AC and TRZ Agree to Terminate Arrangement

[Fanblade]

Keep an eye on what the Feds do with the quarantine requirements. If the 14 day remain-at-home rule is extended through the summer it will have a significant impact on international travel demand (inbound).

It's time to open the country and get everyone back to work. I'm getting tired of watching the PM repeat the same message day after day with the only new info being "Who won the Trudeau Jackpot Lottery today?". His spending is looking more like vote purchasing than economic stimulus, and I'm happy he supported airlines with regards to the voucher but disappointed that he's playing games on a stimulus package to help them. I wouldn't back stimulus if it was due to bad management and corporate practices and I give credit to the airlines for planning ahead and being ready for bad times .. but these are beyond what anyone could plan for.

Many other countries and at least 2 U.S. states also have 14 day international arrival quarantine orders in place. Even Hawaii is quarantining US citizens arriving from the mainland.

The summer will be a write off for international passenger airlines.

Just this summer? I’m thinking winter 2020/21 as well. Tam has said quarantine will remain in effect for people arriving in Canada as a best practice measure for the foreseeable future.

So you vacation in Mexico and have to quarantine on return. You travel to the UK and you have to quarantine twice. Once on arrival in the UK and again when you return to Canada. I guess it is about concern over a second wave.

If a second wave does emerge, and this is likely, this winter will also be a write off.

Moreover interprovincial travel will remain restricted to essential only, until phase 3 of most provinces reopening plan. A second wave will push phase 3 down the road. I can’t travel to whistler this winter unless rules get changed.

I see the industry locked in its current state until summer 2021 assuming a second wave.

So the million dollar question. Which airlines/travel industry at large survive a year plus under these conditions?

[altiplano]

The house of cards that is excessive covid restrictions will topple. Governments and politicians in most cases need to be re-elected at some point, and continuing down this ill defined path won't achieve that for them.

It is becoming clear to the people that it has gone too far and the world will move on soon... some will howl, but the media will get their next story and the next news cycle crisis will begin.

[sanjet]

The house of cards that is excessive covid restrictions will topple. Governments and politicians in most cases need to be re-elected at some point, and continuing down this ill defined path won't achieve that for them.

It is becoming clear to the people that it has gone too far and the world will move on soon... some will howl, but the media will get their next story and the next news cycle crisis will begin.

The next news cycle should be the rampant fraud and theft in billions that happened with these government programs. It’s going to be embarrassing. I’ve spoken to someone up higher in the bank sector, they think easy 10-15% minimum have been on false claims that were easily identified. Going to be scary when they start looking harder.

I’ll be watching if the media even covers it.

[Localizer]

The next news cycle should be the rampant fraud and theft in billions that happened with these government programs. It’s going to be embarrassing. I’ve spoken to someone up higher in the bank sector, they think easy 10-15% minimum have been on false claims that were easily identified. Going to be scary when they start looking harder.

I’ll be watching if the media even covers it.

The National touched on the topic a few days ago, they interviewed a manager from a shelter in Vancouver, he's concerned because homeless street people are collecting CERB and he's worried what will happen when the government comes collecting from these people. I watched it and thought to myself "ya that's a tough situation", I then sprang back to reality as asked myself "WTF I thought CERB was for people who lost their jobs due directly to Covid-19?". We will all be paying for this ... the government has gone on record to say "no tax increases" .. bullish*t.

[Jimmy_Hoffa]

It's time to open the country and get everyone back to work. I'm getting tired of watching the PM repeat the same message day after day with the only new info being "Who won the Trudeau Jackpot Lottery today?". His spending is looking more like vote purchasing than economic stimulus, and I'm happy he supported airlines with regards to the voucher but disappointed that he's playing games on a stimulus package to help them. I wouldn't back stimulus if it was due to bad management and corporate practices and I give credit to the airlines for planning ahead and being ready for bad times .. but these are beyond what anyone could plan for.

Many other countries and at least 2 U.S. states also have 14 day international arrival quarantine orders in place. Even Hawaii is quarantining US citizens arriving from the mainland.

The summer will be a write off for international passenger airlines.

Just this summer? I’m thinking winter 2020/21 as well. Tam has said quarantine will remain in effect for people arriving in Canada as a best practice measure for the foreseeable future.

So you vacation in Mexico and have to quarantine on return. You travel to the UK and you have to quarantine twice. Once on arrival in the UK and again when you return to Canada. I guess it is about concern over a second wave.

If a second wave does emerge, and this is likely, this winter will also be a write off.

Moreover interprovincial travel will remain restricted to essential only, until phase 3 of most provinces reopening plan. A second wave will push phase 3 down the road. I can’t travel to whistler this winter unless rules get changed.

I see the industry locked in its current state until summer 2021 assuming a second wave.

So the million dollar question. Which airlines/travel industry at large survive a year plus under these conditions?

Without more than loans from government, there will be none left. Better question is how many will the government let enter CCAA before they change their current path.
This messaging seems to be wearing thin on my circle of reference. Soon this issue becomes more political and economical than safety.

[Fanblade]

I agree.

Rudder nailed it on the last page.

Watch the Feds and their quarantine requirements

Keep an eye on what the Feds do with the quarantine requirements. If the 14 day remain-at-home rule is extended through the summer it will have a significant impact on international travel demand (inbound).

[Fanblade]

EU antitrust regulators to investigate Air Canada, Transat deal


https://www.reuters.com/article/us-tran ... SKBN2311GV


Air Canada, Transat deal faces intense EU antitrust scrutiny

https://www.reuters.com/article/transat ... SL1N2D70IH

[altiplano]

Regulators set a Sept. 30 deadline for their decision.

4 months is going to seem like an awfully long time in this environment.

[Sharklasers]

The fact that AC refused to make concessions to the European regulators is really telling as to their level of commitment to the deal, market is responding as well.

[FL320]

The fact that AC refused to make concessions to the European regulators is really telling as to their level of commitment to the deal, market is responding as well.

They say both companies; be careful to the confirmation bias
How do you expect the market to respond..jump to 18$? Lol

[Sharklasers]

The fact that AC refused to make concessions to the European regulators is really telling as to their level of commitment to the deal, market is responding as well.

They say both companies; be careful to the confirmation bias

What say on concessions would the purchasee get?

This is not good news for Transat no matter how you slice it.

[Kapitanov]

Probably the best outcome or news that Transat could get so far in the current situation; delays. There is no way AC would be able to absorb the transaction right now (mid-2020 was the estimate initially).

Holding on and waiting for an extra 4 months will be hard for Transat I guess, but at least it gives them a chance to return to a better social/financial environment that would make the acquisition viable.

But definitely raising big question marks on the outcome of this transaction.

[aerodude]

Probably the best outcome or news that Transat could get so far in the current situation; delays. There is no way AC would be able to absorb the transaction right now (mid-2020 was the estimate initially).

Holding on and waiting for an extra 4 months will be hard for Transat I guess, but at least it gives them a chance to return to a better social/financial environment that would make the acquisition viable.

But definitely raising big question marks on the outcome of this transaction.

The longer this goes out, the worst the balance sheet transat will have (just like all airlines i guess). There will be close to zero revenue for LCC's like TRZ this summer. Its actually not good at all the longer this plays out for TRZ.

[Kapitanov]

Probably the best outcome or news that Transat could get so far in the current situation; delays. There is no way AC would be able to absorb the transaction right now (mid-2020 was the estimate initially).

Holding on and waiting for an extra 4 months will be hard for Transat I guess, but at least it gives them a chance to return to a better social/financial environment that would make the acquisition viable.

But definitely raising big question marks on the outcome of this transaction.

The longer this goes out, the worst the balance sheet transat will have (just like all airlines i guess). There will be close to zero revenue for LCC's like TRZ this summer. Its actually not good at all the longer this plays out for TRZ.

Totally true. But it's either AC pulls out of the transaction right now or Transat waits and hope for the best. Even if their balance sheet takes a huge hit by waiting, at least there is still a (small?) chance that AC buys them (at a lower price probably). Next Transat earnings release on June 11th if I'm not mistaken will be a turning point in my opinion.

[Localizer]

Don't read too much into it .. it's just posturing.

The final decision rest with Garneau and the government .. he approved the Canadian North/First Air merger and that deal did create a monopoly. I have a feeling this deal is going to get the green light as a measure to help the health of the industry and part of a stimulus package, courtesy of the member from Papineau.

[sanjet]

Don't read too much into it .. it's just posturing.

The final decision rest with Garneau and the government .. he approved the Canadian North/First Air merger and that deal did create a monopoly. I have a feeling this deal is going to get the green light as a measure to help the health of the industry and part of a stimulus package, courtesy of the member from Papineau.

Government is always the wildcard, but the TRZ stock price certainly didn’t like the news today.

[Fanblade]

Don't read too much into it .. it's just posturing.

The final decision rest with Garneau and the government .

It's clear the EU wants concessions. That first of all will give AC an out, assuming they want one.

Two the EU's approval is just as important as Garneau's. Either has the ability to kibosh the deal. The EU doesn't have the political baggage that Garneau does. If they have any baggage it will likely be their own version of home field advantage. Maybe Air France concerns. The EU’s involvement makes this nothing like the Canadian North/First Air merger where Garneau did have the final say.

I would suggest the final decision does not rest with the Canadian federal government. I would say more so the EU, but ultimately AC. Certainly the Federal Government is a piece of the equation. But I don’t think they will be the toughest link. I think they are politically motivated to be pretty much be a sure thing. It’s the other two links that are a concern.

[rudder]

Don't read too much into it .. it's just posturing.

The final decision rest with Garneau and the government .. he approved the Canadian North/First Air merger and that deal did create a monopoly. I have a feeling this deal is going to get the green light as a measure to help the health of the industry and part of a stimulus package, courtesy of the member from Papineau.

Final decision rests with AC. Period.

[Sharklasers]

Don't read too much into it .. it's just posturing.

The final decision rest with Garneau and the government .. he approved the Canadian North/First Air merger and that deal did create a monopoly. I have a feeling this deal is going to get the green light as a measure to help the health of the industry and part of a stimulus package, courtesy of the member from Papineau.

Final decision rests with AC. Period.

Seems AC wants the cheap out. 20 million if the deal fails to get regulatory approval.

Its clear that the EU isnt 'just posturing' if the merger proceeds against the commission and is found in violation of their anti-trust legislation AC will face heavy fines and a possible ban on flying into europe. They wont risk that to acquire a failed airline and their associated baggage.

Maybe Mach is still interested?

[FL320]

They wont risk that to acquire a failed airline and their associated baggage.

As far as we know AT is still in business. Even CBC news doesn’t writte as much bullshit as you do

[airboy1]

Looks like deal is still very possible.

https://ca.finance.yahoo.com/news/europ ... 33455.html

[Sharklasers]

Looks like deal is still very possible.

https://ca.finance.yahoo.com/news/europ ... 33455.html

Of course it’s still possible. It’s just significantly less likely than it was yesterday, especially in light of the European commissions statement regard the unwillingness of the companies to agree to their concessions. Those required concessions are unlikely to change between now and September.

[rudder]

Looks like deal is still very possible.

https://ca.finance.yahoo.com/news/europ ... 33455.html

2 more unilateral 30 day extensions is Aug 25. Then it would rely on further ‘special circumstances’ extensions to get beyond Sept 30.

Simply proves that third parties march to their own timeline.

[FL320]

Whether you’re in favor or against the purchase; am I the only one thinking that this is an abuse from the European Commission ? How come they have so much power to interfere in a deal that is happening between 2 Canadian companies? Plus the fact that they had plenty of time to look at this transaction...
I wish Canada would drastically reduce all the slots they offer to all these European airlines coming here.

[Fanblade]

Whether you’re in favor or against the purchase; am I the only one thinking that this is an abuse from the European Commission ? How come they have so much power to interfere in a deal that is happening between 2 Canadian companies? Plus the fact that they had plenty of time to look at this transaction...
I wish Canada would drastically reduce all the slots they offer to all these European airlines coming here.

No. If two EU airlines proposed a merge their impact on the Canadian market would be assessed on routes to and from Canada. They are not over reaching.

The timing is interesting. It’s almost like they are saying don’t waste my time. The deal can be extended for 3 months from June 27 to September 27. The EU chose September 30. Is that coincidence?

Remember the EU did respond in the time frame that was expected. It was AC and Transat that refused to offer compromises according to the EU.

The European Commission said the companies had declined to offer concessions to address its concerns during its preliminary review of the deal. It set a Sept. 30 deadline for its decision.

That decision seems to have led to the need for further examination and a time frame extension