1989worstyear
Posts: 594
Joined: Sun Dec 04, 2016 6:53 pm

Re: Air Canada buying Air Transat

Sun May 19, 2019 2:11 am

beechnut wrote:
Wow... but I had a sneaking suspicion that this would happen. The fleets should integrate well; the A330s with the existing AC 330 fleet, all RR powered, and the 321s are a natural fit as well. The 321LR are an interesting acquisition. My prediction? AC will never take up its order for the MAX 9, but will pick up more 321NEOs and LRs. What happens to Rouge is going to be interesting to watch. Its fleet of 767s is long in the tooth. All the major delays I've incurred on AC in recent years were tech delays on the Rouge 767 and AC Mainline 767 fleets. Maybe AC Rouge becomes Air Canada Transat as their LCC wing, the A330s find their way there, along with the 321 classics; the 321LR goes over to mainline and the order gets topped up at the expense of the MAX 9. Maybe a deal is worked out with Boeing to take a few more 789 options at a rock-bottom price; consolation to Boeing for canceling the MAX 9 order, and compensation to AC for the MAX 8 grounding.

Rumours of the demise of Airbus at AC have been greatly exaggerated...

Beech


:shakehead:

Several of the A332's are already pushing 20.
Stuck at age 15 thanks to the certification date of the A320-200 and my parents' decision to postpone having a kid by 3 years. At least there's Dignitas...
 
1989worstyear
Posts: 594
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Re: Air Canada in exclusive talks to buy Air Transat

Sun May 19, 2019 2:19 am

ac7e7 wrote:
My predictions:

- The Max 8s are staying with mainline.
- Rouge is not going anywhere. People may not like it, but it has been a significant part of AC’s financial recovery.
- AT may have kept fares low, but look where that has lead them. Operating an airline in Canada is costly and it is not easy keeping fares that low while maintaining healthy margins year after year.

- The A330s will likely go to Rouge. AC has stated before they will need a 767 replacement at Rouge early next decade. This is likely it. They still have lots of life left in them vs the 767s.
- The A310s will be gone about as quickly as the CP DC-10s were after the AC/CP merger.

I think the bigger questions will be around the new A321s. Do they go to Rouge? Are they slated to “replace” the Max 9s at mainline? Would the order be cancelled/sold to another carrier?


Not quite. Many TS A330's were built built in the mid 90s - early 00's.

Man there's some real 1988 Factor stuff going on in this thread. :sarcastic:
Stuck at age 15 thanks to the certification date of the A320-200 and my parents' decision to postpone having a kid by 3 years. At least there's Dignitas...
 
YVRLTN
Posts: 2337
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Re: Air Canada in exclusive talks to buy Air Transat

Sun May 19, 2019 3:09 am

whywhyzee wrote:
YVRLTN wrote:
Neither this nor the Onex/WS deals happened overnight. If Onex had merged WS & TS, that would make quite a formidable competitor to AC with slots and EU & sun network that grows WS internationally massively overnight.

TS has been for sale for a while, so I suppose it was inevitable it would happen. I saw a graphic somewhere that the largest seat provider to the sun market is actually Sunwing, so this is a great opportunity for AC to grow their Vacations. WS is actually fairly insignificant.

In terms of fleet, the 310's will be all gone by next summer season. Many of the 330's are elderly and all leased, so may not be attractive. However, they may be a good interim fit because the extra capacity over the RV 767 will be needed with the demise of the TS capacity where there will be consolidation to the likes of CUN & PVR.

The 321LR would be an amazing aircraft for AC. From an ops level, most at AC HATE the MAX with a passion. Just the bulk loading and reduced payload vs the A320 was a dumb move they are regretting. The grounding could well be a blessing in disguise, Boeing owe them millions in compensation. What Beechnut suggests could be quite feasible, send the MAX 8's over to RV to replace the 319's where cargo is not so much of an issue and we see more 321's at mainline. The 330neo would be a superb machine for both mainline and a merged TS/RV supposing they keep the EU network.

From a consumer perspective, on the longhaul side this is only bad news. As a cost conscious traveler with my own business, TS are our lifeline to the UK. They are routinely $700 cheaper than AC/BA and we could not afford to pay $1400 more if there was not another option. Let's see what happens to WS longhaul, but I can't see AC maintaining YVR - UK for example at current TS fares. We just have to hope, that as the market exists (the aircraft are always full) that maybe a Thomas Cook or Thomson, even Norwegian would step in.

I think it would be good for Flair & Jetlines. Less competition, TS have built up a healthy domestic network, albeit mainly for feed. Go right in while the big two are in a flux streamlining their operations and all the upheaval that will cause behind the scenes sorting out the unions, seniority etc etc and offer the trunk routes like YVR/YYC-YYZ/YUL. The traffic is there and we need lower fares, golden opportunity to establish themselves and create more competition.

Anyway, it's not a done deal yet, though it sounds pretty serious, so lets wait and see.


Not sure what you are getting at in terms of payload. The max can take 2000lbs more payload than an A320neo, let alone AC's current A320s.

The Max can take ~16.3 tons of fuel at MZFW, where as the highest weight variant of the A320neo can only take 14.7 tons of fuel at it's already 1.7 tons lower MZFW.

Between the Max8 and A320neo, the max is the clear winner on payload. It takes a heavier load and it takes that load further.


I'm not sure how much that equates into the real world then, maybe ground handlers are not as good at stacking stuff in the hold as warehouse workers into LD's.... anyway, not much good if it cant be put into a belt loader. So no good for dense items which the 32S took and AC lost huge cargo capacity to Hawaii for example. Most of the time you bulk out before you hit the weight limit anyway, so not sure there is a disadvantage of the NEO overall.

Anyway, the real point seems to be that while neither deal happened overnight, the timing of this announcement suggests the potential acquisition of TS by AC is entirely reactionary to the WS sale. I don't think it is a good thing for TS employees, the Canadian market nor consumer.

The fleet aspect is interesting in the light of the MAX grounding and compensation owed to AC by Boeing, public perception of the aircraft and so on. TS will now be getting some real time in service data from the 321NEO which may be of interest to fleet planners.

I wonder if there were any other prospectors for TS? TUI and an amalgamation with WG maybe?
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Airlinerdude
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Re: Air Canada in exclusive talks to buy Air Transat

Sun May 19, 2019 5:15 am

I'd be very surprised if this deal was approved by the competition bureau without significant concessions regarding pricing and marketshare.

Alternatively, I could see this deal falling through and then Sunwing/TUI throwing in a bid. A WG/TS would be an interesting combination and would benefit from a lot of synergies.
 
Bobloblaw
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Re: Air Canada in exclusive talks to buy Air Transat

Sun May 19, 2019 7:18 am

YYZORD wrote:
I mean't in general, but yes you make very good points. For YVR I was thinking of adding AUS and BNA with your addition of year round IAD. For AUS, AC already flies mainline from YYZ and AUS is known as a tech hub and great film/art industry there. BNA is served from YYZ and YYC already so YVR would make a great addition with it's trans-pacific flights.

Dominion301 wrote:
YYZORD wrote:
Any transborder routes that AC can add at YYZ and YVR? We know YUL has a lot of potential like SEA, SAN, CLT, BNA, etc but I'm sure the other hubs have transborder routes viable that are still not served yet.



Based solely off the TS takeover? I’d say none at YVR. At YYZ, maybe extra capacity or frequency on some existing transborder routes.

However, I do think there’s room for AC to add more transborder at YVR. For example, IAD. Maybe seasonal RNO. At YYZ, maybe another crack at GRR? This time with a CRJ instead of 19 seater.

Ok. But none of that has anything to do with TS.
 
9252fly
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Re: Air Canada in exclusive talks to buy Air Transat

Sun May 19, 2019 10:43 am

Airlinerdude wrote:
I'd be very surprised if this deal was approved by the competition bureau without significant concessions regarding pricing and marketshare.


I don't foresee an issue with the competition bureau approving the purchase, considering their main focus is on domestic market where TS is relatively speaking, a non-player. They will likely have an interest in the international aspect where many airlines already offer multiple connection opportunities to TS destinations.
 
by738
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Re: Air Canada in exclusive talks to buy Air Transat

Sun May 19, 2019 12:38 pm

Airlinerdude wrote:
I'd be very surprised if this deal was approved

Im sure AC lawyers are all over this. If they didn't think it was worth their while Im sure they wouldn't be the exclusive suitor
 
edealinfo
Posts: 1491
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Re: Air Canada in exclusive talks to buy Air Transat

Sun May 19, 2019 1:32 pm

yulguy wrote:
It's the second major airline acquisition in Canada this week!

https://www.cbc.ca/news/business/air-ca ... -1.5138180

what was the first?
 
SpaceshipDC10
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Joined: Tue Jan 01, 2013 11:44 am

Re: Air Canada in exclusive talks to buy Air Transat

Sun May 19, 2019 1:52 pm

edealinfo wrote:
yulguy wrote:
It's the second major airline acquisition in Canada this week!

https://www.cbc.ca/news/business/air-ca ... -1.5138180

what was the first?


Seriously?

It's WestJet by Onex. See here: viewtopic.php?f=3&t=1422469
 
SpaceshipDC10
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Re: Air Canada in exclusive talks to buy Air Transat

Sun May 19, 2019 2:19 pm

I guess, if the deal is concluded, TS' A333s will be retired, except perhaps one that could be transferred to Mainline.
 
whywhyzee
Posts: 1014
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Re: Air Canada in exclusive talks to buy Air Transat

Sun May 19, 2019 6:33 pm

YVRLTN wrote:
whywhyzee wrote:
YVRLTN wrote:
Neither this nor the Onex/WS deals happened overnight. If Onex had merged WS & TS, that would make quite a formidable competitor to AC with slots and EU & sun network that grows WS internationally massively overnight.

TS has been for sale for a while, so I suppose it was inevitable it would happen. I saw a graphic somewhere that the largest seat provider to the sun market is actually Sunwing, so this is a great opportunity for AC to grow their Vacations. WS is actually fairly insignificant.

In terms of fleet, the 310's will be all gone by next summer season. Many of the 330's are elderly and all leased, so may not be attractive. However, they may be a good interim fit because the extra capacity over the RV 767 will be needed with the demise of the TS capacity where there will be consolidation to the likes of CUN & PVR.

The 321LR would be an amazing aircraft for AC. From an ops level, most at AC HATE the MAX with a passion. Just the bulk loading and reduced payload vs the A320 was a dumb move they are regretting. The grounding could well be a blessing in disguise, Boeing owe them millions in compensation. What Beechnut suggests could be quite feasible, send the MAX 8's over to RV to replace the 319's where cargo is not so much of an issue and we see more 321's at mainline. The 330neo would be a superb machine for both mainline and a merged TS/RV supposing they keep the EU network.

From a consumer perspective, on the longhaul side this is only bad news. As a cost conscious traveler with my own business, TS are our lifeline to the UK. They are routinely $700 cheaper than AC/BA and we could not afford to pay $1400 more if there was not another option. Let's see what happens to WS longhaul, but I can't see AC maintaining YVR - UK for example at current TS fares. We just have to hope, that as the market exists (the aircraft are always full) that maybe a Thomas Cook or Thomson, even Norwegian would step in.

I think it would be good for Flair & Jetlines. Less competition, TS have built up a healthy domestic network, albeit mainly for feed. Go right in while the big two are in a flux streamlining their operations and all the upheaval that will cause behind the scenes sorting out the unions, seniority etc etc and offer the trunk routes like YVR/YYC-YYZ/YUL. The traffic is there and we need lower fares, golden opportunity to establish themselves and create more competition.

Anyway, it's not a done deal yet, though it sounds pretty serious, so lets wait and see.


Not sure what you are getting at in terms of payload. The max can take 2000lbs more payload than an A320neo, let alone AC's current A320s.

The Max can take ~16.3 tons of fuel at MZFW, where as the highest weight variant of the A320neo can only take 14.7 tons of fuel at it's already 1.7 tons lower MZFW.

Between the Max8 and A320neo, the max is the clear winner on payload. It takes a heavier load and it takes that load further.


I'm not sure how much that equates into the real world then, maybe ground handlers are not as good at stacking stuff in the hold as warehouse workers into LD's.... anyway, not much good if it cant be put into a belt loader. So no good for dense items which the 32S took and AC lost huge cargo capacity to Hawaii for example. Most of the time you bulk out before you hit the weight limit anyway, so not sure there is a disadvantage of the NEO overall.

Anyway, the real point seems to be that while neither deal happened overnight, the timing of this announcement suggests the potential acquisition of TS by AC is entirely reactionary to the WS sale. I don't think it is a good thing for TS employees, the Canadian market nor consumer.

The fleet aspect is interesting in the light of the MAX grounding and compensation owed to AC by Boeing, public perception of the aircraft and so on. TS will now be getting some real time in service data from the 321NEO which may be of interest to fleet planners.

I wonder if there were any other prospectors for TS? TUI and an amalgamation with WG maybe?


If the hold size is the limit, the larger max will still win. The only reason for potentially losing cargo capacity to Hawaii is they used to fly 767s, not A320s. Dense items or large items, max still takes more cargo.

I still definately agree, the A321neo is likely very a highly appealing prospect to AC. With that being said, the max still has its place at AC.
 
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767333ER
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Re: Air Canada in exclusive talks to buy Air Transat

Sun May 19, 2019 7:24 pm

whywhyzee wrote:
YVRLTN wrote:
whywhyzee wrote:

Not sure what you are getting at in terms of payload. The max can take 2000lbs more payload than an A320neo, let alone AC's current A320s.

The Max can take ~16.3 tons of fuel at MZFW, where as the highest weight variant of the A320neo can only take 14.7 tons of fuel at it's already 1.7 tons lower MZFW.

Between the Max8 and A320neo, the max is the clear winner on payload. It takes a heavier load and it takes that load further.


I'm not sure how much that equates into the real world then, maybe ground handlers are not as good at stacking stuff in the hold as warehouse workers into LD's.... anyway, not much good if it cant be put into a belt loader. So no good for dense items which the 32S took and AC lost huge cargo capacity to Hawaii for example. Most of the time you bulk out before you hit the weight limit anyway, so not sure there is a disadvantage of the NEO overall.

Anyway, the real point seems to be that while neither deal happened overnight, the timing of this announcement suggests the potential acquisition of TS by AC is entirely reactionary to the WS sale. I don't think it is a good thing for TS employees, the Canadian market nor consumer.

The fleet aspect is interesting in the light of the MAX grounding and compensation owed to AC by Boeing, public perception of the aircraft and so on. TS will now be getting some real time in service data from the 321NEO which may be of interest to fleet planners.

I wonder if there were any other prospectors for TS? TUI and an amalgamation with WG maybe?


If the hold size is the limit, the larger max will still win. The only reason for potentially losing cargo capacity to Hawaii is they used to fly 767s, not A320s. Dense items or large items, max still takes more cargo.

I still definately agree, the A321neo is likely very a highly appealing prospect to AC. With that being said, the max still has its place at AC.

The cargo pit in a 737 has a round floor but has to hold rectangular cargo. Cargo volume is a number, but like any number it’s only worth so much. The door on the 737 is also not set up for taking anything of much size and because it’s swing pattern is inward that takes away from useable volume as well. For example, A Ford Crown Victoria is longer and wider than a Ford Ranger, but the Ford ranger can carry more because it’s set up for carrying things. It might be able to carry more and lift more, but is that capacity usable? I don’t personally know myself but I don’t think all that extra capacity on the 737 is useable.

Once those A321s get integrated into the fleet I’m sure they’ll be happy with them, but they’ll probably look back on everything and wish they had just coughed up the extra pocket change and ordered new A320s and A321s in the first place. As it is almost everyone is disappointed with the 737 there, just wait until they have brand new A321s to compare them to.
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LDRA
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Re: Air Canada in exclusive talks to buy Air Transat

Sun May 19, 2019 7:27 pm

SpaceshipDC10 wrote:
I guess, if the deal is concluded, TS' A333s will be retired, except perhaps one that could be transferred to Mainline.

Curious why?
 
LDRA
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Re: Air Canada buying Air Transat

Sun May 19, 2019 7:29 pm

1989worstyear wrote:
beechnut wrote:
Wow... but I had a sneaking suspicion that this would happen. The fleets should integrate well; the A330s with the existing AC 330 fleet, all RR powered, and the 321s are a natural fit as well. The 321LR are an interesting acquisition. My prediction? AC will never take up its order for the MAX 9, but will pick up more 321NEOs and LRs. What happens to Rouge is going to be interesting to watch. Its fleet of 767s is long in the tooth. All the major delays I've incurred on AC in recent years were tech delays on the Rouge 767 and AC Mainline 767 fleets. Maybe AC Rouge becomes Air Canada Transat as their LCC wing, the A330s find their way there, along with the 321 classics; the 321LR goes over to mainline and the order gets topped up at the expense of the MAX 9. Maybe a deal is worked out with Boeing to take a few more 789 options at a rock-bottom price; consolation to Boeing for canceling the MAX 9 order, and compensation to AC for the MAX 8 grounding.

Rumours of the demise of Airbus at AC have been greatly exaggerated...

Beech


:shakehead:

Several of the A332's are already pushing 20.


AC's 8 A333s are delivered 2001 timeframe. So they are same age
 
SpaceshipDC10
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Re: Air Canada buying Air Transat

Sun May 19, 2019 7:49 pm

1989worstyear wrote:
Several of the A332's are already pushing 20.


And?
You know, it's more a matter of number of cycles and flying hours (and maintenance) than how many years have elapsed since an aircraft was manufactured. For instance, one of TS' A310 is already over 30, so pushing 20 leaves a lot of time before retirement... An airplane is not a mobile phone that gets old because a new version is proposed after x months.
 
1989worstyear
Posts: 594
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Re: Air Canada buying Air Transat

Sun May 19, 2019 8:47 pm

SpaceshipDC10 wrote:
1989worstyear wrote:
Several of the A332's are already pushing 20.


And?
You know, it's more a matter of number of cycles and flying hours (and maintenance) than how many years have elapsed since an aircraft was manufactured. For instance, one of TS' A310 is already over 30, so pushing 20 leaves a lot of time before retirement... An airplane is not a mobile phone that gets old because a new version is proposed after x months.


I'm comparing the TS 330's to the 10 newest Rouge 763's everyone is complaining about. They're the same age, so if they were going to replace ALL of the 767's with the TS A330's, it seems like only a short term solution.
Stuck at age 15 thanks to the certification date of the A320-200 and my parents' decision to postpone having a kid by 3 years. At least there's Dignitas...
 
ac7e7
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Re: Air Canada in exclusive talks to buy Air Transat

Mon May 20, 2019 12:58 am

It may not be a short term solution if the TS A330’s have significantly less cycles than similar age Rouge 767s.
 
jimbo737
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Re: Air Canada in exclusive talks to buy Air Transat

Mon May 20, 2019 1:56 am

An AC / Transat merger massively reduces non-stop competition on countless routes from Montreal, Toronto and other Canadian gateways.

AC and Transat currently compete on, and are the only n/s option, on dozens of routes from Canada to Europe. A merger eliminates competition on these routes. Even the most basic QSI analysis will come to that conclusion.

At least today, one can book Winnipeg to, for example, Lyon, and have the option of booking competitive one-stop service, by booking Air Canada or booking WS to YUL and then Transat to Lyon. That will be no more.

The only competitive option now becomes significantly less desirable, (and uncompetitive): Winnipeg to Toronto / Montreal, or perhaps MSP or ORD, then a non Star alliance airline to a European gateway, (AMS, LHR, CDG), then a flight to Lyon. 3 stops.

There are lots and lots of “Winnipeg’s” out there. Not every one in Canada lives in Montreal or Toronto. Competitive choices will be thrashed.

There is no benefit to the consumer on this, and countless other routings to Europe and North Africa, as well a number of sun destinations. Fares will increase. There is zero possibility they won't. This is why the market loves the deal. It reduces competition and raises fares / yields resulting in higher profits.

And then there’s the 100% n/s dominance in what is likely the largest transborder market from YUL, FLL.

To suggest that Flair, based in Edmonton, who’s 2018-2019 transborder efforts were a disaster, or Jetlines, (based in Vancouver), who’ve been trying to generate their first asm since 3Q 2013, are going to be able to waltz in to YUL and sustainably capture a market WS has been working on since 2001, (and ditched because of the futility of chasing money losing marketshare, even with a lower cost structure), is patently absurd. It doesn’t pass the giggle test.

Even if WS took delivery of every 787 order and option, they could not fill the competitive hole for at least 5 and probably more years. There’s only so much you can do per day per tail.

Reducing competition isn’t going to improve service or reduce fares. It never has and it never will.

Transat is in no danger of failing so there is no urgency whatsoever on this file.

The desire of relatively few shareholders wanting to cash out vs Canadian consumers getting screwed by even more market concentration will play very, very poorly in an election year, and especially an election year where an already unpopular PM needs every vote he can get in October, especially in Quebec.

And we all know how much the media loves to run stories about how the airlines are “ripping off” consumers.

No incumbent MP looking to be re-elected in October will want anything to do with supporting or acquiescing to any merger that will obviously result in less competition and therefore significantly higher prices for their constituents trip to Europe or sun trip in the future.
 
1989worstyear
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Re: Air Canada in exclusive talks to buy Air Transat

Mon May 20, 2019 2:27 am

ac7e7 wrote:
It may not be a short term solution if the TS A330’s have significantly less cycles than similar age Rouge 767s.


Even if they did - there's still the 1988 Factor.
Stuck at age 15 thanks to the certification date of the A320-200 and my parents' decision to postpone having a kid by 3 years. At least there's Dignitas...
 
codyul
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Re: Air Canada in exclusive talks to buy Air Transat

Mon May 20, 2019 11:45 am

This is going to get sticky, me thinks. Pilots and FA's have scope on the growth of Rouge, so buying and merging Transat, I'm quite sure that they won't be allowed to just fold and combine all of Rouge in to TS and have it double in size. The extra big issue being that they have been given a let by pilots to grow Rouge narrowbody but not widebody.
Hmmm interesting stuff about to go down.
YUL PNC :weightlifter:
 
wrongwayup
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Re: Air Canada in exclusive talks to buy Air Transat

Mon May 20, 2019 4:08 pm

1989worstyear wrote:
ac7e7 wrote:
It may not be a short term solution if the TS A330’s have significantly less cycles than similar age Rouge 767s.


Even if they did - there's still the 1988 Factor.


Educate me - what is the 1988 Factor? (Particularly interested in hearing it from a guy whose username is "1989worstyear"!!! :D :D :D )
 
SpaceshipDC10
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Re: Air Canada in exclusive talks to buy Air Transat

Mon May 20, 2019 4:23 pm

LDRA wrote:
SpaceshipDC10 wrote:
I guess, if the deal is concluded, TS' A333s will be retired, except perhaps one that could be transferred to Mainline.

Curious why?


Because it's a -343 whereas the others are -342. It has a greater range, but also perhaps less cycles since its a 2001-built while the others are from the mid-90s for flights in Asia.
 
wrongwayup
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Re: Air Canada in exclusive talks to buy Air Transat

Mon May 20, 2019 4:52 pm

The TS A330-300s have the high-density door configurations which allow for significantly higher seat counts. ("AAAA" vs "AA1A" on the AC aircraft which gives 440 vs 375 max seats respectively, if I'm not mistaken. Still a big jump over AC's ~265 seats but something to consider when thinking about Rouge-type applications for the combined A330 fleet.
 
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767333ER
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Re: Air Canada in exclusive talks to buy Air Transat

Mon May 20, 2019 5:16 pm

jimbo737 wrote:
An AC / Transat merger massively reduces non-stop competition on countless routes from Montreal, Toronto and other Canadian gateways.

AC and Transat currently compete on, and are the only n/s option, on dozens of routes from Canada to Europe. A merger eliminates competition on these routes. Even the most basic QSI analysis will come to that conclusion.

At least today, one can book Winnipeg to, for example, Lyon, and have the option of booking competitive one-stop service, by booking Air Canada or booking WS to YUL and then Transat to Lyon. That will be no more.

The only competitive option now becomes significantly less desirable, (and uncompetitive): Winnipeg to Toronto / Montreal, or perhaps MSP or ORD, then a non Star alliance airline to a European gateway, (AMS, LHR, CDG), then a flight to Lyon. 3 stops.

There are lots and lots of “Winnipeg’s” out there. Not every one in Canada lives in Montreal or Toronto. Competitive choices will be thrashed.

There is no benefit to the consumer on this, and countless other routings to Europe and North Africa, as well a number of sun destinations. Fares will increase. There is zero possibility they won't. This is why the market loves the deal. It reduces competition and raises fares / yields resulting in higher profits.

And then there’s the 100% n/s dominance in what is likely the largest transborder market from YUL, FLL.

To suggest that Flair, based in Edmonton, who’s 2018-2019 transborder efforts were a disaster, or Jetlines, (based in Vancouver), who’ve been trying to generate their first asm since 3Q 2013, are going to be able to waltz in to YUL and sustainably capture a market WS has been working on since 2001, (and ditched because of the futility of chasing money losing marketshare, even with a lower cost structure), is patently absurd. It doesn’t pass the giggle test.

Even if WS took delivery of every 787 order and option, they could not fill the competitive hole for at least 5 and probably more years. There’s only so much you can do per day per tail.

Reducing competition isn’t going to improve service or reduce fares. It never has and it never will.

Transat is in no danger of failing so there is no urgency whatsoever on this file.

The desire of relatively few shareholders wanting to cash out vs Canadian consumers getting screwed by even more market concentration will play very, very poorly in an election year, and especially an election year where an already unpopular PM needs every vote he can get in October, especially in Quebec.

And we all know how much the media loves to run stories about how the airlines are “ripping off” consumers.

No incumbent MP looking to be re-elected in October will want anything to do with supporting or acquiescing to any merger that will obviously result in less competition and therefore significantly higher prices for their constituents trip to Europe or sun trip in the future.

Overlooking one major fact. Anywhere AC and TS compete, mainly Europe or sun destinations, there are many other competitors either that are from one of those places or from somewhere between those places. Even if they have to make an extra stop, for most people cheaper would be better. If I’m flying to Mexico for example I could go direct where there is little competition or if I allow a stop somewhere there’s lots of competition from the US. We really aren’t losing much and it’s just sour grapes at the WS/ONEX bunch that wanted to buy TS themselves.
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MIflyer12
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Re: Air Canada in exclusive talks to buy Air Transat

Mon May 20, 2019 5:36 pm

jimbo737 wrote:
An AC / Transat merger massively reduces non-stop competition on countless routes from Montreal, Toronto and other Canadian gateways.

AC and Transat currently compete on, and are the only n/s option, on dozens of routes from Canada to Europe.


Massively? On what routes are AC & Transat the only non-stop competitors? As a fraction of AC's routes what does that represent? Bag the hyperbole... argue with data.
 
fraT
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Re: Air Canada in exclusive talks to buy Air Transat

Mon May 20, 2019 8:17 pm

MIflyer12 wrote:
jimbo737 wrote:
An AC / Transat merger massively reduces non-stop competition on countless routes from Montreal, Toronto and other Canadian gateways.

AC and Transat currently compete on, and are the only n/s option, on dozens of routes from Canada to Europe.


Massively? On what routes are AC & Transat the only non-stop competitors? As a fraction of AC's routes what does that represent? Bag the hyperbole... argue with data.


It's mainly French secondary cities to YUL and some Eastern European capitals as well. But one has to keep in mind that all of these destinations are only flown during 5 months or less and mostly not even daily.
In France, AF is fighting for those passengers as well with a stop in CDG and the same applies for Eastern Europe with tons of one-stop connections.

As it was mentioned above, those bargain hunting passengers will take a one-stop connection any day if the fare is only slightly cheaper. So I doubt that a merger would cause a massive fare increase.
 
smartplane
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Re: Air Canada in exclusive talks to buy Air Transat

Mon May 20, 2019 8:40 pm

ac7e7 wrote:
smartplane wrote:
jimbo737 wrote:
The devil will be in the detail.

There is absolutely no question the Competition Bureau will look at this transaction very closely given to market dominance issues in YUL to the Sun and Canada in general to Europe.

There is very little chance they would approve the merger without a number of conditions that AC may find very difficult to swallow.

This represents a dramatic reduction of competition, and that sort of thing is a big issue, especially in an election year and especially with the house due to rise in about a months time, and not reconvening until after a fall election, and potentially a change in Gov't. There won't be time for any parliamentary committees to deal with this prior to election. Trudeau / the Libs are already in big trouble, (ask a cabbie in Montreal what he thinks of Trudeau), and slamming this one through would be close to political suicide.

Transat is in no danger of going under, which was not the case in 1999 with AC/CP.

Airline competition in Canada is a massive hot button these days. Any consolidation that results in a reduction of choice won't be looked at favorably, by voters or government.

And talk about adding another layer to the already complex, high cost operations at AC?

Stay tuned.....

Lets see what the Competition Bureau decides. Sell-off parts to Onex?

Or could the end game be to sell to Onex in the first place? Air Transat initiate talks with Air Canada. Air Canada initiate Competiton Bureau application. Sale to Air Canada declined. Sale to Onex creates more balance.


Considering AC agreed to a $40M fee payable to AT if they walk away or the competition bureau rejects the takeover, I think not.

These airlines are not in the business of “balance”. That is the competition bureau’s job (though I disagree with its very existence). Airlines are businesses and they are out there to gain and hold market share, while at the same time turning a profit.

If AC thought AT was a dog, they would let Onex/Wesjet take it over and live with the debt (Wardair anyone?). AT is not looking for ‘balance’. They are looking out for their shareholders.

The devil is in the detail.

Many conditions applying to the CAD40m fee, otherwise the best outcome for AT and Onex, is to receive the money from a rival, and still merge.

Balance reference was in the minds of the Competition Bureau - owners / shareholders definitely not.
 
jimbo737
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Re: Air Canada in exclusive talks to buy Air Transat

Tue May 21, 2019 1:44 am

Competition is not just price, it's QSI. I doubt the Bureau are going to be be bamboozled into believing that replacing a competitive n/s service with one n/s service and a few one stop services, (that already exist), is immaterial in the competitive marketplace.

Take Saskatoon to Faro. Consumers can now fly Saskatoon to Toronto to Faro on either all AC, or WS to YYZ and then then TS to Faro. One stop. They could also fly the route on vastly inferior 2 stop itineraries on any number airlines with a minimum travel time of 17+ hours and as much as 56 hours. Although they are available for sale, it isn't a competitive product.

With a merger of AC and Transat, the competitive options for Canadians, not just price, but QSI based, will be enormously inferior.The Bureau will look at both factors.

No one is going to convince the average Canadian that having 2 companies offering n/s service to a destination being reduced to a monopoly situation will result in improved service or pricing. Rationalizing flights to add even more monopoly service, blocking further competition isn't likely going to fly either.

Here are the European markets from YUL that would instantly become n/s monopolies for the already dominant airline in the market:

LGW
ATH
BCN
BLW
BSL
BOD
LIS
LYS
MAD
AGP
MRS
NTE
NCE
OPO
PRG
FCO
TLS
VCE

One could do the same exercise out of YQB, YYZ and perhaps a couple other domestic gateways, for both Europe and sun destinations. There are many and they are significant.

The reduction of domestic n/s competition, and even 1 stop competition from virtually every market outside YUL. YQB, YYZ, YYC, YVR and a couple of other markets is enormous, and not a scenario the Competition Bureau, or politicians, will be able to ignore, esp in an election year.

Transat is not in any sort of financial predicament. There is no urgency to sell, other than a desire by shareholders to see their $4 shares sell at $13, and the desire of the buyer to further strangle organic, domestic, Canadian owned competition out of two of the largest domestic markets in the country.

I would imagine its going to take the Competition Bureau quite some time to be able to assess the impact of this merger on the competitive marketplace, and determine the various condition, some of them quite onerous, that will have to be made to allow this deal to get done. I wouldn't be at all surprised if the conditions were far to onerous to be bothered.

As for WS / Onex's interest in Transat, my gut tells me a CB led WS would have very little interest in a TS acquisition for all kinds of very good reasons. The reasons that would make it unpalatable to CB don't change with any change of ownership.
 
fraT
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Re: Air Canada in exclusive talks to buy Air Transat

Tue May 21, 2019 5:22 am

jimbo737 wrote:
Competition is not just price, it's QSI. I doubt the Bureau are going to be be bamboozled into believing that replacing a competitive n/s service with one n/s service and a few one stop services, (that already exist), is immaterial in the competitive marketplace.

Take Saskatoon to Faro. Consumers can now fly Saskatoon to Toronto to Faro on either all AC, or WS to YYZ and then then TS to Faro. One stop. They could also fly the route on vastly inferior 2 stop itineraries on any number airlines with a minimum travel time of 17+ hours and as much as 56 hours. Although they are available for sale, it isn't a competitive product.

With a merger of AC and Transat, the competitive options for Canadians, not just price, but QSI based, will be enormously inferior.The Bureau will look at both factors.

No one is going to convince the average Canadian that having 2 companies offering n/s service to a destination being reduced to a monopoly situation will result in improved service or pricing. Rationalizing flights to add even more monopoly service, blocking further competition isn't likely going to fly either.

Here are the European markets from YUL that would instantly become n/s monopolies for the already dominant airline in the market:

LGW
ATH
BCN
BLW
BSL
BOD
LIS
LYS
MAD
AGP
MRS
NTE
NCE
OPO
PRG
FCO
TLS
VCE

One could do the same exercise out of YQB, YYZ and perhaps a couple other domestic gateways, for both Europe and sun destinations. There are many and they are significant.

The reduction of domestic n/s competition, and even 1 stop competition from virtually every market outside YUL. YQB, YYZ, YYC, YVR and a couple of other markets is enormous, and not a scenario the Competition Bureau, or politicians, will be able to ignore, esp in an election year.

Transat is not in any sort of financial predicament. There is no urgency to sell, other than a desire by shareholders to see their $4 shares sell at $13, and the desire of the buyer to further strangle organic, domestic, Canadian owned competition out of two of the largest domestic markets in the country.

I would imagine its going to take the Competition Bureau quite some time to be able to assess the impact of this merger on the competitive marketplace, and determine the various condition, some of them quite onerous, that will have to be made to allow this deal to get done. I wouldn't be at all surprised if the conditions were far to onerous to be bothered.

As for WS / Onex's interest in Transat, my gut tells me a CB led WS would have very little interest in a TS acquisition for all kinds of very good reasons. The reasons that would make it unpalatable to CB don't change with any change of ownership.


Faro is not really a good example since neither AC nor TS are serving it.
In your list there are also some EU destinations which are currently only served by TS (BSL, TLS, NTE, AGP). So there is a nonstop monopoly already in place. Not sure whether that has led to higher fares.
 
jimbo737
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Re: Air Canada in exclusive talks to buy Air Transat

Tue May 21, 2019 5:48 am

Transat starts Faro in Jan 2020 weekly from Toronto.

As it stands, Transat's n/s flight to Faro can be fed by either Air Canada or WestJet from the rest of Canada, thereby resulting in competitive fares for those wishing to fly from any number of cities in Canada. Without doubt, that routing will be the easiest, fastest and most convenient for Canadians.

After the merger, that market becomes a defacto monopoly. All traffic will be forced onto Air Canada, already the dominant international player in Canada. The only alternative for Canadians will be circuitous, inconvenient and likely more expensive routings. This is of no benefit to Canadian consumers, and is this sort of thing, almost on an exponential level, that the Bureau is likely going to have a difficult time swallowing.

The Bureau is interested in market dominance. Transat as a whole, does not dominate any market in Canada. Air Canada obviously does.

If you're going to argue that AC does not already have market dominance in YUL, and that the merger would not result in even further dominance, we might as well begin a debate as to whether or not the earth is round.
 
fraT
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Re: Air Canada in exclusive talks to buy Air Transat

Tue May 21, 2019 7:01 am

I am not arguing that a merged AC/TS would have a dominant position especially out of YUL. However bringing up the example of YXE-FAO is ridiculous because you are talking about an O/D which currently has tons of 2-stop connections and only an announcement for next year, which would bring it to a one-stop connection. With the current set-up, passengers would need to buy two tickets (either AC/TS or WS/TS) risking getting in trouble when a misconnex would happen. So to me the number of potential passengers (not only on this O&D) makes this not a valid point.
 
Dominion301
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Re: Air Canada in exclusive talks to buy Air Transat

Tue May 21, 2019 12:25 pm

jimbo737 wrote:
Transat starts Faro in Jan 2020 weekly from Toronto.

As it stands, Transat's n/s flight to Faro can be fed by either Air Canada or WestJet from the rest of Canada, thereby resulting in competitive fares for those wishing to fly from any number of cities in Canada. Without doubt, that routing will be the easiest, fastest and most convenient for Canadians.

After the merger, that market becomes a defacto monopoly. All traffic will be forced onto Air Canada, already the dominant international player in Canada. The only alternative for Canadians will be circuitous, inconvenient and likely more expensive routings. This is of no benefit to Canadian consumers, and is this sort of thing, almost on an exponential level, that the Bureau is likely going to have a difficult time swallowing.

The Bureau is interested in market dominance. Transat as a whole, does not dominate any market in Canada. Air Canada obviously does.

If you're going to argue that AC does not already have market dominance in YUL, and that the merger would not result in even further dominance, we might as well begin a debate as to whether or not the earth is round.


Who in the hell is going to fly AC or WS to YYZ or YUL and self-connect to a weekly TS flight? If you misconnect you're on your own. You'd have to be insane/desperate to take on that amount of risk.

As for AC dominating YUL, well as AC built up YUL, WS retreated. You can't blame AC for WS' lack of understanding and/or lack of desire as to how to serve francophone-heavy markets. You can't poo poo AC and cry 'monopoly' for flying 767s on YUL-FLL while simultaneously saying WS are 'smart' for pulling all YUL-Florida flying to avoid chasing after 'trash'. You can't have it both ways. Also, TS themselves have become a non-entity in many markets outside of YYZ and YUL. TS pulled out of Sask, and now out of YLW, haven't flown transatlantic from YHZ, YOW or YEG in years (do they even flying across the pond out of YYC any longer?) and are the #3 or #4 in all of those markets to sun destinations. Even in Quebec, they pulled out of places like YUY, where Sunwing now have a monopoly.
 
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longhauler
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Re: Air Canada in exclusive talks to buy Air Transat

Tue May 21, 2019 12:29 pm

Air Canada acquiring Air Transat could only help westjet in Quebec. Let's face it, the teal team is pathetic at best when considering La Belle Province.

If AC were to abuse a monopoly of low yield vacation destinations to internal France and southern Europe out of YUL, then they deserve another airline jumping in on the markeet.

Who knows, westjet may actually find a place to fly those new expensive Boeings heading their way.
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Aircellist
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Re: Air Canada in exclusive talks to buy Air Transat

Tue May 21, 2019 1:21 pm

Well, the monopoly argument is not quite as solid as it seems, because most French province cities are already in a monopoly situation. For instance: AC does not fly to TLS.
"When I find out I was wrong, I change my mind. What do you do?" -attributed to John Maynard Keynes
 
edmountain
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Re: Air Canada in exclusive talks to buy Air Transat

Tue May 21, 2019 1:41 pm

jimbo737 wrote:
Transat starts Faro in Jan 2020 weekly from Toronto.

As it stands, Transat's n/s flight to Faro can be fed by either Air Canada or WestJet from the rest of Canada, thereby resulting in competitive fares for those wishing to fly from any number of cities in Canada. Without doubt, that routing will be the easiest, fastest and most convenient for Canadians.

After the merger, that market becomes a defacto monopoly. All traffic will be forced onto Air Canada, already the dominant international player in Canada. The only alternative for Canadians will be circuitous, inconvenient and likely more expensive routings. This is of no benefit to Canadian consumers, and is this sort of thing, almost on an exponential level, that the Bureau is likely going to have a difficult time swallowing.

The Bureau is interested in market dominance. Transat as a whole, does not dominate any market in Canada. Air Canada obviously does.

If you're going to argue that AC does not already have market dominance in YUL, and that the merger would not result in even further dominance, we might as well begin a debate as to whether or not the earth is round.

Ridiculous. By that logic Air Canada should never be allowed to fly anywhere in Europe lest they lure connecting passengers off of WestJet.

Sounds like you're looking for government intervention in the market to compensate for WestJet's inability to succeed east of Toronto.
 
cskok8
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Re: Air Canada in exclusive talks to buy Air Transat

Tue May 21, 2019 1:51 pm

Good, a merger of airlines with vast experience in gliding
 
IADCA
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Re: Air Canada in exclusive talks to buy Air Transat

Tue May 21, 2019 2:06 pm

Aircellist wrote:
Well, the monopoly argument is not quite as solid as it seems, because most French province cities are already in a monopoly situation. For instance: AC does not fly to TLS.


Which makes any analysis of TLS irrelevant, or nearly so. The way these analyses work is that the Bureau (like any other competition authority) primarily focuses on markets where the parties overlap.
 
jimbo737
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Re: Air Canada in exclusive talks to buy Air Transat

Tue May 21, 2019 2:07 pm

One can quibble incessantly with any city pair chosen and poo poo the concept that a merger doesn’t change the current competitive outlook. Even the most obtuse casual observer isn't going to buy into that concept. People on this board are anything but casual observers.

Reducing competition over the non-stop pairings previously noted, not to mention a similar roster of cities from YYZ is going to impact both pricing and service levels, and fortify an already fortress type situation in 2 of the 3 largest Canadian markets in Canada.

That alone, is going to further reduce the likelihood of meaningful competition down the road. That’s going to be of concern to the Bureau.

Those hungering for the deal have good financial reason to do so, (a reduction of competitive service will drive prices higher, hopefully leading to higher corporate profits at the expense of consumer choice), and those reasons will attract the attention of the Bureau.

They will need to assess how the merger impacts travel options and choices, both price and QSI service levels, from not just Montreal, Quebec City and Toronto, but ALL airports in Canada.

If the merger impacts viable and preferable routings, in terms of both price, convenience and total trip time for someone in Moncton, Sault, Thunder Bay, Winnipeg, Regina, Edmonton, Kelowna or Victoria, it’s going to be an issue.

Suggesting a current one stop, domestic routing to NCE, from YWG is easily replaced by a two stop, dramatically more complex YWG-MSP-CDG-NCE routing won’t garner much sympathy from the Bureau.

The Bureau’s mandate is to protect all Canadians from anti competitive activity, not just those in Toronto and Montreal..

WS isn’t in YUl-FLL for the same reason that Alaska Airlines left the YVR-LAX market. Even with lower stage length adjusted unit costs and 90%+ loads, there was no point trying to “compete” with an airline that was prepared to dump its chronic seasonal excess capacity in the market and price it on a variable cost basis to chase marketshare.

Both AS and WS still don’t have enough capacity to be in all places at all times, and certainly don’t have the excess seasonal capacity AC wallows in for 6-7 months a year. They, and others, put their capacity where the returns are the greatest.

Compared to the ROC, Quebecers have a dramatically lower propensity to fly domestically. They take far fewer domestic trips per capita and when YYZ is removed from the equation, the numbers plummet even further. Compounding this is the lack of “internal” flights within Quebec. For a land mass the size of Quebec, they are minuscule. New entrants, especially those whose strategies are coordinated from outside Canada, don’t understand this.

Those touting the merger are already arguing that the various new entrants, (of which precisely one is now operating), none of which are based within 1,750 miles of Quebec, will able to break into the fortress that is the Quebec market, more meaningfully than WS who operate about 15 departures a day from Montreal after close to 20 years with the lowest stage length adjusted unit costs in Canada are out of their gourds. They’ll have to dream up better arguments than that in their submissions to the Bureau.

If you’re an AC or Transat employee or shareholder, or you are employed by any of the mostly bank owned investment houses in Canada, you’re obviously going to be a strong supporter of this deal.

Alas, in the grand scheme of things, that group represents a very, very small percentage of Canadians.

With an election coming up that will most likely result in a minority gov’t that won’t want anything to do with an anti consumer file that could upset a precariously balanced future political coalition, and in a world where even the most trivial airline customer abuse story from “big, bad airlines” regularly makes front page news, approving any competition reducing deal such as this is going to problematic at higher echelons.

It’s a fairly safe bet this won’t get done prior to the election for basically the same reasons as above. If YOU were trying to get elected / re-elected, would YOU want to touch this file, directly or indirectly,with a 10 foot barge pole?
Last edited by jimbo737 on Tue May 21, 2019 2:22 pm, edited 2 times in total.
 
westaust
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Re: Air Canada in exclusive talks to buy Air Transat

Tue May 21, 2019 2:17 pm

As it's been mentionned in previous posts, there is a few european destinations that TS flies to that AC doesn't go, like BSL for instance, or even LGW. And where there is competition, many of them TS flew them first, and a year after AC came in with Rouge to compete against TS, in some cases, it even led to TS withdrawing from the route (TLV for instance)

As for WS inability to compete in Quebec, it started with a lack of french speaking cabin crew, which is a major point if you want to get leisure travelers to sun destinations, and then they never properly set up their vacations package offering to go against TS, AC and WG, and even that is an area where AC wants to grow and is part of the motivation of buying TS, their presence in the vacation package is better and more footprint at travel agents than AC. If Onex is serious about WS becoming a true competitor to AC, they will find a way to benefit from the proposed merger of AC and TS and come in with a second attempt at capturing the quebec market and not just try to feed flights going through YYZ or YYC
 
jimbo737
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Re: Air Canada in exclusive talks to buy Air Transat

Tue May 21, 2019 2:26 pm

This all suggests WS is desperate to grow in the Quebec market and will do anything, including an internal culture destroying, cost escalating deal to do so.

I’m not convinced that is the case. Not by a long shot.

But that doesn’t alter the fact that an AC/TS merger would significantly reduce competition and service quality within Canada.

These are two unrelated issues, folks.
 
samuelx88
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Re: Air Canada in exclusive talks to buy Air Transat

Tue May 21, 2019 3:19 pm

AC added today YQB-PUJ and YQB-CUN on Rouge 1x weekly, both of which are also on TS. It seems like AC wants to prepare Quebecers to fly on AC rouge instead of TS following a purchase of the company. And it is weird because it is the first time in more than 15 years that AC adds a new destination from YQB.
 
Trip
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Re: Air Canada in exclusive talks to buy Air Transat

Tue May 21, 2019 5:47 pm

jimbo737 wrote:
This all suggests WS is desperate to grow in the Quebec market and will do anything, including an internal culture destroying, cost escalating deal to do so.


WS has already engaged in internal culture destroying and cost escalation, hasn’t it?
 
Dominion301
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Re: Air Canada in exclusive talks to buy Air Transat

Wed May 22, 2019 1:20 am

Trip wrote:
jimbo737 wrote:
This all suggests WS is desperate to grow in the Quebec market and will do anything, including an internal culture destroying, cost escalating deal to do so.


WS has already engaged in internal culture destroying and cost escalation, hasn’t it?


Onex destroying WS’ culture remains to be seen. The company has been “growing up” aka unionizing. It made the last guy so mad that he quit.
 
Whiteguy
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Re: Air Canada in exclusive talks to buy Air Transat

Wed May 22, 2019 3:32 am

Dominion301 wrote:
Trip wrote:
jimbo737 wrote:
This all suggests WS is desperate to grow in the Quebec market and will do anything, including an internal culture destroying, cost escalating deal to do so.


WS has already engaged in internal culture destroying and cost escalation, hasn’t it?


Onex destroying WS’ culture remains to be seen. The company has been “growing up” aka unionizing. It made the last guy so mad that he quit.


Part of Onex reasoning for buying WS was specifically for its culture....not sure the last guy “quit” but angry one is still around.
 
ac7e7
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Re: Air Canada in exclusive talks to buy Air Transat

Wed May 22, 2019 3:33 am

jimbo737 wrote:
This all suggests WS is desperate to grow in the Quebec market and will do anything, including an internal culture destroying, cost escalating deal to do so.

I’m not convinced that is the case. Not by a long shot.

But that doesn’t alter the fact that an AC/TS merger would significantly reduce competition and service quality within Canada.

These are two unrelated issues, folks.



You seem very concerned that AC will dominate certain markets if they are allowed to acquire TS, and charge higher fares once AT is out of the way. However, I don’t see the same level of concern from you re Westjet’s alleged predatory behaviour against Flair.

Are you telling me that Swoop (assuming it still exists once they are done driving Flair and others out of business) will maintain their fares at current levels, even if they are the only carrier flying the route?
 
jimbo737
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Re: Air Canada in exclusive talks to buy Air Transat

Wed May 22, 2019 3:44 am

Yup.

With Swoops fully allocated, stage length adjusted cost structure, which remains significantly lower than any competitor, including Flair, Swoop can continue doing what they’re doing in perpetuity.

That Flair is whining about Swoop when Flair were operating with much, much higher unit costs is indicative of Flair’s naïveté in the marketplace.

It would not serve Swoop’s strategic goal to do anything but continue with the program.

What is AC’s goal? Check out the price differential booking an AC operated trans-border flight with a UAL code on the UAL website.

Note that one needs a US address and zip code matching the CC to access these dramatically lower fares that are not available to Canadians on the same iron, the same day, on the same flight, for the same seat.

It’s pretty obvious what AC’s plan is. Higher fares for Canadians.
 
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longhauler
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Re: Air Canada in exclusive talks to buy Air Transat

Wed May 22, 2019 12:29 pm

jimbo737 wrote:
But that doesn’t alter the fact that an AC/TS merger would significantly reduce competition and service quality within Canada.

Transat currently has less than 2% of the market share within Canada. Soooo .... a possible reduction of competition of 2%? :roll:

jimbo737 wrote:
What is AC’s goal? Check out the price differential booking an AC operated trans-border flight with a UAL code on the UAL website.

Note that one needs a US address and zip code matching the CC to access these dramatically lower fares that are not available to Canadians on the same iron, the same day, on the same flight, for the same seat.

It’s pretty obvious what AC’s plan is. Higher fares for Canadians.


Not sure why you are bringing up the US. Maybe because your argument is flat with regard to domestic or international markets?

It is not uncommon for fares to change with regard to the country of origin for the passenger. All airlines do it, try it on say British Airways, you'll see a difference between international markets depending on the origin of the passenger. Same day, same iron, same flight, same seat.

Maybe when westjet grows up and becomes a real airline, they will do the same thing.

But .... "Higher fares for Canadians". Westjet better hope so. I notice that the last half dozen fare and fee increases have been initiated by westjet. Maybe if Air Canada increases fares, they can tag along and not be the "bad guy" for once!

It is unlikely that acquiring Transat with so limited overlap is going change fares any great amount. The only real overlap is the Quebec to southern vacation spots market. As I said before, AC has to be careful not to abuse any monopolies. But, it would allow an opportunity for westjet to get into the Quebec market.

They can pretend they don't want it, because they are so pathetic at it. It is however, a third of the country's market and a huge profit area.
Just because I stopped arguing, doesn't mean I think you are right. It just means I gave up!
 
IADCA
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Re: Air Canada in exclusive talks to buy Air Transat

Wed May 22, 2019 1:50 pm

longhauler wrote:
jimbo737 wrote:
But that doesn’t alter the fact that an AC/TS merger would significantly reduce competition and service quality within Canada.

Transat currently has less than 2% of the market share within Canada. Soooo .... a possible reduction of competition of 2%? :roll:


It's not quite that simple. Market share is not always an accurate proxy for competitive influence, and in any event, 2% occasionally matters when concentration is already high. That's rather the point of the Herfindahl-Hirschman index being exponential.
 
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767333ER
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Re: Air Canada in exclusive talks to buy Air Transat

Wed May 22, 2019 2:37 pm

jimbo737 wrote:
Yup.

With Swoops fully allocated, stage length adjusted cost structure, which remains significantly lower than any competitor, including Flair, Swoop can continue doing what they’re doing in perpetuity.

That Flair is whining about Swoop when Flair were operating with much, much higher unit costs is indicative of Flair’s naïveté in the marketplace.

It would not serve Swoop’s strategic goal to do anything but continue with the program.

What is AC’s goal? Check out the price differential booking an AC operated trans-border flight with a UAL code on the UAL website.

Note that one needs a US address and zip code matching the CC to access these dramatically lower fares that are not available to Canadians on the same iron, the same day, on the same flight, for the same seat.

It’s pretty obvious what AC’s plan is. Higher fares for Canadians.

Nothing can be done in perpetuity. But I’ve heard rumours from around that WS will often book up half of a Flair flight and then cancel as late as possible causing their flights to be pretty empty and another one about the guys at swoop parking their ground equipment in places that blocks Flair from easily getting where they need to go. If this were the case of course Sounds ridiculous but I wouldn’t put it past a Calgary company, we are cowtown after all and that is how a cowboy would do business.

If this is AC’s goal to raise ticket price, it won’t work. TS only flew to a few specific types of destination where there still will be other competition so tell me how that would affect the price if I wanted to go YYC to YVR for example.
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longhauler
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Re: Air Canada in exclusive talks to buy Air Transat

Wed May 22, 2019 2:57 pm

IADCA wrote:
It's not quite that simple. Market share is not always an accurate proxy for competitive influence, and in any event, 2% occasionally matters when concentration is already high. That's rather the point of the Herfindahl-Hirschman index being exponential.

I could see that if it were, say, 10%. And that 10% was found in very high profit areas. I say less than 2% as the source I to which I was referring only goes down to 2%. As Transat was grouped into the "other" category, they must have been less than 2%. I have heard 1% but can find no source for that.

But in reality, the only reason Transat is flying domestically, is to move aircraft around Canada to position for international travel. I could see an effect if that less than 2% were just YYZ-YUL or YYZ-YVR, but it all across Canada.

For the record, in 2018, AC was 46%, WS was 34% ... so AC would bump up to less than 48%. I'd be surprised at any effect.
Just because I stopped arguing, doesn't mean I think you are right. It just means I gave up!

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