AC and TRZ Agree to Terminate Arrangement

Discuss topics related to Air Transat.

Moderators: sky's the limit, sepia, Sulako, lilfssister, North Shore, I WAS Birddog

Post Reply
FL320
Rank 6
Rank 6
Posts: 459
Joined: Tue Sep 14, 2010 11:44 am

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

Post by FL320 »

Hope Transat will get the same:

788 millions loan from EDC to Air Canada
https://www.tvanouvelles.ca/2020/05/12 ... r-canada-1
---------- ADS -----------
 
Last edited by FL320 on Tue May 12, 2020 6:55 am, edited 1 time in total.
aerodude
Rank 3
Rank 3
Posts: 184
Joined: Fri May 01, 2009 8:16 am

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

Post by aerodude »

FL320 wrote: Tue May 12, 2020 6:46 am Hope Transat will get the same:

788 millions loan from EDC to Air Canada
https://www.tvanouvelles.ca/2020/05/12 ... r-canada-1
That's almost the amount to buy TRZ! 😎
---------- ADS -----------
 
rudder
Rank 11
Rank 11
Posts: 3848
Joined: Wed Mar 08, 2006 12:10 pm

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

Post by rudder »

FL320 wrote: Tue May 12, 2020 6:46 am Hope Transat will get the same:

788 millions loan from EDC to Air Canada
https://www.tvanouvelles.ca/2020/05/12 ... r-canada-1
That is an EDC sourced loan that is collateralized against the A220’s. It is not an LEEFF loan.

Does TRZ own any of the fleet?
---------- ADS -----------
 
GATRKGA
Rank 4
Rank 4
Posts: 217
Joined: Fri Aug 04, 2017 1:24 pm

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

Post by GATRKGA »

rudder wrote: Tue May 12, 2020 6:58 am
FL320 wrote: Tue May 12, 2020 6:46 am Hope Transat will get the same:

788 millions loan from EDC to Air Canada
https://www.tvanouvelles.ca/2020/05/12 ... r-canada-1
That is an EDC sourced loan that is collateralized against the A220’s. It is not an LEEFF loan.

Does TRZ own any of the fleet?
Where does it say that it's for the A220's?
---------- ADS -----------
 
Last edited by GATRKGA on Tue May 12, 2020 8:38 am, edited 2 times in total.
rudder
Rank 11
Rank 11
Posts: 3848
Joined: Wed Mar 08, 2006 12:10 pm

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

Post by rudder »

GATRKGA wrote: Tue May 12, 2020 8:32 am
Where does it say that it's for the A220's?
“Le prêt est garanti par les quatre avions Airbus A220 récemment acquis par Air Canada et 14 autres que l’entreprise doit recevoir d’ici la fin de l’année. Les fonds peuvent être utilisés « aux fins générales de l’entreprise », a indiqué Air Canada.”
---------- ADS -----------
 
GATRKGA
Rank 4
Rank 4
Posts: 217
Joined: Fri Aug 04, 2017 1:24 pm

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

Post by GATRKGA »

rudder wrote: Tue May 12, 2020 8:37 am
GATRKGA wrote: Tue May 12, 2020 8:32 am
Where does it say that it's for the A220's?
“Le prêt est garanti par les quatre avions Airbus A220 récemment acquis par Air Canada et 14 autres que l’entreprise doit recevoir d’ici la fin de l’année. Les fonds peuvent être utilisés « aux fins générales de l’entreprise », a indiqué Air Canada.”
Thanks

Rudder - I heard a rumor that AC is trying to get the government to pay for the transaction. With LEEFF the government will finance the respective collective agreements and keep everyone on the payroll so it's not a financial burden for AC until the pandemic passes and the load factors are back to where they used to be.

What do you think? Seems viable.
---------- ADS -----------
 
aerodude
Rank 3
Rank 3
Posts: 184
Joined: Fri May 01, 2009 8:16 am

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

Post by aerodude »

:cry:
GATRKGA wrote: Tue May 12, 2020 8:38 am
rudder wrote: Tue May 12, 2020 8:37 am
GATRKGA wrote: Tue May 12, 2020 8:32 am
Where does it say that it's for the A220's?
“Le prêt est garanti par les quatre avions Airbus A220 récemment acquis par Air Canada et 14 autres que l’entreprise doit recevoir d’ici la fin de l’année. Les fonds peuvent être utilisés « aux fins générales de l’entreprise », a indiqué Air Canada.”
Thanks

Rudder - I heard a rumor that AC is trying to get the government to pay for the transaction. With LEEFF the government will finance the respective collective agreements and keep everyone on the payroll so it's not a financial burden for AC until the pandemic passes and the load factors are back to where they used to be.

What do you think? Seems viable.
Yup it's only way air canada is paying 18$/share. AC won't pay that but i can see the government paying AC to buy TRZ.
---------- ADS -----------
 
User avatar
LittleNelly
Rank 2
Rank 2
Posts: 67
Joined: Sat Jan 30, 2016 11:07 am

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

Post by LittleNelly »

GATRKGA wrote: Tue May 12, 2020 8:38 am
rudder wrote: Tue May 12, 2020 8:37 am
GATRKGA wrote: Tue May 12, 2020 8:32 am
Where does it say that it's for the A220's?
“Le prêt est garanti par les quatre avions Airbus A220 récemment acquis par Air Canada et 14 autres que l’entreprise doit recevoir d’ici la fin de l’année. Les fonds peuvent être utilisés « aux fins générales de l’entreprise », a indiqué Air Canada.”
Thanks

Rudder - I heard a rumor that AC is trying to get the government to pay for the transaction. With LEEFF the government will finance the respective collective agreements and keep everyone on the payroll so it's not a financial burden for AC until the pandemic passes and the load factors are back to where they used to be.

What do you think? Seems viable.

The Canadian tax payer literally sending bags of cash to Air Transat SHAREHOLDERS.... yeah not a chance that is politically viable in any situation. Supporting a company is one thing but simply just sending tax payer money directly to shareholders is ridiculous
---------- ADS -----------
 
GATRKGA
Rank 4
Rank 4
Posts: 217
Joined: Fri Aug 04, 2017 1:24 pm

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

Post by GATRKGA »

Interesting times ahead. Won't be the first time tax payer money was spent for shareholders, won't be the last.

I guess the government could come back and say "what's your concern, I paid you 2k/month in CERB's, CEWS, etc, and this is the best outcome to preserve as many jobs as possible for Canada/Quebec" :smt040

Something is brewing.
---------- ADS -----------
 
User avatar
LittleNelly
Rank 2
Rank 2
Posts: 67
Joined: Sat Jan 30, 2016 11:07 am

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

Post by LittleNelly »

Usually when people claim tax payer money was sent to bailout shareholders it is because the government assisted the company directly to keep it alive which thus indirectly benefits the shareholders. I don’t recall anytime a government bypassed supporting the company to instead just send money directly to shareholders at a grossly exaggerated price.

Maybe the best political path would be to see Transat enter CCAA, wipe out the shareholders, then push Air Canada to take it over and save those jobs.
---------- ADS -----------
 
rudder
Rank 11
Rank 11
Posts: 3848
Joined: Wed Mar 08, 2006 12:10 pm

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

Post by rudder »

GATRKGA wrote: Tue May 12, 2020 8:38 am
Rudder - I heard a rumor that AC is trying to get the government to pay for the transaction. With LEEFF the government will finance the respective collective agreements and keep everyone on the payroll so it's not a financial burden for AC until the pandemic passes and the load factors are back to where they used to be.

What do you think? Seems viable.
I have not heard anything specific but I am not plugged in to any of those conversations.

Having said that, the financial dynamics of the proposed transaction have changed dramatically over the course of the last 2 months. All of the projections for cash flows for both operations are meaningless. The revenue environment looking out 6-24 months remains greatly problematic. JT just announced moments ago that CDN border controls and entry restrictions will not be loosened any time soon. The low point for depressed air travel volume - in particular international - looks to be extended.

My understanding of the LEEFF program is the availability of government backstopped conditional non-collateralized loans. Prospective subscribers can make application. Use of funds it at the discretion of the recipient save for Executive compensation or share repurchase. There has been no suggestion to date that these will be converted to forgivable loans.

AC and TRZ are both participating in the CEWS program which will be extended beyond June 06. AC, for example, derives a benefit of $35-40MM per month from that program. That is a generous benefit but that has not stopped AC from announcing permanent fleet size reductions, identifying associated pilot staffing requirements, and processing the required downgrades and ultimately layoffs.

Both AC and TRZ have acted to preserve liquidity. Those actions have substantially modified the pre-COVID balance sheets. Neither has sourced additional liquidity through equity. If consummated those balance sheets will eventually be consolidated. Added debt must be serviced. And those obligations must be met considering an ongoing depressed revenue stream vs original merged projections.

I don’t count the Feds out in offering terms to induce AC to close on the transaction. But the government cannot be seen to be picking favourites, so what are they going to do for ALL of the other players? I think that we are there already with CEWS and LEEFF. The Feds will approve whatever size loan AC requests and if a portion of that loan is used to finance some type of transaction with TRZ then so be it. Having said that, consummating that transaction at $18/share would be ludicrous.

Lastly, I do not see any scenario where 100% employment is maintained. And why should it? There is no medium term prospect of viability without rightsizing for the marketplace. Take your pick. 20% smaller? 30%? 50%? Take a look at what is happening in US and around the world. Getting smaller is the consistent theme. Nobody is taking a “6-12 months then everything will be back to normal” approach.

I think that the fate of the transaction will be known by months end. Regardless of the outcome, pilots at AC and TS will be downgraded and when CEWS expires - furloughed.

Everyone should plan accordingly.
---------- ADS -----------
 
DanWEC
Rank 10
Rank 10
Posts: 2311
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 »

Just a note, anything coming from the LEEFF or by virtue, EDC, is a low interest loan. The small amount of interest servicing the loan pays for the infrastructure around EDC, etc. I've dealt with EDC and they're fantastic BTW.
No lender, especially the gov't wants bad debt, so the criteria to offer financing equates to strong viability. So while it's tax payer money per se, it's more than expected to be paid back (Hence the secured collateral), so no taxpayer will be out of pocket. Quite the opposite really. It's generally in the company's best interest to settle it as soon as possible to remove the interest take from the balance sheet.
---------- ADS -----------
 
User avatar
telex
Rank 7
Rank 7
Posts: 634
Joined: Sun Feb 07, 2016 9:05 pm

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

Post by telex »

Do you think the MP of Papineau will cease his relentless fight for Canadian (ie. Quebec) jobs?
It is a certainty that AT boys are girls will be provided for.
Stop worrying and enjoy the time off.
---------- ADS -----------
 
Liberalism itself as a religion where its tenets cannot be proven, but provides a sense of moral rectitude at no real cost.
DanWEC
Rank 10
Rank 10
Posts: 2311
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 »

rudder wrote: Tue May 12, 2020 9:46 am Regardless of the outcome, pilots at AC and TS will be downgraded and when CEWS expires - furloughed.

Everyone should plan accordingly.
Of that, there is no doubt.

What's worse is that in the fall, the couple thousand in the bottom chunks of all seniority lists here, and tens of thousands of American pilots, will all be competing for a handful of jobs worldwide, once the realization of the outlook really sinks in in the next few months.
---------- ADS -----------
 
FL320
Rank 6
Rank 6
Posts: 459
Joined: Tue Sep 14, 2010 11:44 am

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

Post by FL320 »

Sunwing’s 2020 domestic program to kick off June 26
https://www.travelweek.ca/news/sunwings ... f-june-26/

Transat is gonna wait and watch?
---------- ADS -----------
 
User avatar
VeRmiLLioN
Rank 3
Rank 3
Posts: 108
Joined: Sat Feb 21, 2004 12:14 pm
Location: Express Elevator to Hell, going down!

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

Post by VeRmiLLioN »

FL320 wrote: Tue May 19, 2020 1:35 pm Sunwing’s 2020 domestic program to kick off June 26
https://www.travelweek.ca/news/sunwings ... f-june-26/

Transat is gonna wait and watch?
They actually used a FSX image. Wow.
---------- ADS -----------
 
Attachments
Sunwing-finalizes-summer-schedule-to-operate-without-737-MAX-8.jpg
Sunwing-finalizes-summer-schedule-to-operate-without-737-MAX-8.jpg (45.99 KiB) Viewed 3371 times
____________________
Starting Two
Gilles Hudicourt
Rank 10
Rank 10
Posts: 2227
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 »

DanWEC wrote: Tue May 12, 2020 10:07 am What's worse is that in the fall, the couple thousand in the bottom chunks of all seniority lists here, and tens of thousands of American pilots, will all be competing for a handful of jobs worldwide, once the realization of the outlook really sinks in in the next few months.
Canadian and American ? Pilots Worldwide will be competing for the jobs. Czechs. Poles. South Africans. Russians. Panamanians. Colombians. Indians....
---------- ADS -----------
 
airboy1
Rank 2
Rank 2
Posts: 54
Joined: Thu Sep 08, 2011 12:54 pm

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

Post by airboy1 »

---------- ADS -----------
 
Fanblade
Rank (9)
Rank (9)
Posts: 1693
Joined: Mon Mar 28, 2011 8:50 pm

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

Post by Fanblade »


What does the article have to do with the thread topic? Rousseau is talking 5 years out. He is also talking about aircraft that are pretty easy to acquire. It has been well known for a few years now ( ever since AC started converting Max 9’s to 8’s) that AC would need to rework the 321 replacement. With that said it was also understood that because the 321’s in AC fleet are the newest of the 320 family, the replacement would come later.

Air Canada cancelled 11 737 MAXs in March so it could have flexibility to order other aircraft, according to CFO Michael Rousseau. The change reduced Air Canada’s firm MAX order from 61 to 50

“It gave us some optionality on potentially some other planes we might want to look at in the middle of the decade,” Rousseau told the Wolfe Global Transportation Conference. “Those 11 were basically being delivered in the middle of this decade.”
---------- ADS -----------
 
rudder
Rank 11
Rank 11
Posts: 3848
Joined: Wed Mar 08, 2006 12:10 pm

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

Post by rudder »

FL320 wrote: Tue May 19, 2020 1:35 pm Sunwing’s 2020 domestic program to kick off June 26
https://www.travelweek.ca/news/sunwings ... f-june-26/

Transat is gonna wait and watch?
That is 6 round trip flights per week (12 segments) for the entire summer.

If the SWG European summer wet lease program is cancelled, then it will be running at about 2-3% capacity.

Can SWG or TRZ afford to be effectively closed until early November? I guess we will see.
---------- ADS -----------
 
Post Reply

Return to “Air Transat”