Investors considering an investment in the upcoming Air Canada IPO might first want to read today’s column ($) in The Globe and Mail by Derek DeCloet and recall the old joke about how to make a million dollars in the airline business (Answer: You start with a billion!). Air Canada’s parent ACE Aviation Holdings Inc. (TSX: ACE.B) is selling part of its stake that would value the airline at $2.2 billion.

As Mr. DeCloet humourously points out Air Canada wants to be valued based on its EBITDAR of $957 million, where the R stands for aircraft rent. Netting out interest, depreciation and amortization and aircraft rent (but not taxes because there are no profits), Air Canada is losing about $49 million. That is all I need to know to stay away even if I am interested in owning an airline stock.