AC and TRZ Agree to Terminate Arrangement

[Fanblade]

Gilles,

I read the deleted posts. I don’t think it had anything to do with you. There was a bunch of East/West slagging going on around your post.

Looks like the MODS just cut the whole section and your post was in the middle.

As for your post. I don’t think that is a realistic possibility considering labor laws. I think the most likely thing we are going to see is everything going on hold. AC is already signalling they are planning to cut several hundred million from capital expenditures this year. Albeit no explanation as to what. Even if it is the Transat transaction that has been cut from 2020, it could also be just an 8 month delay.

I have no doubt the deal as is will not proceed. If it proceeds it will look like a different animal and will take more time than initially planned.

Cheers.

[goldeneagle]

I read the deleted posts. I don’t think it had anything to do with you. There was a bunch of East/West slagging going on around your post.

The posts where quebec folks are slagging bc folks stayed, the reverse got deleted. The mods definitely showing the bias once again....

[DanWEC]

Not trying to give a TS biased perspective here, but I just can't see how a deal would be renegotiated well after the fact.

To simplify it, the contract was drawn up, agreed upon, and signed. Due diligence and analysis was performed way back during the 6 months prior to the deal being publically announced last year.
That's it. Done. The language in the contract, to my knowledge, is quite robust in order to prevent either party from reneging for any reason during the unavoidable processing time. If it wasn't for the glacial pace of all the regulatory approvals it would have been done overnight.
It also allows for and expects financial variations that could occur over the course until closing time.
Even the material adverse clause specifically excludes a pandemic.

People keep throwing around the 40 mil break fee from AC, most are misinterpreting it.
It isn't a catch-all penalty option for simply backing out. There isn't anything like that in the contract. The break fee is expressly if the deal doesn't obtain regulatory approval AND AC doesn't perform the necessary adjustments in order to make it work.
If AC were to attempt to simply back out it would be in the courts as breach of contract and would likely cost far more.

Just my 2c from my limited but accurate knowledge.

Like Gilles said, it could very well be a terrible spot for TS pilots to be in, possibly the last to be recalled after all AC pilots, instead of coming back to work on our own at an independant Transat. But that's just speculation. The operational merger was supposed to take another year or so. We might ramp up normally during that period.

I just hope this all works out for everyone. Some of use are looking at possibly 6 months or more out of work. What a pile of junk we're all in.

[hithere]

AC and JAZZ(and probably numerous other airlines have used the “act of god” ie force majeure clause to modify some of their agreements with their unions(like lay-off notice timelines etc) so why would this AC/Transat deal not have a similar clause that would enable either party to bail out in the event of a force majeure,which Covid-19 clearly is?

[DanWEC]

From some public knowledge of the contract, a pandemic is expressly mentioned and excluded from affecting the terms.

[mbav8r]

Based on your knowledge does an economic collapse qualify?

[FL320]

Based on your knowledge does an economic collapse qualify?

No

[aerodude]

Competition bureau / Transport canada imposing restrictions on the merge is what will materially affect the value. (Ie Gatwick slots handed to another company)

Not the pandemic

[DanWEC]

If it's not something that's written in black and white, it can't be exercised. There is no interpretation, drift, or inference. A contract is a contract, and you would assume for a merger like this it will be watertight.

[FL320]

Competition bureau / Transport canada imposing restrictions on the merge is what will materially affect the value. (Ie Gatwick slots handed to another company)

Not the pandemic

True. And I think AC would have already made an official statement if they had no desire to pursue the deal. The layoffs and the competition bureau in the media last week would have been a perfect timing for the excuse.

[aerodude]

True. And I think AC would have already made an official statement if they had no desire to pursue the deal. The layoffs and the competition bureau in the media last week would have been a perfect timing for the excuse.

As much as i think the deal was supposed to go through, as we are getting close the to May decision from TC, the stock market does seem to think their will be some sort of restriction/modification on the merge.
Due to securities regulations, AC can't actually comment until the decision has been made by TC.

[Fanblade]

Competition bureau / Transport canada imposing restrictions on the merge is what will materially affect the value. (Ie Gatwick slots handed to another company)

Not the pandemic

I think AC would have already made an official statement if they had no desire to pursue the deal.

Actually the opposite would probably be true. The silence should concern you if you know how CR operates. Have you heard AC once try to quell concerns the deal might not have legs? The silence is the precursor to the gun to your head. Ask any AC employee. Ask Jazz. Ask former Aveos employees.

CR isn’t afraid of legal action. Remember Aveos? Sued by the Manitoba and Quebec governments plus a class action. He was quite ruthless with how he dealt with Aveos.

https://globalnews.ca/news/4210963/queb ... employees/

The AC BOD has a duty to the AC shareholders. CR way over paid for something. Yes it happened in hindsight. But it hasn’t closed. He will try.

My expectation is that the Transat BOD will negotiate. Refusing to do so could put everything at risk. Assuming the Quebec government isn’t waiting in the wings?

The upside for Transat employees is that no arbitrator will care about the theatre involved in the merge. Trust me you could go bankrupt and it won’t impact your seniority.

It is in the best interest of a Transat employees and shareholders that they play ball.

CR knows all this.

[Fanblade]

Pasted from another thread.

Looks like transat beats rouge on every scale and year.

This basically makes ts pilots equals or better to rouge pilots from a salary point of view, especially when considering how little they actually work? Removes any sort of negotiation that ts pilots will have a better career at AC and hence have to shove it on the seniority side of things?

Or am I wrong?

Hopefully a healthy debate can be made without any maple leafs falling off anyone’s hat

This is why Calin is pissed. I and many would guess the original plan was to roll Rouge back into mainline and have TS as the vacation airline. But now all of a sudden it's more expensive because of one employee group compared to Rouge and he's unable to under bid fares to WS/Onex and SW, despite millions sperged on Airmiles and the TS purchased.

Based on your comments you seem to think Transat pilots just tanked CR’s business plan. If the plan no longer works...........think about it for a moment.

Careful pissing off CR. I can guarantee it will not go without consequence. It’s his hallmark.

AC employees have felt it. Jazz was hit with it. Aveos felt it.

He disappears into the background slowly stacking the deck in his favour. Then reappears to point a gun to your head.

It’s how he works. He’s actually quite predicable.

The message is work with me and I will be reasonable. Piss on my hand and I will take your arm out of its socket.

So if your going to piss him off make sure you have an upper hand that can not be overcome. It needs to be very calculated. Otherwise.........

[Sharklasers]

I think it’s hyperbolic to make our CEO out as a Bond villain but clearly rovinescu isn’t afraid of a court room. Aveos and Jazz spring to mind as circumstances where AC was clearly in breech of a contract. The Amia/aeroplan deal could almost certainly be considered pretty borderline as well.
They knew they could walk all over Aveos because it would be bankrupt by the time the case worked its way through the system.

[rudder]

This idea that “a contract is a contract” is priceless.

How many “contracts” right now are being modified as a result of the COVID crisis?

No one is exempt. Certainly not the TRZ shareholders.

[hithere]

I find it insane that a force majeure clause of some type was not written into the contract. Is it not standard contract law?

[AirMail]

Pasted from another thread.

Looks like transat beats rouge on every scale and year.

This basically makes ts pilots equals or better to rouge pilots from a salary point of view, especially when considering how little they actually work? Removes any sort of negotiation that ts pilots will have a better career at AC and hence have to shove it on the seniority side of things?

Or am I wrong?

Hopefully a healthy debate can be made without any maple leafs falling off anyone’s hat

This is why Calin is pissed. I and many would guess the original plan was to roll Rouge back into mainline and have TS as the vacation airline. But now all of a sudden it's more expensive because of one employee group compared to Rouge and he's unable to under bid fares to WS/Onex and SW, despite millions sperged on Airmiles and the TS purchased.

Based on your comments you seem to think Transat pilots just tanked CR’s business plan. If the plan no longer works...........think about it for a moment.

Careful pissing off CR. I can guarantee it will not go without consequence. It’s his hallmark.

AC employees have felt it. Jazz was hit with it. Aveos felt it.

He disappears into the background slowly stacking the deck in his favour. Then reappears to point a gun to your head.

It’s how he works. He’s actually quite predicable.

The message is work with me and I will be reasonable. Piss on my hand and I will take your arm out of its socket.

So if your going to piss him off make sure you have an upper hand that can not be overcome. It needs to be very calculated. Otherwise.........

Maybe if ya'll weren't so afraid of him you could get better work conditions? I imagine negotiations are pretty one sided

[Fanblade]

Lol,

True to a point. The point I was making was simply that if you are not clearly in the drivers seat.......

The last time ACPA took him on he locked us out. Then Harper blamed the pilots and put us into a final offer selection arbitration.

Look it up. Meant for people like sports professionals.

Then the FOS arbitrator drove a truck through our CBA. That arbitration brought in Rouge, an end to the DB pension and large scope concessions.

Lesson learned. Make certain you are in the drivers seat. Check twice to make sure. If you play the game like your in the drivers seat when your not? You will pay a price. Expect to lose not just your car, but your wife’s as well.

If your not in the drivers seat. Do a deal. Jazz did a deal Aveos did not.

If you are in the drivers seat and are certain of it? Go for it.

Oh yeah....get my wife’s car back while your at it!

[Inverted2]

Ha good analogy Fanblade. Pretty much sums him up. People used to call him the “Smiling Knife”.

[Localizer]

Lets point out the obvious here .. Jazz and Aveo's are contractors .. you play ball or you lose the contract.

Air Canada is buying Transat A.T .. once its in AC's hands it will be molded the way they see fit.

This isn't the first time AC has tried to acquire Transat, I think AC is ecstatic that Transat finally agreed, so they won't waste the opportunity. For some reason, people on this forum think Transat has been hanging by a limb, quite the contrary, its weathered a lot of storms and they're still in the game 30 years later, and please don't give me that "Quebec government" garbage .. AC has had its fair share of government .. "assistance" ...