AC and TRZ Agree to Terminate Arrangement

[skypirate88]

On the investor call CR said they are in receipt of the assessment but will reserve further comment.

[Kapitanov]

On another note, May 2nd passed, which means Transport Canada (should) has made its recommendation to Minister Garneau. I don't think the info was supposed to go public, and obviously it didn't. BUT, Air Canada CEO and CFO will host a conference call and a webcast tomorrow on May 4th, 2020 at 08:30 ET to announce Air Canada's first quarter 2020 financial results.

Talk about good timing! My guess, tomorrow might be a turning point about the outcome of this transaction. Investors want to know what's the plan and what's really gonna happen with the deal and now that AC is aware of the decision of TC I guess, that conference call could be the perfect occasion to announce big news to the market. There is also a webcast the next day for AC employees only.

Links to the webcast on the AC investor relations page: https://www.aircanada.com/ca/en/aco/hom ... tions.html

Anyhow, stay tuned tomorrow!

If AC doesn’t deal with the Transat transaction during their presentation, someone will ask. There is a good chance the answer will be evasive though. My expectation is continued silence on the subject as AC’s options are still being mulled.

The conference call the next day is to explain to employees the fall out of what will be announced tomorrow. Probably thousands of job losses. I doubt the Transat transaction will be on many AC employee minds. I’m thinking tomorrow there will be thousands of AC employees who will suddenly be wondering how they will feed their family. The last thing they will want to have rubbed in their wound is that they will have to compete with employees from a different company to be recalled.

So for a couple of reasons your thirst for vision on the transaction may not be quenched.

Yup, you were right. They just said during the webcast that they indeed received the answer from Transport Canada, and they are now waiting for the European committee to state on the transaction. Therefore, they "reserve further comment on the transaction".

And from the AC analysis of results: "Furthermore, the acquisition of Transat A.T. Inc. is subject to regulatory approvals and certain customary conditions, and there are no assurances that the acquisition will be completed as described in this MD&A or at all. The forward-looking statements contained or incorporated by reference in this MD&A represent Air Canada's expectations as of the date of this MD&A (or as of the date they are otherwise stated to be made) and are subject to change after such date. However, Air Canada disclaims any intention or obligation to update or revise any forward-looking statements whether because of new information, future events or otherwise, except as required under applicable securities regulations. "

Wait and see!

[Localizer]

AC Investor relations call was interesting .. It sounds like management has a solid plan to navigate through the dark times. The E190, 319, 767's are all gone, E190 will depart immediately, so roughly 76 a/c leaving the fleet. A new PR program is being launched to reassure the public that a/c are clean and safe. Rouge is going to take a big hit with fleet reduction and transform into a narrow body fleet, current wide body leisure flying will be done by mainline.

They discussed the steps of the Transat acquisition and where the process is currently at .. but reserved comment on the topic for now.

[jetpilot]

In my understanding this look like the plan from the begining That Rouge become a more local carrier with narrow body aircraft.

[Sharklasers]

In my understanding this look like the plan from the begining That Rouge become a more local carrier with narrow body aircraft.

[Co-Joe Exotic]

Let us know when you spot the table trays being removed from the Buses. That will have AC written all over it.

[Fanblade]

They discussed the steps of the Transat acquisition and where the process is currently at .. but reserved comment on the topic for now.

Figured. Nothing focuses the mind like a hanging in the morning.

Not making a statement to reaffirm their commitment to the Transat transaction just put the anxiety level about its completion up 5 notches.

Look up burning platform.

Doesn’t mean the transaction won’t happen. Just means the sharks are circling.

And by the way guys “no comment” is perfectly legal. It’s about the only legal thing they could say and still stoke anxiety about the deal.

[rudder]

They discussed the steps of the Transat acquisition and where the process is currently at .. but reserved comment on the topic for now.

Figured. Nothing focuses the mind like a hanging in the morning.

Not making a statement to reaffirm their commitment to the Transat transaction just put the anxiety level about its completion up 5 notches.

Look up burning platform.

Doesn’t mean the transaction won’t happen. Just means the sharks are circling.

And by the way guys “no comment” is perfectly legal. It’s about the only legal thing they could say and still stoke anxiety about the deal.

Take a closer look at the call transcript when it comes out.

Yes - commentary on the TRZ transaction was specifically “no comment”.

But read the CR response to a question about potential growth by acquisition (in the hypothetical). Interesting.

[aerodude]

Yes - commentary on the TRZ transaction was specifically “no comment”.

But read the CR response to a question about potential growth by acquisition (in the hypothetical). Interesting.

He did say it was foolish to think about other acquisitions in these times.

[Fanblade]

They discussed the steps of the Transat acquisition and where the process is currently at .. but reserved comment on the topic for now.

Figured. Nothing focuses the mind like a hanging in the morning.

Not making a statement to reaffirm their commitment to the Transat transaction just put the anxiety level about its completion up 5 notches.

Look up burning platform.

Doesn’t mean the transaction won’t happen. Just means the sharks are circling.

And by the way guys “no comment” is perfectly legal. It’s about the only legal thing they could say and still stoke anxiety about the deal.

Take a closer look at the call transcript when it comes out.

Yes - commentary on the TRZ transaction was specifically “no comment”.

But read the CR response to a question about potential growth by acquisition (in the hypothetical). Interesting.

Roughly where in the call?

[CZBBYYZPilot]

Let us know when you spot the table trays being removed from the Buses. That will have AC written all over it.

Not really. Rouge buses all have table trays.

[Localizer]

I don’t recall that question rudder. CR did mention that this is worse case scenario planning .. if demand returns quicker than they anticipate then they can and will ramp up to meet demand. I still think demand will return quickly, personal opinion.

I have to wonder if the shrinkage of Rouge is really market related or because they’re anticipating the deal to be completed and need to make room with regards to scope. I also think AC wants the Neo .. how many options does Transat have on the Neo? Anyone know?

[FL-280]

Localizer... they were quite clear in the call. mike rousseau said: fleet planning is independent from Transat

[Localizer]

True ..

[aerodude]

I don’t recall that question rudder. CR did mention that this is worse case scenario planning .. if demand returns quicker than they anticipate then they can and will ramp up to meet demand. I still think demand will return quickly, personal opinion.

I have to wonder if the shrinkage of Rouge is really market related or because they’re anticipating the deal to be completed and need to make room with regards to scope. I also think AC wants the Neo .. how many options does Transat have on the Neo? Anyone know?

Its about the TRZ brand and the market they want. If AC still wants TRZ, it wont be for the aircraft given the massive surplus capacity. Those A321 are nice but its extra capacity AC doesnt need unfortunately. Remember, AC is deciding to retire 79 aircraft that are mostly owned and not lease obligated like TRZ aircraft. AC is bleeding 20 million a day and dont want extra lease obligations.

The shrinkage at rouge and fleet planning also have nothing with transat in mind as they stated very clearly in the conference call. 767 are going and will be using mainline HD 777's for the rouge widebody routes which are underused now anyways.
CR has also stated AC is going to be smaller coming out of this.

[Fanblade]

NEO’s are a dime a dozen now. Future planning no longer has anything to do with a shortage of aircraft or pilots.

The Transat acquisition will only about brand and market share. Does the price tag make sense based on those two items.

[Localizer]

Point taken ..

So brand and market share .. it looks fairly equal across the board:

Air Canada - 24%
Westjet - 22%
Air Transat - 22%
Sunwing - 27%
(Source: CBCNews)

So is the Transat brand and 22% of the leisure market worth $720 million?

2 interesting news stories .. Greece is preparing for the return of tourists and the second is fall/winter travel bookings have risen 38%. Things are starting to open and optimism is rising .. there is light at the end of the tunnel.

[FL320]

2 interesting news stories .. Greece is preparing for the return of tourists and the second is fall/winter travel bookings have risen 38%. Things are starting to open and optimism is rising .. there is light at the end of the tunnel.

On the last webcast Transat said they had people who were making reservations for the summer and also for next winter. Let’s see what they will say on Thursday...
I am wondering if it wouldn’t be better for Transat to continue on his own instead of being purchased by AC. Air Canada is bleeding cash and will continue to do so while Transat (and Sunwing) took proactive swift actions (postponed leases; immediate layoffs). Quebec’s government won’t let down AT and they could slowly restart the ops with a few A321LRs on key destinations like London, CDG, etc. and sell tickets cheaper than AC; that’s what people will be looking for.
AC know that Transat will still be messing around, that’s why I think they will renegotiate and if they can get a more reasonable price then they will finalize the purchase.
Anyway AC said that they are still waiting for the final regulatory approvals so it means they are still interested as we speak, they are not wasting everyone’s time just for fun; today wasn’t the appropriate time for that kind of announcement.

[Gilles Hudicourt]

So brand and market share .. it looks fairly equal across the board:

Air Canada - 24%
Westjet - 22%
Air Transat - 22%
Sunwing - 27%
(Source: CBCNews)

Those statistics are only Sun Leisure destinations. Air Transat also has 20% of Europe flights with Air Canada having about 40%. So Air Canada will increase its Europe stats by 50% with the Transat acquisition.....

[Localizer]

Thanks for the correction Gilles .. and yes my stats were north/south.

[727driver]

2 interesting news stories .. Greece is preparing for the return of tourists and the second is fall/winter travel bookings have risen 38%. Things are starting to open and optimism is rising .. there is light at the end of the tunnel.

On the last webcast Transat said they had people who were making reservations for the summer and also for next winter. Let’s see what they will say on Thursday...
I am wondering if it wouldn’t be better for Transat to continue on his own instead of being purchased by AC. Air Canada is bleeding cash and will continue to do so while Transat (and Sunwing) took proactive swift actions (postponed leases; immediate layoffs). Quebec’s government won’t let down AT and they could slowly restart the ops with a few A321LRs on key destinations like London, CDG, etc. and sell tickets cheaper than AC; that’s what people will be looking for.
AC know that Transat will still be messing around, that’s why I think they will renegotiate and if they can get a more reasonable price then they will finalize the purchase.
Anyway AC said that they are still waiting for the final regulatory approvals so it means they are still interested as we speak, they are not wasting everyone’s time just for fun; today wasn’t the appropriate time for that kind of announcement.

With all due respect this was not a takeover bid, Transat solicited for buyers because the viability of the company going forward in its current form was in question. The reality is during a pre Covid 19 time when airlines were making record profits Transat was struggling to yield any profit or return on investment. In this new landscape I believe the success of Transat as a going concern on its own would be very questionable. Transat needed a load factor north of 90% just to break even before this mess. Depressed demand after travel restrictions are lifted, the desire for physical distancing until a vaccine is created are factors that don’t provide a path where Transat can achieve the load factors and economies of scale to make a go of it on its own. JME himself stated as recently as last year the landscape has changed, the tour operator makes no money, only the hotel and resorts make money. Moreover Transat has no feeder network, alliance or rewards program which isolates itself and puts the airline at a severe disadvantage to make a comeback and to compete for a shrunken sked service or leisure market. Be careful for what you wish for.

Check comment at 2:40

https://www.youtube.com/watch?v=o3ksjNYLE8o

[Monkey_in_a_suit]

Just as a correction 727, Transat never solicited a bid for a take over by AC. It's actually quite the opposite. Air Canada came to Transat in October 2018 looking to take over Transat as a strategic move. This information came from JME during a company webcast. Please provide your source that Transat went to AC soliciting bids.

[GATRKGA]

2 interesting news stories .. Greece is preparing for the return of tourists and the second is fall/winter travel bookings have risen 38%. Things are starting to open and optimism is rising .. there is light at the end of the tunnel.

On the last webcast Transat said they had people who were making reservations for the summer and also for next winter. Let’s see what they will say on Thursday...
I am wondering if it wouldn’t be better for Transat to continue on his own instead of being purchased by AC. Air Canada is bleeding cash and will continue to do so while Transat (and Sunwing) took proactive swift actions (postponed leases; immediate layoffs). Quebec’s government won’t let down AT and they could slowly restart the ops with a few A321LRs on key destinations like London, CDG, etc. and sell tickets cheaper than AC; that’s what people will be looking for.
AC know that Transat will still be messing around, that’s why I think they will renegotiate and if they can get a more reasonable price then they will finalize the purchase.
Anyway AC said that they are still waiting for the final regulatory approvals so it means they are still interested as we speak, they are not wasting everyone’s time just for fun; today wasn’t the appropriate time for that kind of announcement.

With all due respect this was not a takeover bid, Transat solicited for buyers because the viability of the company going forward in its current form was in question. The reality is during a pre Covid 19 time when airlines were making record profits Transat was struggling to yield any profit or return on investment. In this new landscape I believe the success of Transat as a going concern on its own would be very questionable. Transat needed a load factor north of 90% just to break even before this mess. Depressed demand after travel restrictions are lifted, the desire for physical distancing until a vaccine is created are factors that don’t provide a path where Transat can achieve the load factors and economies of scale to make a go of it on its own. JME himself stated as recently as last year the landscape has changed, the tour operator makes no money, only the hotel and resorts make money. Moreover Transat has no feeder network, alliance or rewards program which isolates itself and puts the airline at a severe disadvantage to make a comeback and to compete for a shrunken sked service or leisure market. Be careful for what you wish for.

Check comment at 2:40

https://www.youtube.com/watch?v=o3ksjNYLE8o

Does Rouge become the connector for the Transat market? That's basically what will scale transat's business model. Having a feeder.

[Gilles Hudicourt]

Don't take the bait anyone....

So easy to trigger you lol.

Btw, I don’t personally have a dog in this fight.

[Dry Guy]

Bit late for that. This entire thread is you guys falling for obvious trolls.