Transat revenues drop by 99%, with 2,000 layoffs expected

Discuss topics related to Air Transat.

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

Jumbo744
Rank 2
Rank 2
Posts: 93
Joined: Sun Jun 12, 2011 11:32 am

Transat revenues drop by 99%, with 2,000 layoffs expected

Post by Jumbo744 »

https://globalnews.ca/news/7326534/tran ... ronavirus/

Transat AT Inc. expects to permanently lay off at least 2,000 Canadian employees after revenues fell 99 per cent last quarter, when the travel company operated flights for just one week.

The layoffs would reduce the tour operator’s workforce by about 40 per cent and likely come after the end of the federal wage subsidy — currently scheduled to expire Dec. 19 — “if the situation does not improve rapidly,” CEO Jean-Marc Eustache said on a conference call.

Two-thirds of Transat’s 5,000 workers in Canada are already temporarily laid off, he said.

The announcement Thursday came alongside dire financial results, as the company saw net losses surge to $45.1 million in its third quarter from a loss of $1.5 million a year earlier.

The Montreal-based carrier grounded its planes between April 1 and July 22, leaving only nine days for flights to occur at the tail end of the quarter, unprecedented in Air Transat’s 34-year history.

“The situation is especially difficult in Canada. Restrictions at the border are particularly stringent, with the closure to foreigners and mandatory quarantine for Canadians coming back from any other country at least until Sept. 30,” Eustache said, echoing other airline CEOS.

The $720-million deal for Transat’s acquisition by Air Canada looks increasingly uncertain, the company suggested.

Airlines across the globe have reduced capacity, leaving a transformed market that could impact regulatory approvals, “especially regarding the appropriate package of remedies aimed at obtaining those approvals,” the company said in its release.

The additional financing Transat now seeks could also be an issue, as the covenants reached under its agreement with Air Canada restrict Transat’s ability to obtain new loans and may require Air Canada’s prior consent.

“Although the agreement provides that Air Canada’s consent may not be unreasonably withheld, there is no certainty that Air Canada will consent to the obtaining of additional sources of financing by the corporation,” the company said.

European regulators are expected to reach a conclusion on the deal by Dec. 12. The Trudeau government has not yet announced a decision, which “may come at any time,” Eustache said.

Transat operations remain severely curtailed. It is now flying out of 18 airports in Europe, the Caribbean and domestically in Montreal, Toronto, Calgary and Vancouver.

The company bled about $1.7 million in cash per day in the quarter ended July 31.

It lost $1.20 per share in the quarter compared with a loss of four cents per share a year earlier, while revenue totalled $9.5 million, down from $698.9 million.

On an adjusted basis, Transat said it lost $3.70 per share for the quarter compared with an adjusted profit of 16 cents per share in the same quarter last year.
---------- ADS -----------
 
paddy
Rank 3
Rank 3
Posts: 186
Joined: Thu Jan 26, 2006 8:37 pm

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by paddy »

Terrible news. Time for the government to step up and acknowledge the direct relationship between the struggling airline industry and current government imposed travel restrictions. Time for financial assistance.

How many of these poor folks are pilots?
---------- ADS -----------
 
JoeyBarton
Rank 3
Rank 3
Posts: 145
Joined: Wed Mar 26, 2014 6:02 am

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by JoeyBarton »

Permanently? Not even subject to recall rules?
---------- ADS -----------
 
planebored
Rank 3
Rank 3
Posts: 153
Joined: Wed Sep 02, 2020 10:24 am

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by planebored »

Lots of jobs in airlines that don't have recall rights. We just saw that at WestJet with the mass permanent layoffs.

I'm sure FAs and Pilots will still keep them, might be a while though.
---------- ADS -----------
 
Fanblade
Rank (9)
Rank (9)
Posts: 1118
Joined: Mon Mar 28, 2011 8:50 pm

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by Fanblade »

The term permanent means lost jobs. In other words Transat expects its employee count to drop by 2000 people permanently.

Recall rights for furloughed employees to the remaining positions once attrition takes place is a separate issue. Most people in a collective agreement have recall rights.

All this will be moot if aid is not extended to the industry. Liquidation is permanent for every last employee.

If you are in a carbon producing sector this government will happily see it shrink. Just ask Alberta and Newfoundland how that works. We are going to come out of this as a smaller industry in Canada. Not just because of Covid. The government wants it that way. They see Covid as an opportunity to reduce carbon emissions. They won’t say it to your face. They will just issue platitudes and do nothing as it happens.
---------- ADS -----------
 
planebored
Rank 3
Rank 3
Posts: 153
Joined: Wed Sep 02, 2020 10:24 am

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by planebored »

So who thinks Air Canada is still buying? :lol:
---------- ADS -----------
 
Dh8Classic
Rank 3
Rank 3
Posts: 184
Joined: Thu Mar 01, 2012 11:30 am

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by Dh8Classic »

Fanblade wrote: Thu Sep 10, 2020 10:27 am All this will be moot if aid is not extended to the industry. Liquidation is permanent for every last employee.

If you are in a carbon producing sector this government will happily see it shrink. Just ask Alberta and Newfoundland how that works. We are going to come out of this as a smaller industry in Canada. Not just because of Covid. The government wants it that way. They see Covid as an opportunity to reduce carbon emissions. They won’t say it to your face. They will just issue platitudes and do nothing as it happens.
I have said this on other threads but it makes me so angry how people vote in this country.

The parties that wanted more of this green future got over 80% of the vote in Quebec and nearly 65% of the vote in Ontario. Maybe you had ulterior motives when your voted but in the end, most of you are getting what you voted for, a new career at an Amazon warehouse(or something similar).
---------- ADS -----------
 
FL-280
Rank 4
Rank 4
Posts: 287
Joined: Fri Jan 20, 2017 6:45 pm

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by FL-280 »

Who the f knows! But it sure as hell wont be for 720 M$
---------- ADS -----------
 
Jean-Luc Monette
Rank 3
Rank 3
Posts: 105
Joined: Thu May 17, 2012 9:47 am
Location: The Laurentians, QC

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by Jean-Luc Monette »

Call me crazy, but buying a 750M house in which there’s a safe containing 576.4M cash with a garage full of cheap efficient airplanes with many more coming still seems a somewhat good proposition to me...
---------- ADS -----------
 
Jean-Luc Monette
Rank 3
Rank 3
Posts: 105
Joined: Thu May 17, 2012 9:47 am
Location: The Laurentians, QC

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by Jean-Luc Monette »

planebored wrote: Thu Sep 10, 2020 12:09 pm So who thinks Air Canada is still buying? :lol:
2000 people losing their job permanently and that’s what you post???
---------- ADS -----------
 
FL-280
Rank 4
Rank 4
Posts: 287
Joined: Fri Jan 20, 2017 6:45 pm

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by FL-280 »

579 of cash but 638 of tickets that have not been cancelled, that is considered short term debt.... so what now? Transat was looking very strong at the beginning of the pandemic, I was impressed but it's ability to reduce cashburn... After going through Q3 numbers I don't feel the same..

To bring back the house, the mortgage on it is worth more than the market value....
---------- ADS -----------
 
Last edited by FL-280 on Thu Sep 10, 2020 1:20 pm, edited 1 time in total.
planebored
Rank 3
Rank 3
Posts: 153
Joined: Wed Sep 02, 2020 10:24 am

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by planebored »

Jean-Luc Monette wrote: Thu Sep 10, 2020 1:10 pm Call me crazy, but buying a 750M house in which there’s a safe containing 576.4M cash with a garage full of cheap efficient airplanes with many more coming still seems a somewhat good proposition to me...
Most of that cash is un-refunded customer tickets.

It sure sucks people are losing jobs, but he so are thousands in every other area of aviation. Air Transat is not alone, and I certainly don't want to see AC come in and be savior when they can't even keep their own employees on the payroll.

The deal was dead as soon as Covid hit. Before that, I was somewhat in favor... now I'm not.
---------- ADS -----------
 
Jean-Luc Monette
Rank 3
Rank 3
Posts: 105
Joined: Thu May 17, 2012 9:47 am
Location: The Laurentians, QC

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by Jean-Luc Monette »

So I would venture that a huge part of AC’s cash comes from the same source as well, i-e unrefunded passenger tickets...
---------- ADS -----------
 
Jean-Luc Monette
Rank 3
Rank 3
Posts: 105
Joined: Thu May 17, 2012 9:47 am
Location: The Laurentians, QC

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by Jean-Luc Monette »

So I would venture that a huge part of AC’s cash comes from the same source as well, i-e unrefunded passenger tickets as well...
---------- ADS -----------
 
FL-280
Rank 4
Rank 4
Posts: 287
Joined: Fri Jan 20, 2017 6:45 pm

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by FL-280 »

Absolutely! 2.6 Billion $ worth with just shy of 9 ish Billion $ of cash on Q2 statement
---------- ADS -----------
 
Fanblade
Rank (9)
Rank (9)
Posts: 1118
Joined: Mon Mar 28, 2011 8:50 pm

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by Fanblade »

If someone ordered the airlines to refund all tickets right now?

Transat would have to file for CCAA. AC would not..............yet. It would however reduce AC’s ability to weather this by about 5-6 months.

It is the reason no one has forced the refunds.

Sunwing and Westjet are not publicly traded so it is impossible to tell where they sit.
---------- ADS -----------
 
Fanblade
Rank (9)
Rank (9)
Posts: 1118
Joined: Mon Mar 28, 2011 8:50 pm

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by Fanblade »

Fanblade wrote: Thu Sep 10, 2020 10:27 am
If you are in a carbon producing sector this government will happily see it shrink. Just ask Alberta and Newfoundland how that works. We are going to come out of this as a smaller industry in Canada. Not just because of Covid. The government wants it that way. They see Covid as an opportunity to reduce carbon emissions. They won’t say it to your face. They will just issue platitudes and do nothing as it happens.
Rex Murphy has it figured out. Just replace oil industry with Carbon producing industry.


https://nationalpost.com/opinion/rex-mu ... 696fe228b/

In Newfoundland, the blows just keep on coming
Husky's announcement about the West White Rose extension adds misery to a province whose times of plenty are now well behind it

If the new premier, or the local oil industry, really think there will be support for the offshore oil industry from the Trudeau government, there is no hope for either. To the Liberals, oil and gas are seen as evil commodities and, for those provinces whose economies are built around those industries, receiving help from the federal government amounts to a dream of hope over experience .
---------- ADS -----------
 
tsgas
Rank 7
Rank 7
Posts: 531
Joined: Sun Feb 29, 2004 12:53 pm

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by tsgas »

Jean-Luc Monette wrote: Thu Sep 10, 2020 1:10 pm Call me crazy, but buying a 750M house in which there’s a safe containing 576.4M cash with a garage full of cheap efficient airplanes with many more coming still seems a somewhat good proposition to me...
FYI , Transat doesn't own one single airplane, every airplane that you mention are 'LEASED' , and with a Global recession , these aircraft are abundant and really cheap at "Today's Lease Rates".
---------- ADS -----------
 
TFTMB heavy
Rank 5
Rank 5
Posts: 390
Joined: Mon Feb 16, 2004 9:58 am

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by TFTMB heavy »

FL-280 wrote: Thu Sep 10, 2020 1:39 pm Absolutely! 2.6 Billion $ worth with just shy of 9 ish Billion $ of cash on Q2 statement
How much if that is raised capital/loans since the beginning of the pandemic? TS has not borrowed any money yet.
---------- ADS -----------
 
Yycjetdriver
Rank 4
Rank 4
Posts: 268
Joined: Fri Nov 04, 2016 11:00 pm

Re: Transat revenues drop by 99%, with 2,000 layoffs expected

Post by Yycjetdriver »

Fanblade wrote: Thu Sep 10, 2020 2:03 pm If someone ordered the airlines to refund all tickets right now?

Transat would have to file for CCAA. AC would not..............yet. It would however reduce AC’s ability to weather this by about 5-6 months.

It is the reason no one has forced the refunds.

Sunwing and Westjet are not publicly traded so it is impossible to tell where they sit.
The CEO of Westjet has said on record(company info sessions) if refunds are forced it would be a final blow. What Onex would do at that point only they know, but Westjet could not weather that decision alone.
---------- ADS -----------
 
Post Reply

Return to “Air Transat”