Air Canada and Transat announce Increased Purchase Price to $18 per Share

Discuss topics related to Air Transat.

Moderators: North Shore, ahramin, sky's the limit, Sulako

Post Reply
Gilles Hudicourt
Rank 10
Rank 10
Posts: 2163
Joined: Thu Mar 22, 2012 5:51 am
Location: YUL

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by Gilles Hudicourt »

rudder wrote:
Sun May 10, 2020 7:24 am
Awesome. So that was the pre-COVID plan. What is the updated plan?

Going in to suspended animation is not a plan. What is the plan?
That is above my pay grade, but to assume or insinuate that Transat executives are just sitting on their hands beyond just going into "suspended animation" is out of character for you.

What we both know however is that there is a clause in the purchase agreement that requires for Transat to ask AC before taking any measures that involves a cost above a certain threshold.

I did notice that the last 3 remaining A310s that were to be retired later this year were retired at the end of March and that 2 A321 CEOS were taken off the TSC fleet.

As of now, our fleet stands at :
10 A321 CEO, 3 A321LR, 20 A330, 5 B737-800, 5 aircraft less than on March 1st.

In addition to these, I know that there are in Europe a few A321LRs (I think 3) that are either ready or just about ready to be delivered.
---------- ADS -----------
  

FL320
Rank 5
Rank 5
Posts: 306
Joined: Tue Sep 14, 2010 11:44 am

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by FL320 »

rudder wrote:
Sun May 10, 2020 7:42 am
airboy1 wrote:
Sun May 10, 2020 7:38 am
rudder wrote:
Sun May 10, 2020 7:24 am

Going in to suspended animation is not a plan. What is the plan?
That's Air Canada's problem to figure out.
Priceless.
As Gilles noticed, you tend to forget that Transat is limited in its actions and expenses because of the purchase agreement. The plan they are making will be according to AC’s desire. AC already interfered in the negos of our collective agreement, the hiring of our pilots, etc..
Again; if AC decide to cancel the purchase it will cost more than 40 millions.
---------- ADS -----------
  

rudder
Rank 10
Rank 10
Posts: 2125
Joined: Wed Mar 08, 2006 12:10 pm

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by rudder »

Gilles Hudicourt wrote:
Sun May 10, 2020 8:24 am
rudder wrote:
Sun May 10, 2020 7:24 am
Awesome. So that was the pre-COVID plan. What is the updated plan?

Going in to suspended animation is not a plan. What is the plan?
That is above my pay grade, but to assume or insinuate that Transat executives are just sitting on their hands beyond just going into "suspended animation" is out of character for you.

What we both know is that there is a clause in the purchase agreement that requires for Transat to ask AC before taking any measures that involves a cost above a certain threshold.

What I noticed so far however is that the last 3 remaining A310s that were to be retired later this year were retired at the end of March and that 2 A321 CEOS were taken off the TSC fleet.

As of now, our fleet stands at :
10 A321 CEO, 3 A321LR, 20 A330, 5 B737-800, 5 aircraft less than on March 1st.

In addition to these, I know that there are in Europe a few A321LRs that are ready or just about to be ready to be delivered.
Thx Gilles.

I am not hurling stones. It is a legitimate question.

TRZ is a business, not an airplane. This is not a “My Control “ “Your Control” transition if the transaction is consummated. TRZ is a going concern today, will be tomorrow, will be for an extended transitional period if AC closes on the deal, and hopefully will be for the foreseeable future.

Whatever the TRZ commercial plan was on 01 January is no longer worth the paper that it was printed on. World has changed. Market has changed.

Perhaps TRZ HQ is working on their revised plan and just have not disclosed it publicly. But if TRZ want to avoid triggering MAE provisions then mitigation of economic impact is necessary both in the instant and going forward.

May is going to be a meaningful month for this transaction and therefore for all TRZ employees. But what needs to be acknowledged is that for AC and related employees the issues are not just about seniority but also about viability. Many have seen CCAA close up and don’t want to go there again. So tough choices have to be made and there is lots of pain to go around. Nobody is exempt.

Bonnie chance.
---------- ADS -----------
  

TFTMB heavy
Rank 5
Rank 5
Posts: 359
Joined: Mon Feb 16, 2004 9:58 am

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by TFTMB heavy »

altiplano wrote:
Sun May 10, 2020 8:17 am

TRZ aircraft?

That's an expensive lease takeover... 720 million for a handful of new 321 leases when aircraft leases are a dime a dozen and you're reducing your own fleet and lease liabilities at present? And gas is cheap?
Let's look at it really simply, because we all know it is much more complex then what I present below:

Transat does have revenues coming form its distribution network. The profit margins are slim and we were dealing with too much capacity in the markets so we were loosing money. I think AC can take over and turn Transat into a profitable operation simply by not putting Rouge aircraft on all of our routes.

So it's not just taking over leases, there is revenue stream attached to those leases and you can't exploit it without the brand it is sold under.
---------- ADS -----------
  

rudder
Rank 10
Rank 10
Posts: 2125
Joined: Wed Mar 08, 2006 12:10 pm

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by rudder »

TFTMB heavy wrote:
Sun May 10, 2020 11:46 am

So it's not just taking over leases, there is revenue stream attached to those leases and you can't exploit it without the brand it is sold under.
Question - what is that revised revenue stream for summer 2020? Winter 2020/2021? Summer 2021?
---------- ADS -----------
  

TFTMB heavy
Rank 5
Rank 5
Posts: 359
Joined: Mon Feb 16, 2004 9:58 am

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by TFTMB heavy »

rudder wrote:
Sun May 10, 2020 11:51 am
TFTMB heavy wrote:
Sun May 10, 2020 11:46 am

So it's not just taking over leases, there is revenue stream attached to those leases and you can't exploit it without the brand it is sold under.
Question - what is that revised revenue stream for summer 2020? Winter 2020/2021? Summer 2021?
No idea, what we have been told this week is that the flight schedule is cancelled till the end of June and that they are developing plus for a re-start when conditions are right.

Even though it is 0 right now it won't stay that way, things will slowly return to a new normal. A lot of analysts are pointing towards the VFR (visiting friends and family) and vacation markets returning first. Those are our bread and butter, I anticipate we will return to something much closer to what we were pre-COVID than other airlines that rely on business travel and connecting pax.
---------- ADS -----------
  

727driver
Rank 2
Rank 2
Posts: 86
Joined: Sat Mar 13, 2004 12:13 pm

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by 727driver »

So let me get this straight. Your claim is that the airline industry recovery from the worst global economic recession since the Great Depression is going to be lead by discretionary international travel and discretionary spending. 🙄 I’m sorry but that’s a bit of a stretch.
---------- ADS -----------
  

altiplano
Rank 11
Rank 11
Posts: 4089
Joined: Sat Jan 22, 2005 2:24 pm

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by altiplano »

727driver wrote:
Sun May 10, 2020 4:03 pm
So let me get this straight. Your claim is that the airline industry recovery from the worst global economic recession since the Great Depression is going to be lead by discretionary international travel and discretionary spending. 🙄 I’m sorry but that’s a bit of a stretch.
There is lots of wishful thinking on this thread... LOL!
---------- ADS -----------
  

FL320
Rank 5
Rank 5
Posts: 306
Joined: Tue Sep 14, 2010 11:44 am

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by FL320 »

altiplano wrote:
Sun May 10, 2020 4:30 pm
727driver wrote:
Sun May 10, 2020 4:03 pm
So let me get this straight. Your claim is that the airline industry recovery from the worst global economic recession since the Great Depression is going to be lead by discretionary international travel and discretionary spending. 🙄 I’m sorry but that’s a bit of a stretch.
There is lots of wishful thinking on this thread... LOL!
Why not..LOL?
---------- ADS -----------
  

Sharklasers
Rank 4
Rank 4
Posts: 228
Joined: Mon May 29, 2017 5:24 pm

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by Sharklasers »

https://www.lapresse.ca/affaires/202005 ... trompe.php

Letko seems pretty unenthusiastic about the deal now.
Certainly not the public tone I would expect from Transat’s largest shareholder.
---------- ADS -----------
  

altiplano
Rank 11
Rank 11
Posts: 4089
Joined: Sat Jan 22, 2005 2:24 pm

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by altiplano »

You Transat boys should write Letko and tell him to go f×ck himself, he doesn't know what he's talking about regarding the reason for the low share valuation. He doesn't know anything. The deal is expected to go through as negotiated.

Jeezus.
---------- ADS -----------
  

TFTMB heavy
Rank 5
Rank 5
Posts: 359
Joined: Mon Feb 16, 2004 9:58 am

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by TFTMB heavy »

727driver wrote:
Sun May 10, 2020 4:03 pm
So let me get this straight. Your claim is that the airline industry recovery from the worst global economic recession since the Great Depression is going to be lead by discretionary international travel and discretionary spending. 🙄 I’m sorry but that’s a bit of a stretch.
Not everyone is laid off and will be broke at the end of this. Many people have family they want to go see but it's on hold for now due to travel restrictions. I didn't dream all of this up, even AC said on its call on Monday that this kinds of travel will start up before business travel.
---------- ADS -----------
  

FL320
Rank 5
Rank 5
Posts: 306
Joined: Tue Sep 14, 2010 11:44 am

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by FL320 »

altiplano wrote:
Sun May 10, 2020 6:36 pm
You Transat boys should write Letko and tell him to go f×ck himself, he doesn't know what he's talking about regarding the reason for the low share valuation. He doesn't know anything. The deal is expected to go through as negotiated.

Jeezus.
Altiplano, 4010 unuseful posts on avcanada (plus those on Pprune and airlinepilotcentral). It’s time to get a real life; it is too short to be just a troll.
Jeezus
---------- ADS -----------
  

Sharklasers
Rank 4
Rank 4
Posts: 228
Joined: Mon May 29, 2017 5:24 pm

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by Sharklasers »

altiplano wrote:
Sun May 10, 2020 6:36 pm
You Transat boys should write Letko and tell him to go f×ck himself, he doesn't know what he's talking about regarding the reason for the low share valuation. He doesn't know anything. The deal is expected to go through as negotiated.

Jeezus.
Letko stands to pocket 145 million if the deal goes through as negotiated. Likely much less now.
On Jan 10 they owned 1.35 billion worth of Air Canada, today their position is worth 450 million.
I doubt they will be encouraging the board to do anything they think would slow the recovery of AC, including a merger that by their own admission is no longer necessary.
All that being said there are the other 80% of shareholders that still want that 18 a share.
---------- ADS -----------
  

altiplano
Rank 11
Rank 11
Posts: 4089
Joined: Sat Jan 22, 2005 2:24 pm

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by altiplano »

FL320 wrote:
Sun May 10, 2020 7:47 pm
altiplano wrote:
Sun May 10, 2020 6:36 pm
You Transat boys should write Letko and tell him to go f×ck himself, he doesn't know what he's talking about regarding the reason for the low share valuation. He doesn't know anything. The deal is expected to go through as negotiated.

Jeezus.
Altiplano, 4010 unuseful posts on avcanada (plus those on Pprune and airlinepilotcentral). It’s time to get a real life; it is too short to be just a troll.
Jeezus
Blow me.
---------- ADS -----------
  

gtappl
Rank 1
Rank 1
Posts: 38
Joined: Wed Mar 04, 2020 8:48 am

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by gtappl »

altiplano wrote:
Sun May 10, 2020 8:26 pm
FL320 wrote:
Sun May 10, 2020 7:47 pm
altiplano wrote:
Sun May 10, 2020 6:36 pm
You Transat boys should write Letko and tell him to go f×ck himself, he doesn't know what he's talking about regarding the reason for the low share valuation. He doesn't know anything. The deal is expected to go through as negotiated.

Jeezus.
Altiplano, 4010 unuseful posts on avcanada (plus those on Pprune and airlinepilotcentral). It’s time to get a real life; it is too short to be just a troll.
Jeezus
Blow me.
I doubt anyone will with your history :smt040
---------- ADS -----------
  

User avatar
WhatThe?
Rank 3
Rank 3
Posts: 171
Joined: Mon May 23, 2005 10:42 am

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by WhatThe? »

Anyone have a readable version of Peter Letko acticle?

It was in some gibberish language! :smt008
---------- ADS -----------
  

mbav8r
Rank 10
Rank 10
Posts: 2130
Joined: Sun Jul 02, 2006 8:11 am
Location: Manitoba

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by mbav8r »

WhatThe? wrote:
Sun May 10, 2020 9:59 pm
Anyone have a readable version of Peter Letko acticle?

It was in some gibberish language! :smt008
I used google translate, copy and paste, it will translate for you.
https://translate.google.ca/
---------- ADS -----------
  
"Stand-by, I'm inverted"

FL320
Rank 5
Rank 5
Posts: 306
Joined: Tue Sep 14, 2010 11:44 am

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by FL320 »

mbav8r wrote:
Mon May 11, 2020 5:49 am
WhatThe? wrote:
Sun May 10, 2020 9:59 pm
Anyone have a readable version of Peter Letko acticle?

It was in some gibberish language! :smt008
I used google translate, copy and paste, it will translate for you.
https://translate.google.ca/
Don’t waste your time; he’s just saying the same as everyone does: he doesn’t know.
---------- ADS -----------
  

altiplano
Rank 11
Rank 11
Posts: 4089
Joined: Sat Jan 22, 2005 2:24 pm

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by altiplano »

WhatThe? wrote:
Sun May 10, 2020 9:59 pm
Anyone have a readable version of Peter Letko acticle?

It was in some gibberish language! :smt008

The Press
Peter Letko confident about air travel, says Buffett is wrong

PHOTO OLIVIER JEAN, ARCHIVES LA PRESSE

Peter Letko (left) and Daniel Brosseau, co-founders of Letko Brosseau

The confidence of Montreal asset manager Peter Letko in air transportation remains very strong despite the crisis, despite the public disavowal of famous investor Warren Buffett towards the industry last weekend.

Posted on May 9, 2020 at 11:00 a.m.Share
Richard DufourRICHARD DUFOUR
LA PRESSE

Warren Buffett announced a week ago, at the annual Berkshire Hathaway meeting, that the conglomerate he heads had just liquidated his shares in air transport. Berkshire Hathaway was the largest shareholder in Delta and the second largest in Southwest, American and United.

Warren Buffett admitted that he made a mistake in 2016 by investing again in air transportation.

“I have a lot of respect for Warren Buffett. But we have invested in air transportation long before him. I think he lost a lot of money when we did a lot of it, ”says portfolio manager Peter Letko of Letko Brosseau & Associates.

I understand why [Warren Buffett] did this [selling his airline stock], but this is not the first time I have disagreed with him.

The largest shareholder in Transat and Air Canada, Letko Brosseau sold a portion of its Air Canada shares three years ago. The firm bought its first shares of Air Canada during the financial crisis, a decade ago.

Last spring, Letko Brosseau opposed the preliminary proposal of $ 13 per share from Air Canada for Transat, because the firm judged that the Montreal tour operator was worth "much more". Air Canada finally agreed to increase its offer to $ 18 per share.

“Warren Buffett's mistake was that he bought his airline stocks too late. The result is that it takes losses by selling, ”says Peter Letko.

“We were WestJet's largest shareholder and last year sold our shares in this carrier at a great profit. It worked for us. We have a very different opinion [from that of Warren Buffett]. "

In revealing last weekend that he had abandoned air travel, Warren Buffett said that "the world has changed".

"We think about that a lot," admits Peter Letko. It is very possible that people become more careful and think more before flying. But if a vaccine is found, people will go back to their habits. Except maybe business people because of the current use of teleconferencing. However, it is too early to say that everything will change. People love to travel, visit and see other people. "

Peter Letko certainly does not intend to stop flying. “I have had this taste since I was very young. The important thing is the discovery of a vaccine. I will be ready to resume a commercial flight when a vaccine is offered. "

Asked about his level of confidence that Air Canada's purchase of Transat would materialize, Peter Letko displayed some skepticism. " Frankly I do not know. With everything that just happened, we really don't know. The transaction is still attractive to Air Canada. But a lot has changed. The government may impose conditions and Air Canada may find them too stringent. "

With Transat's share at $ 8, the market is certainly raising doubts. "It tells us there are risks, of course," admits Peter Letko. But look what just happened. Almost all of the planes are grounded today. This is not something that we could have anticipated when the transaction was announced. So it's normal. "

According to him, Air Canada does not need Transat's capacity at the moment. “But maybe in a year or more, though. A health development, like the discovery of a vaccine, could quickly turn the tide, ”he says.


Letko Brosseau is also still a shareholder in Bombardier and Mr. Letko believes that the pandemic could have an impact on demand for private aircraft, such as business jets manufactured by Bombardier. Perhaps more and more people who can afford it will want to travel on private jets, he believes.

Regarding the negative impact that a recession could have on demand for aircraft manufactured by Bombardier, Peter Letko responded that it would depend on the length of this recession.

If he says he does not know the new CEO of Bombardier, Éric Martel, Peter Letko has agreed to give his appreciation for the passage of Alain Bellemare at the helm of the company.

“It was a difficult time. He had a great challenge to face with the development of the ex-C Series. It took more time and more money. It's really a shame that these devices are now in the hands of Airbus. And it's a shame for all of us here in Quebec who have participated in one way or another in the development effort. It's a shame and even a little sad. "
---------- ADS -----------
  

airboy1
Rank 1
Rank 1
Posts: 43
Joined: Thu Sep 08, 2011 12:54 pm

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by airboy1 »

Letko might be buying up more TRZ shares at a cheap price hence why he’s saying this.
---------- ADS -----------
  

FL-280
Rank 4
Rank 4
Posts: 256
Joined: Fri Jan 20, 2017 6:45 pm

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by FL-280 »

I think the colder weather in the last few days is also a sign that the transaction will go through, as planned at 18$ per share. Yesterday’s windy day, is a sign that the 777 will be going to transat and flown by ts pilots only at us legacy carrier rates converted to canadian dollars. Everything that happens, right now. I can feel it, is a sign that the transaction will be ok.
---------- ADS -----------
  

DanWEC
Rank (9)
Rank (9)
Posts: 1680
Joined: Sun Jul 26, 2009 1:05 pm
Location: 404

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by DanWEC »

Yet another solid contribution to the conversation by fl280. Well done. At least we can always count on some things.
---------- ADS -----------
  

User avatar
Localizer
Rank (9)
Rank (9)
Posts: 1304
Joined: Tue Jan 11, 2005 9:18 pm
Location: CYYZ

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by Localizer »

Know when to walk away boys ..
---------- ADS -----------
  

DanWEC
Rank (9)
Rank (9)
Posts: 1680
Joined: Sun Jul 26, 2009 1:05 pm
Location: 404

Re: Air Canada and Transat announce Increased Purchase Price to $18 per Share

Post by DanWEC »

Localizer wrote:
Mon May 11, 2020 4:46 pm
Know when to walk away boys ..
Ha, correcto.... I had actually gone back after a minute to delete it in a "What's the point?" moment but the delete option was gone. Edit would have gotten in the way of my lawn mowing beer, what a zoo.
---------- ADS -----------
  

Post Reply

Return to “Air Transat”