robsaw

Quarter ending Jan '19 operating loss of $52.6M.
Year ending Dec '18 operating loss of $44.6M

cedric

What evidence do you have of that? The Competition Bureau would be very interested.
If you've ever noticed that over the years on certain routes like YVR-SFO AC and UA sometimes have flights within a few minutes of each other, that's a direct reflection of the inability the two airlines have to co-ordinate schedules and fares.

Background: https://skift.com/2017/02/13/air-can...rust-immunity/

FlyerTalker70

I'm not saying AC has good operations. There's a whole thread talking about how awful AC's OTP is. However, AC has decent GTP (get there performance). While I have had to wait at times several hours to get to my destination I'll finally get there. The 3 times I travelled with TS in '16-'17 they all had rolling delays and cancellations. Hence their GTP is 0 in my books. My parents who used them once or twice in '12-'13 had decent GTP although OTP wasn't great with 2-3 hour delays which I suppose isn't too bad for a puddle hopper route like YYZ > LGW.

I have yet to see any evidence that AC doesn't have a monopoly in most of the routes they serve. We could argue about whether AC has a monopoly on, say, YYZ > YYC but I doubt there will be anyone would argue that AC has a monopoly on most international routes and quite a few substantial ones (i.e. YUL > YSJ anyone?). One thing I will say is that this current monopoly (or oligopoly if you want to consider WS being a true competitor) is that at least they're competent in what they do. For all the complaints we have about how lacklustre AC performance is, the high cost of domestic fares and the quality of AC soft and most important hard products AC runs a fine route network. If you don't believe me on this one, I would encourage you to look at Australia and see the appalling condition of their route network with QF as the more or less monopolist in their region. For many routes including SYD to PER, you'll be lucky if you get more than a handful of non-stops per day. Compare that with AC where it's nearly hour on hour you'll get trans con lift. This is coming from a someone who is by far not an AC fanboy (ask anyone on this forum if you think otherwise) and can be quite vocal at times (including wearing UA t-shirts on AC flights) when AC drops the ball.

Not only that, if TS were to pull a Wow, imagine the uproar there would be with domestic and international passengers being stranded? The impact the collapse of CP had on the Canadian aviation industry was huge and likely some of us on the forum recall quite vividly. Fortunately, AC was able to pick up CP at a good price but the damage was already done.

Correct and that was a good move IMHO. The job of Transport Canada is to ensure everyone has access to safe and accessible travel. Having a poorly operated airline that is in potential financial troubles goes against those principles and is more important than if the airfare to Santa Banana goes up by $2. I should also point out that Canadians have a choice if AC decides to jack up fares: connect (or travel) to the US. If anything this lack of competition may push rivals AA and DL and to some extent UA who can only offer connecting flights through the US (a pain for many) to lower their prices even further! Many of my cheapest domestic flights in Canada are routed through the US (i.e. DTW > YVR on UA instead of YYZ > YVR halving the cost of airfare and granting me access to the LH lounge )

As an aside, for all those saying the Canadian aviation market needs more competition, I ask you, how does Canada have a big enough travel market to support additional carriers? Even in the US, a country 10x the size of Canada only has just 3 legacies (UA, DL and AA) and 3 other airlines (AS,WN and B6) supporting their travel market. Oh and the US is about twice the size of Canada in terms of distance (it's 9,300 miles between SJU and GUM) and has some 15,000+ airports.

Safe Travels,

James

expert7700

joy. even more oddball planes in AC's mismatched fleet.

Suspect this will significantly dilute the chances of getting a lieflat seat on an AC route.

canadiancow

I disagree.

After the MAX issues go away, I'm willing to bet on each of the following three points:

1. No route will have scheduled mainline and rouge flights (it will be one or the other, and I am intentionally not saying "Express or rouge")
2. All mainline wide-bodies will have lie-flat J
2a. If they start flying before reconfiguring, it will be sold as PY like on the SQ aircraft
3. No rouge wide-bodies will have lie-flat seats

So I think it will very much operate as it does now.

YYCguy

Transpacificflyer

As some others have pointed out, this is just an "exclusivity" deal for face to face negotiations, and is not a done deal. The due diligence exercise for others continues.

I am a "naysayer", but the proposed deal reflects a few things that recently intensified;
1. Politics: Never estimate the meddling of a government sagging in the polls and desperate to hang on to seats in Quebec. The sale of Air Transat to a non Quebec presence would cause political damage. Even the premier of Quebec, despite playing coy in public, can't afford to lose a Quebec brand.

2. Despite the embellishments in the media about the sale price, 20% isn't much of a premium. In comparison, Onex is buying West Jet at a 67% premium. A closer look IMO suggests that this is a low ball offer, and reflects the actual value, of a sick operation. I find it odd that CBC tosses out a value of $520 million, while other financial media report the offer as $488 million. Not mentioned is the impact of income tax credits and other credits that attach to a money losing operation.

If Air Canada purchases Air Transat, it will not be as the company we know today as Air Transat. Air Canada has already said it doesn't want the hotels and other real estate and this is in the announcement. If Air Transat sells to Air Canada it is because it can't do better. It will be more like Air Transat light.

I expect that the competition bureau will come down hard on some of the routes. Air Transat kept airfares down. This is best illustrated by the YUL-CDG route. This is one of the more affordable PE routes and it is all because of Air Transat. I would expect that some slots would need to be given up, perhaps to West Jet who would like a presence on the routes. However, at the end of the day, I expect that if AC is allowed to proceed, the average joes who save all year for their junkets down south will be paying significantly more next year. This will hurt the little people most, the folks who do not fly in J,

I still see this as a bad deal for Air Canada, because the assumption of low end business detracts from the mainline brand. I just can't see Air Canada abandoning its debt reduction strategy, which means that assets would have to be sold off to make this deal viable.

FlyerTalker70

One question that's missing from this discussion is what impact, if any would it have on the airports AC flies to. For instance, for TS it is LGW not LHR that is its London hub airport. I suspect many of this forum would appreciate flying into LGW than the overly congested LHR with its long transit times to London City Centre. They also operate at airports AC doesn't presently operate at such as BSL EuroPort. I for one welcome the day that I can enjoy the world class lounges at BSL (don't laugh it's a thing!)

I, for one, welcome our A310 overlords !

tecate55

It's not really 20%. It's more than 100% higher than what it was 30d ago. AC is likely the 2nd bidder.

ChrisA330

jerryhung

to be fair, TRZ was trading $4-$6 for most of last year (I know because I held, averaged down, and sold out at $6 breakeven, sadly just before the buyout rumor comes to pop it to $8, then $9, then $10, and now $12's)
so $13 is a +100% premium probably to the last 365-days VWAP :P

emma69

I don't mind Transat, and have flown them a number of times short and long haul, but flying into Gatwick instead of Heathrow is a big negative in my book. For a start, Heathrow is closer to central London (at least north of the river where I travel to) LHR into central London you have the HEX, and the tube as straightforward options working on independent tracks, so the outage of one still leaves the other. Gatwick you have a rail line that is more expensive, and often completely closed on weekend for 'track work'. I am going into Gatwick next month (Westjet this occasion) and would far rather be landing in Heathrow (the AC options didn't work out for this trip).

emma69

That's ignoring quite a lot of airlines that operate in the US - Spirit, Frontier, Allegiant, Hawaiian, etc. plus some regional carriers

Fiordland

I think they would keep LGW and LHR as destinations. Rouge was doing LGW for a time. Not that odd to have an airline group send one banner to one airport and the other to the other.

Another interesting question to ask is what happens in Toronto. I don't think the airport can handle Transat, Air Canada and the rest of *A operating out of Terminal 1.

After the AC and Canadian merger, Canadian and AC moved into the old T1 and T2 with T1 handling international and T2 domestic and US.

FlyerTalker70

Out of curiosity how much capacity does TS suck up? Perhaps this is something they could cram into the already overloaded T1? I, for one, would be concerned about AC sharding their flights to T1 and T3. For instance, AC could move Rogue/TS flights into T3 and keep mainline at T1. The concern here would be that the facilities at T3 aren't nearly as good as T1. Would AC bother building a MLL there for their Elites and those travelling in Premium Rogue? What about Priority check-in? This says nothing about how transfers would work going from mainline/regional over to Rogue. Perhaps AC would have shuttle buses to ferry passengers between T3 and T1 much like what UA does at EWR. Even then, things get tricky given how messed up the departure lounge situation is at YYZ (i.e. International and Domestic flights being segregated).

Safe Travels,

James