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craneSpotter May 13, 2019 6:14 PM

Quote:

Originally Posted by thenoflyzone (Post 8571603)
Wonder if Onex will be going after Transat next.

Maybe - would be a good fit. However there is no way TRZ would get the premium offer WJA received.

thenoflyzone May 16, 2019 1:39 AM

ORD finally posted December 2018 numbers. The list is complete.

2018 International passenger numbers

1. JFK 33.8 million (+3.7%)
2. YYZ 31.6 million (+6.7%)
3. LAX 26.05 million (+4.4%)
4. MIA 21.86 million (+1.9%)
5. CUN 16.4 million
6. PTY 16.2 million
7. MEX 15.75 million
8. SFO 14.22 million (+5.9%)
9. EWR 14.1 million (+9.7%)
10. ORD 13.95 million (+11.9%)
11. YVR 13.49 million (+8.5%)
12. ATL 12.5 million (+3.6%)
13. YUL 12.27 million (+9.2%)
14. IAH 10.73 million (+3.7%)
15. DFW 8.74 million (+2.7%)
16. FLL 8.61 million (+19.8%)
17. BOS 7.58 million (+5.3%)

p_xavier May 16, 2019 12:35 PM

Air Canada is buying Transat it seems.

thenoflyzone May 16, 2019 12:42 PM

Seems AC got a good deal. $520 million is a steal for TS and its parent company. Their assets are worth $1.5B.

Glad to see the company will stay in Quebec and that the jobs at TS seem secure (for now). For the consumer however, that is one less competition on the transatlantic/Caribbean front. So prices will creep up.

After the merger, YUL will become a fortress hub, even if the TS brand stays separate.

https://aircanada.mediaroom.com/2019...-two-Companies

Quote:

Combination of two Quebec-based travel leaders to benefit all stakeholders; Control of Transat A.T. Inc. to remain in Quebec
•Purchase of all outstanding Transat A.T. Inc. shares at $13 per share, subject to confirmatory due diligence, regulatory and shareholder approvals and final documentation.
•Combination of two respected Quebec-based aviation and travel brands to create Montreal-based global leader in leisure, tourism and travel distribution offering Canadians choices to more destinations and promoting two-way tourism.
•Made-in-Quebec solution to maintain high-quality head office jobs and key functions in Montreal as well as provide a platform for future growth and employment.

MONTREAL, May 16, 2019 /CNW Telbec/ - Air Canada announced today that it has entered into an exclusive agreement with Transat A.T. Inc. (Transat) regarding the proposed purchase by Air Canada of all issued and outstanding shares of Transat and its combination with Air Canada. The proposed transaction, valued at approximately $520 million or $13.00 per share of Transat (on a fully-diluted basis), will create a Montreal-based global travel services company in leisure, tourism and travel distribution operating across Canada and internationally. Air Canada has all the necessary funding required to complete the transaction which is accordingly not subject to financing conditions.

"A combination with Transat represents a great opportunity for stakeholders of both companies. This includes the shareholders of both Transat and Air Canada, employees of both companies, who will benefit from increased job security and growth prospects, and Canadian travellers, who will benefit from the merged company's enhanced ability to participate as a leader in the highly competitive leisure travel market globally. The acquisition presents a unique opportunity to compete with the very best in the world when it comes to leisure travel. It will also allow us to further grow our hub at Montréal-Trudeau Airport, where we have added 35 new routes since 2012 to the benefit of the Montreal and Quebec communities, and from which we carried 10 million customers in 2018 alone," said Calin Rovinescu, President and Chief Executive of Air Canada.

The transaction remains subject to the finalization of definitive agreements, confirmatory due diligence, regulatory and shareholder approvals and other closing conditions usual in this type of transaction. There is no assurance that the transaction will be completed as described in this news release or at all. No further announcements are expected to be made by Air Canada until the signature of the definitive agreements unless required by law. Air Canada has retained Morgan Stanley as its financial advisor.

Dirt_Devil May 16, 2019 12:59 PM

Quote:

Originally Posted by thenoflyzone (Post 8575019)
Seems AC got a good deal. $520 million is a steal for TS. Their assets are worth $1.5B.

Glad to see the company will stay Canadian and that the jobs at TS seem secure (for now). For the consumer however, that is one less competition on the transatlantic/Caribbean front. So prices will creep up.

After the merger, YUL will become a fortress hub, even if the TS brand stays separate.

Could AC and TS codeshare?

esquire May 16, 2019 1:12 PM

So does AC Rouge get rolled into Transat (or vice versa)?

LO 044 May 16, 2019 2:12 PM

I hope Montrealers like high airfares. The fortress hub will more likely be called a monopoly hub. I don't think any airport in Canada is slot constrained except maybe YYZ so i don't know what measures the competition bureau can take to avoid the monopoly in that region. Saying that, this is Quebec so it will probably be rubber stamped.

craneSpotter May 16, 2019 2:35 PM

Quote:

Originally Posted by thenoflyzone (Post 8575019)
Seems AC got a good deal. $520 million is a steal for TS and its parent company. Their assets are worth $1.5B.

It's still a premium to the enterprise value. There is nearly 1 Billion in liabilities, plus other downsides such as poor financial performance lately.

CityTech May 16, 2019 2:45 PM

Needs to be rejected. Will lead to too much of a monopoly.

craneSpotter May 16, 2019 3:08 PM

Quote:

Originally Posted by CityTech (Post 8575164)
Needs to be rejected. Will lead to too much of a monopoly.

I think that would be true if AC was trying to buy Porter. Transat is a leisure/charter airline.

Cage May 16, 2019 4:04 PM

Quote:

Originally Posted by thenoflyzone (Post 8575019)
Seems AC got a good deal. $520 million is a steal for TS and its parent company. Their assets are worth $1.5B.

Glad to see the company will stay in Quebec and that the jobs at TS seem secure (for now). For the consumer however, that is one less competition on the transatlantic/Caribbean front. So prices will creep up.

After the merger, YUL will become a fortress hub, even if the TS brand stays separate.

https://aircanada.mediaroom.com/2019...-two-Companies

I expect the airline component will be rolled into Rouge. The A310s will be out of the fleet as soon as replacement A321s can be found. Also gone will be the 737NGs. Between the 310s and 737NGs, one or both could face the same fate as the CP DC10s, which were mothballed by old company before the merger transaction was complete.

However I suspect the tour operator component of TransAt AT will remain separate. AC Vacations might even get rolled into the TransAt Holidays as the selling arm of the combined unit.

The odd piece out are the Hotels. AC doesnt have a track record of running hotels and neither does any airline group. I expect this component will be sold off with 18 months.

p_xavier May 16, 2019 4:20 PM

Quote:

Originally Posted by CityTech (Post 8575164)
Needs to be rejected. Will lead to too much of a monopoly.

AC will need to pay 40M$ if it goesn't go through approbations.
Quote:

Air Canada devrait pour sa part lui verser 40 millions si l'entente devait être « résiliée au motif que les approbations des autorités réglementaires ou gouvernementales requises n'ont pas été obtenues ».

Cage May 16, 2019 5:28 PM

Quote:

Originally Posted by CityTech (Post 8575164)
Needs to be rejected. Will lead to too much of a monopoly.

The long term play here is to create a third viable domestic airline, most likely at the ULCC level. I'm thinking a Flair type of airline, although Sunwing could also fit the mission.

In 3-5 years Canada could have 2 Global Network Airlines that are both viable (something that hasn't existed since the mid 80s). In addition there will be capacity for 1-2 ULCC type operations.

What happens immediately following consolidation of the domestic airline business is a number of new entrants becoming immediately viable. Nature abhors a vacuum.

In the mid to late 80s after CP/Nordair/EPA/CalmAir/PWA/Wardair merged in to Canadian, a number of airlines started up. Namely Air Transat (1987), Canada 3000 (1988), Nationair, and a few one hit wonders.

In the early 2000s after the AC/CP merger there was WestJet (major expansion), Royal Aviation/Jetsgo (I'm combining two Michel LeBlanc ventures), CanJet, Sunwing, SkyService, etc.

I am confident that history will repeat itself.

whatnext May 16, 2019 7:13 PM

Quote:

Originally Posted by CityTech (Post 8575164)
Needs to be rejected. Will lead to too much of a monopoly.

Quebec wants a sale to another Quebec-based company, AC fits that (if only nominally). Case closed, this will be approved.

craneSpotter May 17, 2019 1:58 AM

Quote:

Originally Posted by whatnext (Post 8575501)
Quebec wants a sale to another Quebec-based company, AC fits that (if only nominally). Case closed, this will be approved.

Yup - it played a big role - Quebec's premier is one of the founders of Transat, too. You can bet that ONEX was trying to talk to Transat about a buyout as well.

MTLskyline May 17, 2019 3:03 AM

Curious what portion of Air Transat's routes duplicate Air Canada ones?

isaidso May 17, 2019 4:26 AM

Quote:

Originally Posted by craneSpotter (Post 8575191)
I think that would be true if AC was trying to buy Porter. Transat is a leisure/charter airline.

Transat is usually cheaper than Air Canada. After a merger, it would be in Air Canada's interest to eliminate the price gap as consumers wouldn't have an alternative. And it would be Transat prices increasing not Air Canada seats decreasing down to what Transat charges.

zahav May 17, 2019 5:38 AM

There is a lot of overlap in routes for sure, both summer routes to Europe and to sun spots in winter, there will have to be some merging. I do wonder if they will ditch rouge and just keep TS for leisure. It will help AC a lot in freeing up routes for mainline though, right now there's still leisure routes that are operated by AC that TS would be good for

Pinus May 17, 2019 9:15 AM

Quote:

Originally Posted by Cage (Post 8575284)
I expect the airline component will be rolled into Rouge. The A310s will be out of the fleet as soon as replacement A321s can be found. Also gone will be the 737NGs. Between the 310s and 737NGs, one or both could face the same fate as the CP DC10s, which were mothballed by old company before the merger transaction was complete.

However I suspect the tour operator component of TransAt AT will remain separate. AC Vacations might even get rolled into the TransAt Holidays as the selling arm of the combined unit.

The odd piece out are the Hotels. AC doesnt have a track record of running hotels and neither does any airline group. I expect this component will be sold off with 18 months.

I hope they keep the term "Holidays" instead of "Vacations". The less American influences we have in Canada, the better.

thenoflyzone May 17, 2019 12:27 PM

Quote:

Originally Posted by Cage (Post 8575284)
The A310s will be out of the fleet as soon as replacement A321s can be found. Also gone will be the 737NGs. Between the 310s and 737NGs, one or both could face the same fate as the CP DC10s, which were mothballed by old company before the merger transaction was complete.

The A310s are alreadly on their way out. The 737NG's were planned to leave the fleet as well, once more A321s are delivered.

Transat press release from last year confirming that the airline was going All Airbus by 2024. (A330s/A321s)

https://www.newswire.ca/news-release...686665781.html

AC's acquisition will simply accelerate that plan.

Quote:

Originally Posted by LO 044 (Post 8575115)
I hope Montrealers like high airfares. The fortress hub will more likely be called a monopoly hub. I don't think any airport in Canada is slot constrained except maybe YYZ so i don't know what measures the competition bureau can take to avoid the monopoly in that region. Saying that, this is Quebec so it will probably be rubber stamped.

You wont find many free slots at YVR or YUL during peak times either.

YYZ and YVR are both level 3 slot coordinated airports (IATA). YUL and YYC are level 2.

IATA definitions

Level 2: airports where there is potential for congestion during some periods
of the day, week, or season which can be resolved by schedule adjustments
mutually agreed between the airlines and facilitator. A facilitator is appointed
to facilitate the planned operations of airlines using or planning to use the
airport.

Level 3: airports where capacity providers have not developed sufficient
infrastructure, or where governments have imposed conditions that make it
impossible to meet demand. A coordinator is appointed to allocate slots to
airlines and other aircraft operators using or planning to use the airport as a
means of managing the declared capacity.


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