gupta - Scotiabank Pvt Equity - Analyst
: Okay, that's very helpful, thank you. And then last one for me before I turn over. Jean-Frantois, if we can dig into the debt side of things. You repaid
some over the last three quarters, which is pretty good, I guess, but you still probably have a few more things to take care of in the next few quarters.
Can you help us understand what opportunity do you see now on the debt side to delever the balance sheet further in this new interest rate cut
environment that we are starting to see now finally? And does it help you?
Question: Konark Gupta - Scotiabank Pvt Equity - Analyst
: That's great. Thanks, guys.
Question: Cameron Doerksen - National Bank Financial Ltd. - Analyst
: Thanks very much. Good morning. A question on the Porter JV, which is now good to see that it's approved and underway. But you characterized
it, I guess, as the first phase of the joint venture. Can you talk about what additional phases there will be with this relationship?
Question: Cameron Doerksen - National Bank Financial Ltd. - Analyst
: Okay, that's great detail. Just second question for me. On the salaries and benefits costs, they were up quite a bit year-over-year, 30.5%, but also a
pretty big sequential increase as well from Q1, so I'm just wondering if there's anything unusual going on there.
Question: Cameron Doerksen - National Bank Financial Ltd. - Analyst
: Okay, and bringing some of the airport operations in Montreal in-house, does that affect the, I guess, the headcount and will also affect that line
item?
Question: Cameron Doerksen - National Bank Financial Ltd. - Analyst
: Okay, that's very helpful. Thanks very much.
Question: Tim James - TD Cowen - Analyst
: Thank you. Good morning. I'm just wondering if you could talk a bit about what you're seeing, you've called it competitive pressure. Could you just
talk about regionally where you see that being the most significant? Or maybe, I guess, in reference to your various hubs across the country, if
there's any particular regions where that's more significant than other locations?
Question: Tim James - TD Cowen - Analyst
: Okay, then on the same topic, the 7.5% decline in yield, is that a pretty good indication of the year-over-year change in fares or packages? Or is
there anything in terms of mix and route additions that would be influencing that as well? I'm just trying to disaggregate between maybe what's
just really year-over-year changes in the price that the customers are facing versus any other influences that drive that yield number.
Question: Tim James - TD Cowen - Analyst
: Okay, and my last question: have any changes in Porter's capacity plans been a contributing factor to your changing sort of capacity plans or your
financial guidance for this year? I'm just wondering if your assumptions that have been put into your business plan regarding the timing of quarter
and how it would ramp up have changed at all or if it's tracking to your original assumptions.
Question: Tim James - TD Cowen - Analyst
: Thank you very much.
Question: Michael Kypreos - Desjardins Capital Markets - Analyst
: Yes, good morning and thank you for taking my question. Maybe on CapEx. For the first six months of the year, you spent around CAD79 million
on CapEx, primarily for aircraft maintenance. It's just real nice step-up versus last year. Could you maybe just give us an update on your expectations
for CapEx, free cash flow generation for the balance of the year and if there are any plans to scale down some of this, given the lower expected
profitability?
Question: Michael Kypreos - Desjardins Capital Markets - Analyst
: Thank you. I appreciate it.
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