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codyul
Posts: 123
Joined: Wed Feb 07, 2018 6:43 pm

Re: Air Canada/Air Transat Merger Receives Negative Report from Competition Bureau

Sun Mar 29, 2020 1:46 am

beechnut wrote:
codyul wrote:
Again totally agree. Legault will be negotiating at what expense to sell Transat to AC. He will not let that darling company (not to mention his own personal baby) go completely bust with no solution.


Also possible. Another possibility is negotiating an extension to the deadline on the deal if both parties agree, but I suspect Transat won't survive long if it has to ground itself for more than a few weeks.

The next month will be very interesting.

Beech

Moi aussi je pense que dans un mois, peut être un peu plus, on saura à quel point tout aviation va changer au Canada.
I'm that one in a hundred that is thinking that things will shuffle but it won't be airline apocalypse.
YUL PNC :weightlifter:
 
Nicknuzzii
Posts: 1249
Joined: Sat Sep 15, 2018 5:57 pm

Re: Air Canada/Air Transat Merger Receives Negative Report from Competition Bureau

Sun Mar 29, 2020 1:48 am

Does Air Transat perform well?
 
Salomon
Posts: 207
Joined: Thu Jun 29, 2006 2:18 am

Re: Air Canada/Air Transat Merger Receives Negative Report from Competition Bureau

Sun Mar 29, 2020 1:52 am

beechnut wrote:
codyul wrote:
Again totally agree. Legault will be negotiating at what expense to sell Transat to AC. He will not let that darling company (not to mention his own personal baby) go completely bust with no solution.


Also possible. Another possibility is negotiating an extension to the deadline on the deal if both parties agree, but I suspect Transat won't survive long if it has to ground itself for more than a few weeks.

The next month will be very interesting.

Beech


Word on the street is that after the layoffs take place and they successfully reduce all their other fixed costs, Transat has accumulated enough liquidity over the years to survive from 6 month to a year, depending on if you take credit lines into account.
Takeoffs are optional; landings are mandatory.
 
IADCA
Posts: 2191
Joined: Mon Feb 26, 2007 12:24 am

Re: Air Canada/Air Transat Merger Receives Negative Report from Competition Bureau

Sun Mar 29, 2020 1:55 am

codyul wrote:
beechnut wrote:
codyul wrote:
Again totally agree. Legault will be negotiating at what expense to sell Transat to AC. He will not let that darling company (not to mention his own personal baby) go completely bust with no solution.


Also possible. Another possibility is negotiating an extension to the deadline on the deal if both parties agree, but I suspect Transat won't survive long if it has to ground itself for more than a few weeks.

The next month will be very interesting.

Beech

Moi aussi je pense que dans un mois, peut être un peu plus, on saura à quel point tout aviation va changer au Canada.
I'm that one in a hundred that is thinking that things will shuffle but it won't be airline apocalypse.


The bold bit. It's going to take well more than a month.
 
codyul
Posts: 123
Joined: Wed Feb 07, 2018 6:43 pm

Re: Air Canada/Air Transat Merger Receives Negative Report from Competition Bureau

Sun Mar 29, 2020 2:00 am

IADCA wrote:
codyul wrote:
beechnut wrote:

Also possible. Another possibility is negotiating an extension to the deadline on the deal if both parties agree, but I suspect Transat won't survive long if it has to ground itself for more than a few weeks.

The next month will be very interesting.

Beech

Moi aussi je pense que dans un mois, peut être un peu plus, on saura à quel point tout aviation va changer au Canada.
I'm that one in a hundred that is thinking that things will shuffle but it won't be airline apocalypse.


The bold bit. It's going to take well more than a month.

True that! But may have a better idea. Or just more time to come up with hypothesis :spin:
YUL PNC :weightlifter:
 
Dominion301
Posts: 2853
Joined: Wed Jul 20, 2016 1:48 pm

Re: Air Canada/Air Transat Merger Receives Negative Report from Competition Bureau

Sun Mar 29, 2020 2:58 am

whywhytee wrote:
If the merger does go ahead, would this be an opportunity for WestJet to try and build up some presence at YUL and YFB? I know their last attempt at YUL failed, but maybe after losing an airline there will be more space for competition.


YFB? I'm guessing you meant to say YQB? I doubt WS have any interest in serving Iqaluit...aka the combi capital of the world.
 
whywhytee
Posts: 51
Joined: Fri Jan 03, 2020 4:50 pm

Re: Air Canada/Air Transat Merger Receives Negative Report from Competition Bureau

Sun Mar 29, 2020 2:52 pm

Dominion301 wrote:
whywhytee wrote:
If the merger does go ahead, would this be an opportunity for WestJet to try and build up some presence at YUL and YFB? I know their last attempt at YUL failed, but maybe after losing an airline there will be more space for competition.


YFB? I'm guessing you meant to say YQB? I doubt WS have any interest in serving Iqaluit...aka the combi capital of the world.

Lol yes I meant Quebec City, not Iqaluit
 
Skywatcher
Posts: 890
Joined: Sat Sep 14, 2002 11:19 am

Re: Air Canada/Air Transat Merger Receives Negative Report from Competition Bureau

Sun Mar 29, 2020 4:06 pm

Don't forget that there is a $40 million break fee payable by Air Canada if they walk away from the deal. That would provide a fair bit of additional liquidity to Transat to weather the storm.
 
jimbo737
Posts: 536
Joined: Mon Jan 18, 2016 12:18 am

Re: Air Canada/Air Transat Merger Receives Negative Report from Competition Bureau

Sun Mar 29, 2020 6:01 pm

$40m is a rounding error at AC. The company did $18b in revenue in 2019.

On the other hand, $40m to TS gives them a get out of jail free card for maybe a quarter as the market slowly spools back to whatever is the new normal is down the road.

AC may have already experienced the nightmare of a forced acquisition 20 years ago. Calin saw what that did to AC for the better part of a decade. I wouldn’t be betting that he’d willingly or unwilling waltz down that path again anytime soon, especially in light of the current, and very literal decimation of the industry.

The US is supporting their airline sector in an enormous way in order to ensure a viable business exists when this mess is over with in the future.

Having the GoC saddle one or the other major domestic network carriers, (or perhaps both) with some sort of Frankenstein merger with the weight of Transat, (an airline that focuses on pure leisure travel with virtually no domestic point to point presence), purely to appease Quebec, knowing that what ever economically viable routes existed would be replicated by the incumbents in short order, and knowing that such a decision would make the Cdn airline sector even less competitive than it’s US brethren, would be the height of stupidity.
 
Dominion301
Posts: 2853
Joined: Wed Jul 20, 2016 1:48 pm

Re: Air Canada/Air Transat Merger Receives Negative Report from Competition Bureau

Sun Mar 29, 2020 6:13 pm

jimbo737 wrote:
$40m is a rounding error at AC. The company did $18b in revenue in 2019.

On the other hand, $40m to TS gives them a get out of jail free card for maybe a quarter as the market slowly spools back to whatever is the new normal is down the road.

AC may have already experienced the nightmare of a forced acquisition 20 years ago. Calin saw what that did to AC for the better part of a decade. I wouldn’t be betting that he’d willingly or unwilling waltz down that path again anytime soon, especially in light of the current, and very literal decimation of the industry.

The US is supporting their airline sector in an enormous way in order to ensure a viable business exists when this mess is over with in the future.

Having the GoC saddling one or the other major domestic network carriers, (or perhaps both), with the weight of Transat, (an airline that focuses on pure leisure travel with virtually no domestic point to point presence), purely to appease Quebec, knowing that what ever economically viable routes existed would be replicated by the incumbents in short order, and knowing that such a decision would make the Cdn airline sector even less competitive than it’s US brethren, would be the height of stupidity.


I still think the AC acquisition of TS will go through. Here's why I think it'll get green lighted by TC: the 7F-5T merger was soundly rejected by the Competition Bureau, yet TC accepted it with conditions imposed. I expect TC to do the same here - impose conditions. Would imagine that would include no route cuts on ex-TS routes (i.e. operate at minimum seasonally) and no fare increases beyond the rate of inflation on routes where they 'used' to compete with each other for a period of five years, to allow for time for new entrants. Perhaps hotel asset sales to someone like Sunwing.

Like you said Jimbo, if $40M is a rounding error for AC, $600M even with probably 1/20 the usual revenue at present is digestible with AC's +7 billion in liquidity as of Q4 2019. TS have been treading water for years. Even though they have a bunch of ancillary assets, I doubt TS can make it through this crisis without a major rescue package as a stand-alone.
 
Skywatcher
Posts: 890
Joined: Sat Sep 14, 2002 11:19 am

Re: Air Canada/Air Transat Merger Receives Negative Report from Competition Bureau

Sun Mar 29, 2020 9:08 pm

jimbo737 wrote:
$40m is a rounding error at AC. The company did $18b in revenue in 2019.

On the other hand, $40m to TS gives them a get out of jail free card for maybe a quarter as the market slowly spools back to whatever is the new normal is down the road.

AC may have already experienced the nightmare of a forced acquisition 20 years ago. Calin saw what that did to AC for the better part of a decade. I wouldn’t be betting that he’d willingly or unwilling waltz down that path again anytime soon, especially in light of the current, and very literal decimation of the industry.

The US is supporting their airline sector in an enormous way in order to ensure a viable business exists when this mess is over with in the future.

Having the GoC saddle one or the other major domestic network carriers, (or perhaps both) with some sort of Frankenstein merger with the weight of Transat, (an airline that focuses on pure leisure travel with virtually no domestic point to point presence), purely to appease Quebec, knowing that what ever economically viable routes existed would be replicated by the incumbents in short order, and knowing that such a decision would make the Cdn airline sector even less competitive than it’s US brethren, would be the height of stupidity.


Not everybody in Quebec supports the merger. Many like the local homeboy nature of Transat. There are a lot of spinning plates on this one. No matter what happens there will be some specifically dedicated airline support package launched for all Canadian carriers in the near future I suspect.
 
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mercure1
Posts: 4857
Joined: Sun Jul 13, 2008 5:13 am

Re: Confirmed: Air Canada to buy Air Transat

Tue May 26, 2020 5:08 am

Now EU will open full-scale investigation into AC-TS deal over worries purchase could reduce competition on 33 routes.

https://business.financialpost.com/tran ... t-scrutiny
mercure f-wtcc
 
EChid
Posts: 567
Joined: Fri Nov 03, 2017 4:00 am

Re: Confirmed: Air Canada to buy Air Transat

Tue May 26, 2020 3:41 pm

mercure1 wrote:
Now EU will open full-scale investigation into AC-TS deal over worries purchase could reduce competition on 33 routes.

https://business.financialpost.com/tran ... t-scrutiny

Good.
 
wrongwayup
Posts: 442
Joined: Thu Jan 07, 2016 6:23 pm

Re: Confirmed: Air Canada to buy Air Transat

Tue May 26, 2020 4:05 pm

mercure1 wrote:
Now EU will open full-scale investigation into AC-TS deal over worries purchase could reduce competition on 33 routes.

https://business.financialpost.com/tran ... t-scrutiny


Air Canada will be thrilled. If the EU quashes the deal it means they won't have to pay their break fee to avoid paying way more than the airline is now (in a COVID world) worth.
 
jomur
Posts: 361
Joined: Sun Jun 19, 2016 6:36 pm

Re: Confirmed: Air Canada to buy Air Transat

Tue May 26, 2020 8:36 pm

mercure1 wrote:
Now EU will open full-scale investigation into AC-TS deal over worries purchase could reduce competition on 33 routes.

https://business.financialpost.com/tran ... t-scrutiny


The EU is having a laugh. I reckon most of those 33 routes won't be flown by both now anyway even if Air Canada was not taking over Air Transit.
 
IADCA
Posts: 2191
Joined: Mon Feb 26, 2007 12:24 am

Re: Confirmed: Air Canada to buy Air Transat

Tue May 26, 2020 9:33 pm

wrongwayup wrote:
mercure1 wrote:
Now EU will open full-scale investigation into AC-TS deal over worries purchase could reduce competition on 33 routes.

https://business.financialpost.com/tran ... t-scrutiny


Air Canada will be thrilled. If the EU quashes the deal it means they won't have to pay their break fee to avoid paying way more than the airline is now (in a COVID world) worth.


I'd be astounded if a block based on antitrust grounds got them out of paying the break fee. Indeed, antitrust risk would be the primary reason for having the break fee in the first place.
 
rampbro
Posts: 546
Joined: Wed Nov 28, 2012 4:00 am

Re: Confirmed: Air Canada to buy Air Transat

Tue May 26, 2020 10:24 pm

mercure1 wrote:
Now EU will open full-scale investigation into AC-TS deal over worries purchase could reduce competition on 33 routes.

https://business.financialpost.com/tran ... t-scrutiny


I find it ironic that the EU note that Westjet isn't a strong enough competitor, where the demise of AT would actually provide a more competitive situation for WS IMHO.
 
MIflyer12
Posts: 8310
Joined: Mon Feb 18, 2013 11:58 pm

Re: Confirmed: Air Canada to buy Air Transat

Tue May 26, 2020 11:03 pm

IADCA wrote:
wrongwayup wrote:
mercure1 wrote:
Now EU will open full-scale investigation into AC-TS deal over worries purchase could reduce competition on 33 routes.

https://business.financialpost.com/tran ... t-scrutiny


Air Canada will be thrilled. If the EU quashes the deal it means they won't have to pay their break fee to avoid paying way more than the airline is now (in a COVID world) worth.


I'd be astounded if a block based on antitrust grounds got them out of paying the break fee. Indeed, antitrust risk would be the primary reason for having the break fee in the first place.


I don't find reference to AC being required to pay a break-up fee. Several references speak of a break-up fee payable by Transat if it terminates the deal, such as this one:

https://www.bloomberg.com/press-release ... -agreement

And this AC press release: https://aircanada.mediaroom.com/2019-08 ... o-Brosseau

Anybody?
 
Jetty
Posts: 1307
Joined: Wed Nov 11, 2015 12:27 pm

Re: Confirmed: Air Canada to buy Air Transat

Tue May 26, 2020 11:48 pm

MIflyer12 wrote:
IADCA wrote:
wrongwayup wrote:

Air Canada will be thrilled. If the EU quashes the deal it means they won't have to pay their break fee to avoid paying way more than the airline is now (in a COVID world) worth.


I'd be astounded if a block based on antitrust grounds got them out of paying the break fee. Indeed, antitrust risk would be the primary reason for having the break fee in the first place.


I don't find reference to AC being required to pay a break-up fee. Several references speak of a break-up fee payable by Transat if it terminates the deal, such as this one:

https://www.bloomberg.com/press-release ... -agreement

And this AC press release: https://aircanada.mediaroom.com/2019-08 ... o-Brosseau

Anybody?

No reference indeed, but it would be highly unusual if the party taking over wouldn’t have to pay one. Most likely AC just chose to keep it confidential.
 
ramprat320
Posts: 20
Joined: Sat Aug 08, 2015 8:17 pm

Re: Confirmed: Air Canada to buy Air Transat

Wed May 27, 2020 2:20 am

The terms of the Arrangement Agreement provide for a break fee of $15 million payable by Transat in case of termination of the agreement in certain circumstances, including upon acceptance of a Superior Proposal that is not matched by Air Canada. Under the Arrangement Agreement, a Superior Proposal is defined, in part, as an unsolicited bona fide written acquisition proposal, that is made at a firm price per share equal to or exceeding $14 in cash, that has fully committed financing from a financial institution or similar organization (or is made by a person with adequate cash on hand), and that the Board of Directors of Transat determines in its good faith judgment, after receiving legal and financial advice, would result in a transaction that would be in the best interests of Transat and its stakeholders and be more favourable, from a financial point of view, to Transat shareholders. The terms and conditions for the making of a Superior Proposal and its complete definition are contained in the Arrangement Agreement.

The Arrangement Agreement also provides for the payment by Air Canada of a reverse break fee of a maximum of $40 million in the event that the agreement is terminated because regulatory or governmental approvals are not obtained, subject to certain conditions.
 
IADCA
Posts: 2191
Joined: Mon Feb 26, 2007 12:24 am

Re: Confirmed: Air Canada to buy Air Transat

Wed May 27, 2020 3:07 am

MIflyer12 wrote:
IADCA wrote:
wrongwayup wrote:

Air Canada will be thrilled. If the EU quashes the deal it means they won't have to pay their break fee to avoid paying way more than the airline is now (in a COVID world) worth.


I'd be astounded if a block based on antitrust grounds got them out of paying the break fee. Indeed, antitrust risk would be the primary reason for having the break fee in the first place.


I don't find reference to AC being required to pay a break-up fee. Several references speak of a break-up fee payable by Transat if it terminates the deal, such as this one:

https://www.bloomberg.com/press-release ... -agreement

And this AC press release: https://aircanada.mediaroom.com/2019-08 ... o-Brosseau

Anybody?

'
https://www.cbc.ca/news/business/air-ca ... -1.5192056

"If the deal falls apart, Air Canada would pay a break fee of $40 million to Transat, or Transat would pay $15 million to Air Canada, depending on why the deal fell apart."

https://business.financialpost.com/tran ... anadas-bid
"Air Canada’s break fee, according to the terms of the deal, would be $40 million."

https://www.ctvnews.ca/business/air-can ... -1.4484832

"Air Canada must pay a reverse break fee of up to $40 million if the transaction is cancelled because regulatory or governmental approvals are not obtained, subject to certain conditions."

Need more?
 
wrongwayup
Posts: 442
Joined: Thu Jan 07, 2016 6:23 pm

Re: Confirmed: Air Canada to buy Air Transat

Wed May 27, 2020 7:21 pm

IADCA wrote:
wrongwayup wrote:
mercure1 wrote:
Now EU will open full-scale investigation into AC-TS deal over worries purchase could reduce competition on 33 routes.

https://business.financialpost.com/tran ... t-scrutiny


Air Canada will be thrilled. If the EU quashes the deal it means they won't have to pay their break fee to avoid paying way more than the airline is now (in a COVID world) worth.


I'd be astounded if a block based on antitrust grounds got them out of paying the break fee. Indeed, antitrust risk would be the primary reason for having the break fee in the first place.


Break fees are typically structured such that they are not payable based on factors out of the control of the parties. Regulatory approvals would definitely be one of those.
 
IADCA
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Joined: Mon Feb 26, 2007 12:24 am

Re: Confirmed: Air Canada to buy Air Transat

Wed May 27, 2020 7:45 pm

wrongwayup wrote:
IADCA wrote:
wrongwayup wrote:

Air Canada will be thrilled. If the EU quashes the deal it means they won't have to pay their break fee to avoid paying way more than the airline is now (in a COVID world) worth.


I'd be astounded if a block based on antitrust grounds got them out of paying the break fee. Indeed, antitrust risk would be the primary reason for having the break fee in the first place.


Break fees are typically structured such that they are not payable based on factors out of the control of the parties. Regulatory approvals would definitely be one of those.


I don't know what type of deals you work on, but in my field, regulatory approvals are probably the second most common reason for break fees. When there's significant antitrust risk (as in the Air Canada-Transat deal), the break fee is almost always payable based on regulatory blocks. I've worked on multiple deals in the past few months that had such provisions. And antitrust approvals and the conditions they involve are often very much in the control of the parties in any event.
 
mickster
Posts: 220
Joined: Sat Feb 14, 2009 10:56 am

Re: Confirmed: Air Canada to buy Air Transat

Wed May 27, 2020 8:04 pm

wrongwayup wrote:
Break fees are typically structured such that they are not payable based on factors out of the control of the parties. Regulatory approvals would definitely be one of those.

That is categorically incorrect, and I am in the position to be able to say that because I have sufficient M&A experience - failure to obtain regulatory approval is actually once of the most common reasons why break-up fees become due.
 
wrongwayup
Posts: 442
Joined: Thu Jan 07, 2016 6:23 pm

Re: Confirmed: Air Canada to buy Air Transat

Wed May 27, 2020 8:10 pm

[quote="IADCA"][quote="IADCA"]

[quote="mickster"][quote="mickster"]

I find that shocking. In the world of aircraft transactions, where I usually hang out, we typically use deposits in lieu of break fees (though it has the same net effect as to who keeps the cash in the end) - but those are nearly always returnable in the event of approvals not being received.
 
IADCA
Posts: 2191
Joined: Mon Feb 26, 2007 12:24 am

Re: Confirmed: Air Canada to buy Air Transat

Wed May 27, 2020 8:20 pm

wrongwayup wrote:
IADCA wrote:
IADCA wrote:



Aircraft transactions are a far cry from full M&A activity between direct competitors. That's my field.
 
L10115
Posts: 2
Joined: Tue Feb 02, 2016 5:41 pm

Re: Air Canada/Air Transat Merger Receives Negative Report from Competition Bureau

Wed May 27, 2020 8:34 pm

jimbo737 wrote:
$40m is a rounding error at AC. The company did $18b in revenue in 2019.

On the other hand, $40m to TS gives them a get out of jail free card for maybe a quarter as the market slowly spools back to whatever is the new normal is down the road.

AC may have already experienced the nightmare of a forced acquisition 20 years ago. Calin saw what that did to AC for the better part of a decade. I wouldn’t be betting that he’d willingly or unwilling waltz down that path again anytime soon, especially in light of the current, and very literal decimation of the industry.

The US is supporting their airline sector in an enormous way in order to ensure a viable business exists when this mess is over with in the future.

Having the GoC saddle one or the other major domestic network carriers, (or perhaps both) with some sort of Frankenstein merger with the weight of Transat, (an airline that focuses on pure leisure travel with virtually no domestic point to point presence), purely to appease Quebec, knowing that what ever economically viable routes existed would be replicated by the incumbents in short order, and knowing that such a decision would make the Cdn airline sector even less competitive than it’s US brethren, would be the height of stupidity.

Says The Former Westjet Exec Dumster Diver lol! Looks like AC is hot for some 321 lrs. Jumbo is against it because it doesn’t work for WJA) Time will tell!
 
User avatar
aemoreira1981
Posts: 3616
Joined: Mon Jan 09, 2017 12:17 am

Re: Confirmed: Air Canada to buy Air Transat

Fri May 29, 2020 3:40 am

rampbro wrote:
mercure1 wrote:
Now EU will open full-scale investigation into AC-TS deal over worries purchase could reduce competition on 33 routes.

https://business.financialpost.com/tran ... t-scrutiny


I find it ironic that the EU note that Westjet isn't a strong enough competitor, where the demise of AT would actually provide a more competitive situation for WS IMHO.


You mean TS (AT is Royal Air Maroc). WS is virtually a non-factor in Francophone Canada.
 
Jetport
Posts: 143
Joined: Thu Apr 02, 2015 4:23 pm

Re: Confirmed: Air Canada to buy Air Transat

Wed Jun 03, 2020 3:13 am

Looks like Air Canada is trying to cancel merger:

https://www.flightglobal.com/strategy/a ... 56.article
 
cirrusdragoon
Posts: 231
Joined: Thu Feb 22, 2018 6:42 pm

Re: Confirmed: Air Canada to buy Air Transat

Wed Jun 03, 2020 4:07 am

Jetport wrote:
Looks like Air Canada is trying to cancel merger:

https://www.flightglobal.com/strategy/a ... 56.article


No doubt now.
 
User avatar
aemoreira1981
Posts: 3616
Joined: Mon Jan 09, 2017 12:17 am

Re: Confirmed: Air Canada to buy Air Transat

Wed Jun 03, 2020 4:18 am

Not surprised. AC is in no position to go on a buying spree. However, can TS survive long-term, with the majority of its fleet being wide-body? Their fleet is currently: 16 A332, 4 A333, 9 A321, 3 A21N, and 5 B738. (None are currently flying.) Shedding some of those wide-body leases would go a long way.
 
Airlinerdude
Posts: 191
Joined: Tue Mar 30, 2010 3:07 am

Re: Confirmed: Air Canada to buy Air Transat

Wed Jun 03, 2020 5:39 am

Neither Air Canada nor Transat would comment on the news reports, which first appeared in the French-language daily Journal de Montreal on 2 June. The story cites three sources that say Air Canada is lobbying the Canadian government to block the deal.


You've got to be kidding me... AC trying to lobby the Canadian government to get out of paying an additional $20m?

According to the original agreement, AC is on the hook for $20m for a reverse termination fee if 'Key Regulatory Approval' isn't given, or a total of $40m if the approval is given.

pg. 58: https://www.transat.com/getmedia/b39fdc ... ent-(SEDAR)_1.pdf.aspx
 
L10115
Posts: 2
Joined: Tue Feb 02, 2016 5:41 pm

Re: Confirmed: Air Canada to buy Air Transat

Wed Jun 03, 2020 10:44 am

cirrusdragoon wrote:
Jetport wrote:
Looks like Air Canada is trying to cancel merger:

https://www.flightglobal.com/strategy/a ... 56.article


No doubt now.

Read the Article again! Slowerrrrrrrr!
 
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cougar15
Posts: 1442
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Re: Confirmed: Air Canada to buy Air Transat

Wed Jun 03, 2020 11:51 am

wrongwayup wrote:
mercure1 wrote:
Now EU will open full-scale investigation into AC-TS deal over worries purchase could reduce competition on 33 routes.

https://business.financialpost.com/tran ... t-scrutiny


Air Canada will be thrilled. If the EU quashes the deal it means they won't have to pay their break fee to avoid paying way more than the airline is now (in a COVID world) worth.


The EU prevented UPS (5X) taking over TNT (3V) in 2014, and guess what, that cost 5X the full US$200 Mio break up fee (something I believe they are successfully suing the EU competition watchdogs for now) and 5X had to pay up, saving TNTs bacon for a while until Fedex came around the corner.
What makes you think TS is not going to get the break up fee, exactly such hinderances is why these agreements are in place, regulators in all affected markets need to approve such deals/takeovers.
some you lose, others you can´t win!
 
rampbro
Posts: 546
Joined: Wed Nov 28, 2012 4:00 am

Re: Confirmed: Air Canada to buy Air Transat

Wed Jun 03, 2020 4:13 pm

aemoreira1981 wrote:
rampbro wrote:
mercure1 wrote:
Now EU will open full-scale investigation into AC-TS deal over worries purchase could reduce competition on 33 routes.

https://business.financialpost.com/tran ... t-scrutiny


I find it ironic that the EU note that Westjet isn't a strong enough competitor, where the demise of AT would actually provide a more competitive situation for WS IMHO.


You mean TS (AT is Royal Air Maroc). WS is virtually a non-factor in Francophone Canada.


I did mean TS.

2 things I considered based on your response:

1 - YUL catchment is not exclusively francophone - hell, Montreal is not exclusively francophone.
2 - I agree the WS is not popular in Quebec - that doesn't mean they couldn't be. What changes would need to take place in order for them to capture more of the market? I reckon it would be something like picking up a crew base (of ex TS - AC won't keep them all), dedicating some lift (lots of spare a/c with the oilpatch downturn), identifying the correct branding, and jumping into the chasm left by TS. It makes sense that they wouldn't make those choices while TS is around, and that they would re-evaluate if and when TS disappeared.
Again, my point is not that Westjet is competing in QC, it is that they if they wanted to, they could, in contrast to the EU's statement that they are not strong enough.

Also, and this is a niggly little bit - Westjet seems to do fine in New Brunswick, where a significant percentage of the population is Francophone.
 
Whiteguy
Posts: 1558
Joined: Sat Nov 29, 2003 6:11 am

Re: Confirmed: Air Canada to buy Air Transat

Wed Jun 03, 2020 4:17 pm

The original article wasn’t written by a media outlet that is owned by the third bidder for Air Transat. I wouldn’t lend any credibility to the article.
 
cirrusdragoon
Posts: 231
Joined: Thu Feb 22, 2018 6:42 pm

Re: Confirmed: Air Canada to buy Air Transat

Wed Jun 03, 2020 5:39 pm

Whiteguy wrote:
The original article wasn’t written by a media outlet that is owned by the third bidder for Air Transat. I wouldn’t lend any credibility to the article.


Time will tell.
 
Whiteguy
Posts: 1558
Joined: Sat Nov 29, 2003 6:11 am

Re: Confirmed: Air Canada to buy Air Transat

Wed Jun 03, 2020 5:55 pm

Whiteguy wrote:
The original article wasn’t written by a media outlet that is owned by the third bidder for Air Transat. I wouldn’t lend any credibility to the article.



That should be “was written”.....
 
cirrusdragoon
Posts: 231
Joined: Thu Feb 22, 2018 6:42 pm

Re: Confirmed: Air Canada to buy Air Transat

Thu Jun 04, 2020 6:28 pm

Several analysts are also of the opinion that AC could walk away.

https://business.financialpost.com/tran ... uy-transat


David Ocampo, an analyst at Cormark Securities, Inc., said he questions whether Air Canada still wants to go through with the deal.

“Right now, they’re just in cash preservation mode,” said David Ocampo, an analyst at Cormark Securities, Inc., adding that Air Canada has recently started moving some cargo while its passenger fleet remains idle.

On Tuesday, the company announced a $1.6 billion financing raised from the sale of shares and debt for working capital and other corporate needs.

The all-cash purchase of Transat would eat up nearly half of that cash, noting that the airline industry remains in poor shape even as social distancing policies ease and summer begins, said Ocampo. Air travel is projected to remain down 75 per cent from previous periods by his calculations

Robert Kokonis, managing director of Air Trav Inc., a Toronto-based aviation advisory firm, said he does not believe Air Canada wants a merger in the current business climate.

“I just can’t imagine, right now, Air Canada being desirous of approving that transaction,” said Kokonis, ”both from their shareholders, from their labour, (or) from a treasury perspective.”
 
beechnut
Posts: 934
Joined: Wed Apr 21, 2004 12:27 am

Re: Confirmed: Air Canada to buy Air Transat

Thu Jun 04, 2020 7:30 pm

I can’t see it going through as-is either.

I can only imagine it happening with major government subsidies to prevent TS from going under. And I certainly don’t see any enthusiasm at the federal level.

Beech
 
SpaceshipDC10
Posts: 7054
Joined: Tue Jan 01, 2013 11:44 am

Re: Confirmed: Air Canada to buy Air Transat

Sat Jun 20, 2020 4:17 pm

"EU suspends probe into Air Canada-Transat deal pending more information"

https://www.ctvnews.ca/business/eu-susp ... -1.4991932
 
777luver
Posts: 132
Joined: Fri Jun 26, 2020 2:44 am

Air Canada/Air Transat Revised Transaction Concluded

Sat Oct 10, 2020 4:34 pm

Pending regulatory requirements and the European Commission review

https://www.newswire.ca/news-releases/a ... 96338.html

At $5/AT share.....yikes
 
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mach86
Posts: 6
Joined: Mon Mar 02, 2020 5:41 pm

Re: Air Canada/Air Transat Revised Transaction Concluded

Sat Oct 10, 2020 4:39 pm

Transaction valued at $190 million. A year ago that would be laughable. Today, it's not so funny anymore.
 
beechnut
Posts: 934
Joined: Wed Apr 21, 2004 12:27 am

Re: Updated: Air Canada/Air Transat Revised Transaction Concluded

Sat Oct 10, 2020 5:48 pm

I guess it still beats liquidation for the shareholders... and the provincial government.

Beech
 
cirrusdragoon
Posts: 231
Joined: Thu Feb 22, 2018 6:42 pm

Re: Updated: Air Canada/Air Transat Revised Transaction Concluded

Sat Oct 10, 2020 5:51 pm

at least it provides some relief to some stressed transat employees.
 
codyul
Posts: 123
Joined: Wed Feb 07, 2018 6:43 pm

Re: Updated: Air Canada/Air Transat Revised Transaction Concluded

Sat Oct 10, 2020 6:40 pm

cirrusdragoon wrote:
at least it provides some relief to some stressed transat employees.

I would say a measure of relief, but a whole ballgame begins, pitting AC employees versus Transat employees.
For example, no AC flight attendant will want to stay on furlough while any Transat employees get recalled.
Not to mention Transat working groups were getting the government CEWS program giving them 75% of salary to stay home. AC employees were laid off and got max 2000$/month taxable CERB/ei.
Interesting how this will turn out.
YUL PNC :weightlifter:
 
ExMilitaryEng
Posts: 637
Joined: Mon May 01, 2017 7:12 pm

Re: Updated: Air Canada/Transat A.T. Inc. Conclude Amended Transaction for Combination of the Two Companies

Sat Oct 10, 2020 7:27 pm

Indeed, it will be again a complex integration. Until this is settled, AC will have to operate Transat as a seperate entity while tweaking scheduling and route duplications. (But then, any route cancellation will enrage the impacted union / group of employees)

For those who recall, it was somewhat tricky to integrate the Canadian Airlines pilots - which had relatively high seniority (Canadian had been more contracting than expending in its last legs).
AC's pilots saw that as unfair as Canadian was basically the bankrupt entity to start with.
 
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CrewBunk
Posts: 100
Joined: Sat Nov 18, 2017 3:12 am

Re: Updated: Air Canada/Transat A.T. Inc. Conclude Amended Transaction for Combination of the Two Companies

Sat Oct 10, 2020 9:13 pm

With regard to the Air Canada / Canadian Airlines acquisition, one has to look at the intent; namely, what did Air Canada want?

At the time, the Minister of Transport, David Collinette stated publicly (but really aimed at Air Canada) that if Canadian Airlines shut down, Air Canada would not “automatically” get Canadian’s international route authorities. Air Transat was public about wanting the South America routes, Canada 3000 the South Pacific, Royal had eyes on several European routes.

The only given was CP’s Asian routes. And, another fly in the ointment .... at the time NRT slots were the most valuable on the earth and CP had 6 daily slots. The Japanese Government stated that if CP shut down, the NRT slots would go back to them, and any new Canadian carrier would “get in line” to apply.

The only way AC could be assured all of CP’s international authorities, including the NRT slots was to buy all of CP, keep it going, and merge operations. THAT is what AC wanted, and that is what they got.

So look today. AC could easily have backed out of the Transat acquisition with minimal penalties. But they didn’t. So again, one has to ask ..... Why? What is on the table that they want?

It could be something as mundane as Transat’s fleet would fit nicely ..... to something more sinister. Keeping a well known Quebec company out of the hands of Westjet/Onex. Let’s face it, Westjet’s Quebec operations are pathetic at best. Give them a Quebec company, liked by québécois, and it would scare the crap out of AC!

Only those at AC’s board in YUL HQ, know for sure. We though, have front row seats. Get the popcorn.
 
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aemoreira1981
Posts: 3616
Joined: Mon Jan 09, 2017 12:17 am

Re: Updated: Air Canada/Transat A.T. Inc. Conclude Amended Transaction for Combination of the Two Companies

Sat Oct 10, 2020 9:35 pm

The loser in all of this may be Boeing. I expect that AC will order more A320neo/321neo planes instead of the MAX. (The A321LR is definitely a long and thin plane from YUL to secondary France.) I also see more A330-300s being added but not the age of most of the TS A330 fleet, giving an A333 fleet of reasonable size. The B788 fleet can then head to Rouge, freeing up B789s for TPAC, India, Israel, and some transcontinental (like LAX, SFO, and EWR).
 
EdmFlyBoi
Posts: 6
Joined: Fri Jul 31, 2020 5:58 pm

Re: Updated: Air Canada/Transat A.T. Inc. Conclude Amended Transaction for Combination of the Two Companies

Sat Oct 10, 2020 9:50 pm

aemoreira1981 wrote:
The loser in all of this may be Boeing. I expect that AC will order more A320neo/321neo planes instead of the MAX. (The A321LR is definitely a long and thin plane from YUL to secondary France.) I also see more A330-300s being added but not the age of most of the TS A330 fleet, giving an A333 fleet of reasonable size. The B788 fleet can then head to Rouge, freeing up B789s for TPAC, India, Israel, and some transcontinental (like LAX, SFO, and EWR).


The 788's are not going to Rouge. AC clearly stated in the last quarter report that Rouge would be a narrow body carrier. With the addition of Transat, the A332's can take on the leisure flying without too much work necessary on the interiors. Additionally, there are a number of mainline routes for which the 788 is the right size.
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