AC and TRZ Agree to Terminate Arrangement

[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.

[FL320]

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.

727, Canada is full of immigrants and I can tell you that I know many people that are just waiting for the travel restrictions to be lifted to book a flight right away to Europe to see their family (or vice versa); at the cheapest price. If you think that people will wait for a vaccine and continue to follow the physical distancing in the upcoming months, you’re dreaming. I was walking in a park today full of people walking/running pretty close to each other, and without any mask on their face; like if the covid never happened.
Air Canada won’t sell business travel anytime soon and Transat won’t sell packages in resorts, their strength will be family/friends travel point to point at the cheapest price, which AC cannot afford because of a huge cost structure.
Europe is slowly starting to lift the travel restrictions, I hope Transat will get prepared accordingly.

[fishface]

I’m with FL320 on this one... I mean you can see it for yourself.... everyone is out and about, parks are full, there’s actually traffic on the roads etc. More and more, people aren’t caring as much. And it will ramp up faster and faster as more businesses are allowed to open.

We’re human after all, NEXT CRISIS PLEASE !

[727driver]

I thought you worked for Transat Fl320 because if you did you would know that the operation makes little if any profit on airfare only sales. It’s the tour or cruise package and hotel commissions that generates the profit for the company and has done so for the last 30 years. In case you missed the presentations on your initial coarse I will remind you what is said to all new pilot indoctrination classes: Transat is not an airline it is a vertically integrated TOUR OPERATOR!!! that has a fleet of aircraft. This was the exact same model Thomas Cook used and we all saw how that turned out in the end. If your counting on immigrants returning home to the motherland to visit family to fill the planes and support Transat through this all I have to say is wow!!! I have news for you, flights to Rome, Venice, Barcelona, Madrid, Nice, Paris, London etc are not full of Vito Scaramucci’s, Julio Montoya’s, Phillipe Savard’s and John Smith’s returning to the homeland; they are full of tourists and by all accounts there are people way above our pay grade and in positions of power to make decisions that know this industry better that a bunch of pilots that obviously see something very different then what you see. Ergo fleet grounded.

If your theory gives you solace and peace of mind that all will be well and Transat can and should go it alone; well God bless you. However i will leave you with this thought to ponder. If the CEO who is a proud Québécois who built that company up from a little local travel agency selling holiday packages to Acapulco to an international tour operator decides to push the sell button way before this pandemic even was on anyone’s radar then he probably knows more than you on why he thinks they were already in trouble and it was time to cash our rather than play out a losing hand.

[FL320]

.

[FL320]

I thought you worked for Transat Fl320 because if you did you would know that the operation makes little if any profit on airfare only sales. It’s the tour or cruise package and hotel commissions that generates the profit for the company and has done so for the last 30 years. In case you missed the presentations on your initial coarse I will remind you what is said to all new pilot indoctrination classes: Transat is not an airline it is a vertically integrated TOUR OPERATOR!!! that has a fleet of aircraft. This was the exact same model Thomas Cook used and we all saw how that turned out in the end.

727driver,
Transat evolved during the last years; especially thanks to the new Chief operating officer; it now looks more like an airline than a tour operator.

[altiplano]

160tonoaha,
I have serious doubts about whether you fly for AC. None of my experiences line up with yours at all. You have simply repeated oft said claims about the FD attitude, and conversations on AC’s FD’s. None of it happens to any type of degree that you claim.
I’ll tell you what, why don’t you give us the years of service and the equipment that the 5th pilot from the top of the April retirement bulletin flew. No names.
I’m sure you have the list, and can provide that within a few moments.
Cheers.

Was it DB?

I agree there is some real pieces of work at AC. That said some of the coolest people I ever met work at AC. There's such a range. You never know what you're going to get.

LOL... I had to check! I think he was on the other retirement bulletin though. FOD!

4th from top in April was a different DB who was a gentleman to fly with, lots of great stories, and excelled at the layover... Also a source for a few of my stories.

Lots of great times here with good people. And many more to come after we pull this wreck out the other side of this and get it running again.

[DanWEC]

An increasing number of analysts today are taking the interesting position that as a whole, leisure travel will rebound more in proportion to domestic flying.

Corporate factors at play here is the new normal where some of the current stay-at-home workers will stay there, and a permanent increase in videoconferencing as opposed to meetings.

I've had a virtual margarita, it's no good.

Of course there's the gross economic impacts of the recession affecting leisure overall, but an interesting perspective nonetheless.

[Sharklasers]

An increasing number of analysts today are taking the interesting position that as a whole, leisure travel will rebound more in proportion to domestic flying.

Corporate factors at play here is the new normal where some of the current stay-at-home workers will stay there, and a permanent increase in videoconferencing as opposed to meetings.

I've had a virtual margarita, it's no good.

Of course there's the gross economic impacts of the recession affecting leisure overall, but an interesting perspective nonetheless.

That would be terrific! AC could spool up their very successful Rouge operation again in response to increased demand, thus foregoing the additional expense of integrating a struggling leisure only carrier.
This would be a benefit for all parties, AC employees would enjoy greater job security, the market would be happy as AC could preserve vital cash which we could use for the restart and offer exceptional deals to entice passengers back. Win Win! Let’s go leisure market!

[altiplano]

An increasing number of analysts today are taking the interesting position that as a whole, leisure travel will rebound more in proportion to domestic flying.

Who? Do you have any links?

Consensus among carriers in the US and at AC is expecting domestic recovery first.

[DanWEC]

An increasing number of analysts today are taking the interesting position that as a whole, leisure travel will rebound more in proportion to domestic flying.

Who? Do you have any links?

Consensus among carriers in the US and at AC is expecting domestic recovery first.

https://hbr.org/2020/05/looking-to-the- ... air-travel

Here is one from the HBR. I was reading another seperate one this morning that echoed the same sentiments but can't find it as quickly. Desjardins rings a bell. I'll post it if I find it later back at my desk.

Should be mentioned that there is a difference between "recover first" and "less affected".... so might be differing results depending on how forward-looking.

Who knows though, this is all uncharted.