YOWgary

I mean, Airbus built the neoLR with a pretty specific eye towards thin TATL routes, and that's going to turn out to be much more important in the next two years than anyone thought.

If YYZ-LHR is currently down from eight widebody directs a day, to two, and routes like YYZ-FCO are down from three to none, then I don't think we're even talking about just secondary markets anymore. Heck, 7,600 km technically puts YYZ-HNL on the list of possibilities, although with the last half of the westbound over water, I'd have to imagine that one gets a tech stop on the outbound for safety's sake.

I wouldn't be shocked to see AC "test-restart" some of those Euro trunk routes on a smaller aircraft before throwing a 777 at it, especially if they can keep the widebodies profitably occupied hauling cargo or addressing faster-rebounding domestic traffic.

It'll be fun to watch!

On the other side of the coin, the advantage to leisure routes is that they're going to have fewer premium pax whose corporate policy will pay for J on any flight over X hours, regardless of cost, and consequently the absence of pods is less of a disadvantage on holiday routes.

tracon

https://www.routesonline.com/news/38...e-in-oct-2020/

12:20 westbound block time.
They must have pre planned, but not advertised the CDG tech stop.

YYCCL3

Found this on the runway today...

EU antitrust regulators have extended their deadline for a decision on Air Canada’s proposed acquisition of Canadian tour operator Transat by two weeks to Jan. 8.

The European Commission, which opened an investigation in May on concerns that the deal could push up prices and reduce choice for flights between Europe and Canada, said the extension was applied in agreement with the two companies.

https://www.reuters.com/article/tran...-idUSL1N2HS1KB

tcook052

Seen & noted:

Transat executives take a hit from reduced value of sale to Air Canada: proxy

MONTREAL -- Nearly two dozen Transat A.T. executives and directors will see their proceeds from the company's sale to Air Canada drop following a dramatic reduction in the transaction's value.

They will split about $13 million for the shares of Air Transat's parent company and other financial instruments they hold, according to a circular sent to shareholders ahead of the Dec. 15 meeting to vote on the revised deal.

The sum is lower than the estimated $35 million they would have shared when the country's largest airline was willing to pay $18 for each Transat A.T. share in a transaction valued at $ 720 million.

Transat Seeks to Allay Antitrust Issues in Air Canada Reviews

Transat AT Inc. told shareholders it�s seeking to allay antitrust issues pinpointed by the European Union over its takeover by Air Canada and hopes to win approval by February.

The company said in a letter dated Nov. 12 that it�s working with Air Canada �to address the concerns raised� by the European Commission in a so-called statement of objections sent late September.

Transat said efforts to win over regulators in the EU, as well as Canada, could include �the offer of remedies, which should provide a greater chance of obtaining the required approvals� by February.

EdmFlyBoi

https://www.reuters.com/article/us-t...-idUSKBN2860ZT

What might these concessions be? Allowing Westjet access to LHR (probably not)?

YZF_Elite

Why would LHR access be an issue? Doesn't TS fly to LGW?

EdmFlyBoi

Concessions would generally be giving up slot pairs at slot controlled airports. There are a fair number of level 3 airports but AC doesn�t have a large number of slot pairs at airports other then LHR, FRA, CDG, and possibly ZRH (at least off the top of my head). What else would the concessions be?

YZF_Elite

I don't think regulators normally would require a concession at an airport where no competition is being removed. I could see AC/TS slots at CDG having to be given up, but really I'm not sure how anyone can really even determine what competition even exists or would be removed at the moment, I don't envy the regulators.

Adam Smith

The challenge for AC, in this case, is that selling slots doesn't necessarily address the competition issue. In deals in the US where regulators enforced slot sales, the concern was largely about one airline's dominance and pricing power at a particular airport. They were concerned that AA was going to control >X% of the slots at DCA, for instance, and so made AA sell or swap some slots with someone else (don't ask me what X was, it was a while ago). They weren't terribly fussed about exactly what routes were going to have less competition.

In the case of the AC/TS deal, the EU is concerned about competition on particular city pairs. If AC sells off a CDG slot to Emirates so it can add another DXB-CDG, that does nothing to improve the competitive situation on the YUL- or YQB-CDG routes. AC would not only need to sell the slot, but sell it someone who intended to start service that would help fill the competitive void left by AC absorbing TS. That's not very likely.

I'd say there's a good chance that AC is discussing other potential remedies. It could, for instance, offer to cap fares on the route for a certain period of time, or make a certain number of seats available at or below a certain price point, commit to operating a certain number of seats on the route, allow the EU to review and approve or deny fare increases on the route, some combination thereof, etc...

Indeed. These reviews focus on the impact of the merger. So something like ZRH, which is not served by TS, or AGP, which is not served by AC, is likely not impacted and not a concern for the EU competition authorities.

The EU has acknowledged that challenge, but said they'll generally be looking at things on a pre-COVID basis.

24left

QUOTE:

"Arrangement Agreement with Air Canada

Under the terms of the binding arrangement agreement entered into by the Corporation and Air Canada dated October 9, 2020, and unanimously approved by the Board, Air Canada will acquire all issued and outstanding shares of Transat for $5.00 per share, payable at holders' option either in cash or shares of Air Canada, or a combination thereof. Air Canada shares issuable under the share exchange option will be issued at a fixed price of $17.47 per Air Canada share, representing a fixed exchange ratio of 0.2862 Air Canada share per Transat share. For illustrative purposes only, on December 4, 2020, the closing price of the Air Canada shares on the Toronto Stock Exchange was $27.50. Based on that closing price, the implied purchase price for Transat would be $7.87 per share for shareholders selecting the share exchange option."

Full release

https://www.transat.com/en-CA/corpor...eleases/124343

Adam Smith

No real surprise there. Even if AC's share price hadn't skyrocketed since the new terms were announced, this would have been a no-brainer for TS shareholders, but the run-up in the AC share price has certainly made this look even better.

tcook052

Air Transat Expects Air Canada Acquisition Completion By February

Air Transat has shared this week that it expects that the airline�s acquisition by Air Canada will be complete by February. The Montreal-based carrier is hopeful about the transaction but is waiting for authorities to confirm approval.

jasdou

There has been rumours of an announcement about a new Aeroplan partner airline recently. It would make sense that this mystery airline is Transat and that it gets confirmed as soon as the transaction goes through. Prior to the acquisition of Aeroplan by AC, TS had already negotiated a deal with Aeroplan so there are already elements of the partnership most likely already in place. I expect we will be able to redeem Aeroplan points for TS flights soon.

EdmFlyBoi

https://www.bnnbloomberg.ca/transat-...n-q4-1.1535363

Transat has warned that it may need $500 million in funding if the merger isn't completed. How does this weigh in regulators decision making?

Adam Smith

I doubt it. That announcement came when Aimia was working on post-AC strategies for Aeroplan. They had also announced deals with Porter and a number of other partners that have not gone through.

TS is only likely to get involved with Aeroplan if the acquisition goes through.

Likely not much. Remember that most airlines in North America have raised a bunch of capital from markets this year. TS was prevented from doing so because it would have torpedoed the AC deal. So that's just an acknowledgement that they need to catch up to what the rest of the industry has been doing.