Originally Posted by
canopus27
Which obviously leads to the question of what AC is getting out of it.
If the biggest benefit to AC is to take over the routes ... as I suspect it is ... one wonders what the competition board will think of that.
Big advantages I can see:
- Remove its biggest Canadian competitor on flights to Europe (and likely Caribbean) = increased pricing power (hello competition bureau is anybody listening)
- Ability to consolidate some destinations where both carriers are not able to fill planes because they have competing flights
- Create increased scale in the vacations market (but is there any money to be made there) - maybe ACV can learn from Transat vacations
- Own multiple brands so if a consumer is unhappy with one, they still choose another of "your" brands.
- Opportunity to consolidate back-office expenses (but they claim they will be keeping both head offices - hello Quebec are you buying that bit of swampland?
- Opportunity to squeeze vendors for lower prices (AC will compare what they pay vs. what Trnsat was paying and will force vendors to sell to both at the lower (or even lower) price
- Eventually figure out which are your strongest brands and potentially eliminate overlap (so for example Rouge might be absorbed into Transat (goodbye Altitude benefits to us and cost to AC). AC Vacations might be shut down and merged into Transat vacations - AC might even decide to diversify into leisure hotels (hopefully not).
- see #1 (again and again)