Air Canada To Purchase Air Transat


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1 hour ago, Maverick said:

The only thing of any real value that AT now brings to the table are the A321's and a few resorts that will now be virtual ghost towns for a few years.

British Airways bought British Caledonian to get their A320s.

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... and there it is. The first slam at a group of hard working people who are just like the rest of us. They go to work each day and do their best to serve the customers. We should be better than this

I'm Clive Bedoe and I approve this message  

Worst. Thread. Drift. Ever ?

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50 minutes ago, Super 80 said:

British Airways bought British Caledonian to get their A320s.

What is the relevance to the Air Canada/Air Transat merger? That's a deal done in the late eighties when economic context was much different.

If AC wanted A321, Airbus would be glad to produce them. They are presently reducing production and have tons of spare capacity and customers willing to defer their deliveries.

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1 hour ago, Marshall said:

I agree and in particular unless AC is looking way down range, the various restriction in the UK / EU put most holiday travel in the near feature to Europe out of the picture.  In that regard, any news what WestJet is going to do with / utilize their 787s this summer & fall or is it too soon for that decision?

Spain is open July 1st, no quarantine requirements. ?

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6 hours ago, mrlupin said:

What is the relevance to the Air Canada/Air Transat merger? That's a deal done in the late eighties when economic context was much different.

If AC wanted A321, Airbus would be glad to produce them. They are presently reducing production and have tons of spare capacity and customers willing to defer their deliveries.

Maverick said "The only thing of any real value that AT now brings to the table are the A321's..."

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regarding the A321s, here is a list they are shown as owning. Some were 2nd hand when they got them. Are all or any compatible with the ones owned by AC: Are any due for C checks etc.  For example C-GEZJ was built in 1988.  

image.png.8b7e74a9ed612bda9c76dbacd225b8e5.png

image.png.1f07046107b9aec90e934b1f6d01caa1.png

They also own a number of other aircraft, what would AC do with them considering the lack of market for used aircraft at the present time?

 

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10 hours ago, Super 80 said:

Maverick said "The only thing of any real value that AT now brings to the table are the A321's..."

I believe the TransAt group also owns a substantial number of resorts or ‘beds’ as the industry people call them. That has to be considered as valuable when it comes to future market share.

Edited by blues deville
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19 hours ago, Maverick said:

I believe this deal will wither and die on the vine and it should. AC is going to be half the size or less than it was and it can be argued that they have a vast excess of wide-body capacity.

The only thing of any real value that AT now brings to the table are the A321's and a few resorts that will now be virtual ghost towns for a few years.

If AT was based anywhere else but Quebec AC would have run for the hills long ago.

don't be so sure on the ghost town thing.  Carnival cruises started taking reservations again and their bookings are up 600% over 2019 apparently.  The LAST place I would want to be is on a ship but apparently people don't care.

 

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1 hour ago, blues deville said:

I believe the TransAt group also owns a substantial number of resorts or ‘beds’ as the industry people call them. That has to be considered as valuable when it comes to future market share.

I have heard this stated many times.  But I have read through AT’s financials and I cannot find any evidence of this.  They own some undeveloped land in Mexico that they would like to build a resort on but are yet to raise the funding to accomplish this.

Do you have any reference?

edit:  was able to find this:

In addition to maintaining strong business relations with thousands of hotels, Transat operates in the accommodations industry. In October 2017, it sold its 35% minority interest in Ocean Hotels to H10 Hotels with the aim of accelerating the development of its own hotel chain at South destinations.

The Corporation currently holds a 50% stake in Rancho Banderas All-Suites Resort near Puerto Vallarta on the Mexican Pacific coast. The hotel now has 49 suites, and will expand this to 263 by 2018.

Transat is firmly committed to becoming a full-fledged hotel operator in order to fully capitalize on its vertical-integration approach and have better control over its procurements.

 

Edited by Homerun
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Were the transaction to be consummated, divestiture of non-core TRZ assets would have been a given. But that was the pre-COVID plan.

Not sure what a hotel at a leisure destination is worth these days.

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3 hours ago, rudder said:

Not sure what a hotel at a leisure destination is worth these days.

Maybe more than you think if hotels have to operate at less than full capacity because of social distantiation, amongst other considerations..

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1 minute ago, Gumbi said:

Maybe more than you think if hotels have to operate at less than full capacity because of social distantiation, amongst other considerations..

I think that it was 2017 when TRZ announced that it was committing C$750MM to building or acquiring hotel capacity.

Irrespective of the transaction, they cannot afford that now.

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2 hours ago, rudder said:

I think that it was 2017 when TRZ announced that it was committing C$750MM to building or acquiring hotel capacity.

Irrespective of the transaction, they cannot afford that now.

Same presumably applies to Sunwing/

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International air travel isn’t expected to soar to pre-pandemic levels anytime soon, but it’s presenting another hang-up in the proposed merger between Air Canada and Transat A.T.

Holiday travel operator Transat has pushed back the date that either it or Air Canada can walk away from the $720-million deal without penalty after European regulators announced plans to conduct an in-depth investigation of the merger between the two Montreal-based airlines over fears of higher prices and less choice for flying over the Atlantic.

It’s another hurdle for a deal already beleaguered by the stay-at-home orders and travel restrictions caused by the COVID-19 pandemic. Investors question whether the deal will go through at $18 per share since Transat’s stock price has fallen to about $7 per share, a 65 per cent drop since the beginning of the year.

Transat said the one-month extension to July 27 is to take into account regulatory decisions complicated by the pandemic. Terms of the deal allow either party to postpone the outside date by one month with no questions asked, with potential for three additional postponements.

Air Canada, whose stock has plummeted about 65 per cent to $17.67 since January, can reportedly walk away from the deal if Transat is harder hit by the pandemic than the aviation industry as a whole, according to Reuters.

Canadian airlines’ flight volumes have dropped as much as 95 per cent since March, and Air Canada executives estimate it could take three years to re-establish pre-pandemic flight volumes. Ratings agency DBRS Morningstar predicts it could take up to four years to recover in its worst-case scenario, according to research published Tuesday.

When stay-at-home orders lift, trips to Europe won’t be the first thing on Canadians’ minds, based on the experience in China where domestic travel recovered to about half of pre-pandemic levels.

“We think it is likely that the initial recovery in air passenger traffic will be led by domestic travel (similar to China) as international travel is subject to the effectiveness of each country’s containment measures and fiscal and monetary policies,” DBRS stated.

From a global perspective, North America and Europe have been hardest hit by the pandemic, leading to a severe drop in air traffic. The International Air Transport Association predicts airlines will lose a collective $314 billion in revenue due to the pandemic.

Still, the European Commission said Monday it must conduct a more thorough investigation given the overlap in routes between the two airlines. It expects to make a decision by the end of September.

“This is a challenging time, especially in markets severely impacted by the coronavirus outbreak, but a return to normal and healthy market conditions must be based on markets that remain competitive,” Margrethe Vestager, executive vice-president for competition policy, said in a statement.

Combined, the airlines could snag as much as 60 per cent of the trans-Atlantic market share, with up to two-thirds of the flights from Toronto and Montreal, based on pre-pandemic estimates from the National Bank.

Canada’s competition regulator raised concerns about the market share the joint entity would enjoy, but the decision ultimately lies with Transport Canada. While Transport Canada’s decision is of more significance, there is no deadline for a government decision, Altacorp Capital noted to clients Tuesday.

Regardless, Altacorp expects travellers to remain cautious even as domestic traffic starts to recover in the second half of 2020.

About 75 per cent of Canadians agreed or somewhat agreed they will be nervous about flying until a vaccine is developed, according to a Nanos Research survey of 1,001 Canadians conducted for low-cost carrier Flair Airlines.

 

https://business.financialpost.com/transportation/transat-pushes-back-walk-away-date-on-air-canada-deal-after-eu-regulators-begin-probe

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Air Canada would like to cancel its marriage to Transat

Pierre-Olivier Zappa | VAT News

| Published on June 2, 2020 at 10:44 AM

 
 
 

 Joël Lemay / QMI Agency

After raising the stakes to buy Transat, Air Canada would ultimately like the federal government to prevent it from swallowing its competitor. 

The COVID-19 pandemic is likely to derail the acquisition of Transat. According to three sources informed of the behind-the-scenes discussions, Air Canada would like Ottawa to intervene to block the transaction. A transaction for which the carrier has nevertheless fought. 

Last August, Air Canada increased its offer to buy from $ 13 per share to $ 18. The company was ready to raise $ 720 million to get its hands on the Quebec flagship. To date, the transaction remains subject to the green light from Transport Canada, whose decision is pending. 

The current crisis has clouded the outlook and would make the acquisition unnecessary for the national carrier. "Air Canada made it clear to the federal government," said an informed source of the negotiations. 

Lobbying  

Since the start of the pandemic, Air Canada's CEO, Calin Rovinescu, and his teams have worked hard with Ottawa. According to the federal lobbyist registry, they reported no fewer than 25 communications with elected officials and public servants. 

As of March 18, Calin Rovinescu had direct access to Prime Minister Justin Trudeau to discuss issues related to "industry, taxes and finance and transportation". The following day, the company also discussed it with the Minister of Finance, Bill Morneau. 

On April 23, Transport Minister Marc Garneau also met with Air Canada. Four days later, it was the turn of the Minister of Economic Development, Navdeep Bains, to accept a call. Finally, on March 28, Deputy Prime Minister Chrystia Freeland also spoke with representatives of the carrier according to public records. 

Worried investors  

Since January 1, Transat's stock has collapsed on the Toronto Stock Exchange, dropping from $ 16.19 to $ 5.88 at its March low. This fall of 64% shows according to several analysts that investors have thrown in the towel. 

 

Air Canada refuses for the moment to clarify its intentions. "Regarding Transat, as we mentioned during the unveiling of our financial results for the first quarter of 2020 on May 4, the regulatory assessment process is underway and we have no update to provide at this stage. "said a spokesperson by email. 

A federal government decision on the transaction is expected soon. The Ministère des Transports did not immediately respond to questions from TVA Nouvelles.  

 

https://www.tvanouvelles.ca/2020/06/02/air-canada-voudrait-annuler-son-mariage-avec-transat?fbclid=IwAR3ikm7BL_ljnBVKSvCGJoKVW_kwWaT8dtybE6B1W3bE2j661Chy2fB6mMw

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The acquisition of Montreal-based Transat, a regional carrier, was seen as a way for Air Canada to extend its domestic network and capture more flights out of regional hubs.

It's statements like that, that make me question the validity of the reporter/article.  Only one person knows for sure and that's CR. 

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I find the following to be confusing, I never thought of Air Transat as a regional carrier.

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The acquisition of Montreal-based Transat, a regional carrier, was seen as a way for Air Canada to extend its domestic network and capture more flights out of regional hubs.

 

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I think their meaning is regionally Quebec based. They aren’t experts in the terms we use and might have been lost in translation. It doesn’t discount the text in the article but I’d rather hear it from someone other than TVA who have been against the deal from the beginning.

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Air Canada says it’s not backing out of Air Transat deal despite industry crisis

News from CTV News – link to story

Rob Lurie, Videojournalist & Selena Ross, Digital reporter | Wednesday, June 3, 2020

Air Canada is denying it wants to pull the plug on its offer to purchase Air Transat

MONTREAL — The airport is not what it once was, and some travel agents say their business is down a full 95 per cent.

It’s all a far cry from last summer, when Air Canada seemed to be moving inevitably towards a deal to buy tour operator Air Transat. The agreed price was $18 a share.

Today, though, Air Transat shares are trading at only $6.50.

“Looking at it logically, I think Air Canada wants out,” says aviation analyst John Gradek of McGill University.

He thinks Air Canada mostly wanted to buy Transat for its fleet of planes. Now, however, Canada has hundreds of planes parked on the tarmac. 

Earlier this year, the Competition Bureau said it had concerns about the proposed takeover, worrying it could lead to higher prices for Canadian travelers.

Again, things have changed: Air Canada is reportedly now lobbying government officials to block the deal, according to a TVA story on Wednesday. 

Analysts say it’s no longer worth anywhere close to the $700 million it was before, and the number is probably still falling.

Air Transat wouldn’t comment on the report on Wednesday, but Air Canada issued a statement saying that the only meetings it has had with government relate to the impact of COVID-19, and when it comes to Air Transat, Air Canada simply said it was waiting to hear what regulators decide. 

Gradek says that if the deal doesn’t go through, Air Transat could have a big problem. The odds of it surviving right now, without the acquisition, are slim, he said, and te only way out in that case may be a government bailout.

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1 hour ago, Marshall said:

Air Canada says it’s not backing out of Air Transat deal despite industry crisis

News from CTV News – link to story

Rob Lurie, Videojournalist & Selena Ross, Digital reporter | Wednesday, June 3, 2020

Air Canada is denying it wants to pull the plug on its offer to purchase Air Transat

MONTREAL — The airport is not what it once was, and some travel agents say their business is down a full 95 per cent.

It’s all a far cry from last summer, when Air Canada seemed to be moving inevitably towards a deal to buy tour operator Air Transat. The agreed price was $18 a share.

Today, though, Air Transat shares are trading at only $6.50.

“Looking at it logically, I think Air Canada wants out,” says aviation analyst John Gradek of McGill University.

He thinks Air Canada mostly wanted to buy Transat for its fleet of planes. Now, however, Canada has hundreds of planes parked on the tarmac. 

Earlier this year, the Competition Bureau said it had concerns about the proposed takeover, worrying it could lead to higher prices for Canadian travelers.

Again, things have changed: Air Canada is reportedly now lobbying government officials to block the deal, according to a TVA story on Wednesday. 

Analysts say it’s no longer worth anywhere close to the $700 million it was before, and the number is probably still falling.

Air Transat wouldn’t comment on the report on Wednesday, but Air Canada issued a statement saying that the only meetings it has had with government relate to the impact of COVID-19, and when it comes to Air Transat, Air Canada simply said it was waiting to hear what regulators decide. 

Gradek says that if the deal doesn’t go through, Air Transat could have a big problem. The odds of it surviving right now, without the acquisition, are slim, he said, and te only way out in that case may be a government bailout.

That is a ridiculous story that doesn't even fit the title.

No one from AC is even quoted in the article. 

The whole story is a crock of BS, journalism it is not.

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The title is not even close to the story but the story appears to be quite balanced as (maybe yes, maybe no).  I guess we will all have to wait and see what happens later this month.

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