Could AC Buy Transat? 16May19 Update: AC enters into agreement to buy Transat
May 7, 2019, 4:27 pm
#47
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?We will continue with our business plan?: Air Canada responds to potential Transat sale - Travelweek
TORONTO — While Transat A.T. has begun a process that could lead to its sale, Air Canada President and CEO Calin Rovinescu did not want to say Monday whether he could be interested in the Quebec tour operator.
Asked by an analyst about acquisition opportunities in Canada and abroad in a conference call to discuss first quarter results, Rovinescu avoided answering the question directly. “We will continue with our business plan,” he said, adding, “that’s what brought us this far.”
Since Air Transat’s parent company announced last week that it was talking to more than one potential buyer, the names of Air Canada and WestJet were mentioned by observers alongside foreign players like TUI as well as private investment funds.
TORONTO — While Transat A.T. has begun a process that could lead to its sale, Air Canada President and CEO Calin Rovinescu did not want to say Monday whether he could be interested in the Quebec tour operator.
Asked by an analyst about acquisition opportunities in Canada and abroad in a conference call to discuss first quarter results, Rovinescu avoided answering the question directly. “We will continue with our business plan,” he said, adding, “that’s what brought us this far.”
Since Air Transat’s parent company announced last week that it was talking to more than one potential buyer, the names of Air Canada and WestJet were mentioned by observers alongside foreign players like TUI as well as private investment funds.
May 7, 2019, 5:00 pm
#48
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?We will continue with our business plan?: Air Canada responds to potential Transat sale - Travelweek
TORONTO — While Transat A.T. has begun a process that could lead to its sale, Air Canada President and CEO Calin Rovinescu did not want to say Monday whether he could be interested in the Quebec tour operator.
Asked by an analyst about acquisition opportunities in Canada and abroad in a conference call to discuss first quarter results, Rovinescu avoided answering the question directly. “We will continue with our business plan,” he said, adding, “that’s what brought us this far.”
Since Air Transat’s parent company announced last week that it was talking to more than one potential buyer, the names of Air Canada and WestJet were mentioned by observers alongside foreign players like TUI as well as private investment funds.
TORONTO — While Transat A.T. has begun a process that could lead to its sale, Air Canada President and CEO Calin Rovinescu did not want to say Monday whether he could be interested in the Quebec tour operator.
Asked by an analyst about acquisition opportunities in Canada and abroad in a conference call to discuss first quarter results, Rovinescu avoided answering the question directly. “We will continue with our business plan,” he said, adding, “that’s what brought us this far.”
Since Air Transat’s parent company announced last week that it was talking to more than one potential buyer, the names of Air Canada and WestJet were mentioned by observers alongside foreign players like TUI as well as private investment funds.
I don’t know anything about these companies but it does seem a bit weird.
May 7, 2019, 5:56 pm
#49
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It does say a foreign company like TUI not necessarily TUI itself which already owns 49% of Sunwing so is very unlikely to buy half of Transat.
May 7, 2019, 8:22 pm
#51
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We will continue with our business plan, that’s what brought us this far.”
In one succinct phrase, the oracle of Air Canada has sent a strong message to the market.
The Air Canada business plan emphasizes a lower risk profile with robust liquidity levels, a large unencumbered asset pool and a pension solvency surplus. More specifically, two key components of the Air Canada business plan are;
- Aggressive reduction of debt and,
- A more outright ownership of the fleet with the goal of moving from 23% to 40% by the end of 2021
The assumption of Air Transat and its dependence upon leases and debt would not support the business plan and would IMO increase the risk profile, erode liquidity, burden the pension plan, add debt, and obstruct the path to outright fleet ownership with unwanted aircraft leases.
The past decade is littered with the carcasses of dead leisure tour & airline businesses. Monarch Airlines (2017), XL Leisure Group (2008), Transaero (2015), Air Berlin (2017), Wow (2018), Primera (2018) CanJet (2015) and Germania (2019). All of these airlines served/targeted the leisure and charter vacation market segment. There was a time when these specialized airlines had a market to serve. However, now that the legacy airlines have adapted to market changes and introduced their own LCCs and charter style facilities to serve the leisure and price sensitive market segments, the once popular travel & airline groups are no longer as competitive as they once were. Air Canada and West Jet vacations can offer similar packages to Air Transat, but include access to the infrastructure and expertise of a large airline.
Why purchase when one can pick up market share at no cost once the airline pulls back from the market?
In one succinct phrase, the oracle of Air Canada has sent a strong message to the market.
The Air Canada business plan emphasizes a lower risk profile with robust liquidity levels, a large unencumbered asset pool and a pension solvency surplus. More specifically, two key components of the Air Canada business plan are;
- Aggressive reduction of debt and,
- A more outright ownership of the fleet with the goal of moving from 23% to 40% by the end of 2021
The assumption of Air Transat and its dependence upon leases and debt would not support the business plan and would IMO increase the risk profile, erode liquidity, burden the pension plan, add debt, and obstruct the path to outright fleet ownership with unwanted aircraft leases.
The past decade is littered with the carcasses of dead leisure tour & airline businesses. Monarch Airlines (2017), XL Leisure Group (2008), Transaero (2015), Air Berlin (2017), Wow (2018), Primera (2018) CanJet (2015) and Germania (2019). All of these airlines served/targeted the leisure and charter vacation market segment. There was a time when these specialized airlines had a market to serve. However, now that the legacy airlines have adapted to market changes and introduced their own LCCs and charter style facilities to serve the leisure and price sensitive market segments, the once popular travel & airline groups are no longer as competitive as they once were. Air Canada and West Jet vacations can offer similar packages to Air Transat, but include access to the infrastructure and expertise of a large airline.
Why purchase when one can pick up market share at no cost once the airline pulls back from the market?
May 7, 2019, 8:22 pm
#52
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Condor belongs to Thomas Cook not TUI, ans indeed they are trying to sell condor, so unlikely they would buy Transat
May 7, 2019, 9:10 pm
#53
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According to the globe, citing La Presse,
So AC might well be very much in the game. If only to stand against WS.
Transat was first approached about a potential deal by Calgary-based WestJet Airlines Ltd. Air Canada followed up with an unsolicited bid, the report said.
May 8, 2019, 6:36 am
#54
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Air Canada doesn't need to buy Transat to make that happen, just wait for their death. If AC could take a few of the prime planes as-is/where-is , building up options credits for 6 months, that would put them in a strong position for cherry picking prime assets. Or horrible assets to be hangar queens but at fire sale prices, why not?
May 8, 2019, 8:08 am
#55
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There are practical operation concerns, and racking up hours during the MAX grounding could indicate adding on more leases in the few-year term range.
Air Canada doesn't need to buy Transat to make that happen, just wait for their death. If AC could take a few of the prime planes as-is/where-is , building up options credits for 6 months, that would put them in a strong position for cherry picking prime assets. Or horrible assets to be hangar queens but at fire sale prices, why not?
Air Canada doesn't need to buy Transat to make that happen, just wait for their death. If AC could take a few of the prime planes as-is/where-is , building up options credits for 6 months, that would put them in a strong position for cherry picking prime assets. Or horrible assets to be hangar queens but at fire sale prices, why not?
Transat has an order for A330 with Airbus, however I assume AC could buy those planes cheaper than Transat did? The new 330s have not been selling well, so perhaps Transat got those planes "cheap"? AC does need some replacements soon for its 767s
May 16, 2019, 6:04 am
#56
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Air Canada enters into agreement to buy Transat.
"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.“
Source
https://aircanada.mediaroom.com/2019-05-16-Air-Canada-enters-into-Exclusive-Agreement-with-Transat-A-T-Inc-to-pursue-a-Combination-of-the-two-Companies
Source
https://aircanada.mediaroom.com/2019-05-16-Air-Canada-enters-into-Exclusive-Agreement-with-Transat-A-T-Inc-to-pursue-a-Combination-of-the-two-Companies
May 16, 2019, 6:14 am
#58
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Quite the change in the skies for Canada, more change in the last week than in a long time!
Last edited by Admiral Ackbar; May 16, 2019 at 6:24 am Reason: If you can't be nice