AC and TRZ Agree to Terminate Arrangement

[FL-280]

An arbitrator will look at career progression and make sure the is no windfall gains for one group.
With a much smaller fleet and only 150 pilots required to operate the current Transat fleet why would any laid off Ts pilot get recalled before an AC pilot?

DOH - Wont Happen / BOTL - Wont happen even though it would be a win for TS pilots compared to their company folding.

Will probably go one of two ways.

2 OC, vacation and mainline where Ts pilots can only fly in the vacation OC and AC pilots take loa’s and bid with their seniority to positions

1 list - 5-8 years penalty from doh for TS pilots (Canadian was approx 6 years penalty depending on the individual’s seniority)

[altiplano]

What airplanes does Transat operate currently? Were any from pre-pandemic days returned/retired early? How many pilots currently working in the operation?

[Localizer]

I’m going to assume you guys are laid off and taking advantage of legal weed ... that’s the only way you could come up with this hopeful garbage. At $5/share the deal is done and the regulators will now approve the deal, there is no question at this point. As for seniority, blended list .. might be some fences but it won’t be too far off the DOH mark .. so just accept it. Welcome the new AT brothers and get some damn unity going in this industry for once.

On to the next battle ..

[rudder]

An arbitrator will look at career progression and make sure the is no windfall gains for one group.
With a much smaller fleet and only 150 pilots required to operate the current Transat fleet why would any laid off Ts pilot get recalled before an AC pilot?

DOH - Wont Happen / BOTL - Wont happen even though it would be a win for TS pilots compared to their company folding.

Will probably go one of two ways.

2 OC, vacation and mainline where Ts pilots can only fly in the vacation OC and AC pilots take loa’s and bid with their seniority to positions

1 list - 5-8 years penalty from doh for TS pilots (Canadian was approx 6 years penalty depending on the individual’s seniority)

AC has the right to 2 OC per the ACPA CBA (mainline/LCC Rouge). All flying must be operated by pilots from a single pilot list (AC).

The rights to move back and forth between mainline and LCC flying positions is also determined by the ACPA CBA.

If necessary, an arbitrator will determine relative seniority and fences (if applicable). The terms of reference for the seniority arbitration will not include rewriting sections of the ACPA CBA that pertain to scope but may include provisions that affect the application of seniority in either filling vacancies or determining reductions.

In mergers from 20+ years ago, furloughed pilots were often ‘stapled’ to the end of the merged list. I see that as highly unlikely in this instance due to volume of furloughs from both groups.

The wild card remaining is what CR has planned, and how ACPA will respond. He may ask for 3 OC to keep the TS operation separate from both mainline and Rouge. I cannot see how that would be amenable to ACPA.

This will also be the first COVID era seniority integration. There is no precedent. Typically a ‘snapshot’ is taken at DCC (date of corporate closing) to determine what each party is bringing to the merger (pilot positions). In this instance, that would be January 2021. That picture will not be pretty.

[iflyroads]

I’m going to assume you guys are laid off and taking advantage of legal weed ... that’s the only way you could come up with this hopeful garbage. At $5/share the deal is done and the regulators will now approve the deal, there is no question at this point. As for seniority, blended list .. might be some fences but it won’t be too far off the DOH mark .. so just accept it. Welcome the new AT brothers and get some damn unity going in this industry for once.

On to the next battle ..

You can expect some heavy lobbying to occur from European airlines to the EU regulators.

Whatever stipulations the regulators put on this deal will now be easily met by AC at such a low price tag, unless the ask is just too big even to buy an airline for pennies on the dollar.

[Daniel Cooper]

Will Onex (or anyone else) be able to submit a higher offer at this point?

[TFTMB heavy]

Will Onex (or anyone else) be able to submit a higher offer at this point?

Yes

[rudder]

Will Onex (or anyone else) be able to submit a higher offer at this point?

Yes. Minimum competing bid per the Purchase Agreement is $6/share or higher.

ONEX took a bloodbath on the WJ acquisition. However, if they could add the TS overseas operation for $300MM, it may be worth doubling down on its bet on Canadian aviation.

AC is thus far promising continued TRZ YUL HQ and job guarantees (as best can be offered under COVID duress). In reality, COVID gives AC the opportunity to dramatically reduce the TRZ workforce although I am guessing that JME is telling all of his Executives that they get to keep their jobs. We will see.

The option to take AC stock in lieu of cash makes the deal cheaper for AC, and potentially more lucrative for TRZ shareholders if/when the AC stock price recovers.

Alternatively, the TRZ shareholders could accept a $6+ offer from ONEX and simply buy AC shares.

This isn’t over yet. TRZ shareholder approval. Potential competing offer. Regulatory approval and possible conditions (route/frequency shedding on international routes). Labour issues.

Should be an interesting next few months.

[ALPApolicy]

Will Onex (or anyone else) be able to submit a higher offer at this point?

Yes. Minimum competing bid per the Purchase Agreement is $6/share or higher.

ONEX took a bloodbath on the WJ acquisition. However, if they could add the TS overseas operation for $300MM, it may be worth doubling down on its bet on Canadian aviation.

That would be an interesting SLI negotiation, given the unorthodox WJ seniority list. As both parties would be represented by ALPA, they would run squarely into the ALPA Merger Policy and that’s where the fun would begin. I’m sure the experienced TRZ pilots would immediately reject the WJ pilots’ definition of seniority (pre-dating the WJ DOH for certain privileged segments of the list). To make no mention of the PTA provisions.

EDIT: But I don’t have to tell you that, rudder, as I believe you were intimately involved with the last revision to ALPA Merger Policy. That being the case, do you see any problems with a TRZ/WJ SLI negotiation as regards the provisions of ALPA Merger Policy?

[rudder]

There are no hidden traps in the latest ALPA Merger Policy. Nobody is advantaged. Nobody is disadvantaged.

The current policy has been used for some of the largest pilot seniority integrations in history. No lawsuits. No reversals.The possibility of a single rogue arbitrator getting it wrong have been removed.

Facts and strength of argument are the tools for the parties to use to advance their preferred list solution. It is not final offer selection so ultimately the Arbitration Panel writes the Award. Always serves the parties best interest to resolve as many issues as possible and advance to the panel just the remaining issues in dispute. Easier said than done. Extreme proposals seldom get much traction. Just look at the awards.

If a merger were declared, it would identify the affected pilot groups. If Encore was not included in the declaration, then the submitted list would be the WJ pilot seniority list, whatever form that may take. If the counter party wanted to take issue with the names on the list, then that matter would likely fall to the Arbitration Panel to adjudicate.

For historical perspective, there were ex-CRA pilots that brought CRA hire dates on the CDN list to the AC/CDN merger. The arbitrator dealt with that issue in the award.

[RRJetPilot]

Well I HIGHLY doubt ONEX would be looking to touch anything airline related with a 100 foot pole. The made a huge mistake with the WJ purchase and will not make a bigger mistake again. I think ONEX and the board are looking deeply on how to unload WJ with losing the least amount of money. After this pandemic there will be no investment in Aviation for a period of 5-10 years.

[TFTMB heavy]

There are no hidden traps in the latest ALPA Merger Policy. Nobody is advantaged. Nobody is disadvantaged.

The current policy has been used for some of the largest pilot seniority integrations in history. No lawsuits. No reversals.The possibility of a single rogue arbitrator getting it wrong have been removed.

Facts and strength of argument are the tools for the parties to use to advance their preferred list solution. It is not final offer selection so ultimately the Arbitration Panel writes the Award. Always serves the parties best interest to resolve as many issues as possible and advance to the panel just the remaining issues in dispute. Easier said than done. Extreme proposals seldom get much traction. Just look at the awards.

If a merger were declared, it would identify the affected pilot groups. If Encore was not included in the declaration, then the submitted list would be the WJ pilot seniority list, whatever form that may take. If the counter party wanted to take issue with the names on the list, then that matter would likely fall to the Arbitration Panel to adjudicate.

For historical perspective, there were ex-CRA pilots that brought CRA hire dates on the CDN list to the AC/CDN merger. The arbitrator dealt with that issue in the award.

Well said. Encore certainly makes that prospect more challenging.

The ALPA merger policy principles would be good to adopt for an ACPA merger also.

[Dry Guy]

Well I HIGHLY doubt ONEX would be looking to touch anything airline related with a 100 foot pole. The made a huge mistake with the WJ purchase and will not make a bigger mistake again. I think ONEX and the board are looking deeply on how to unload WJ with losing the least amount of money. After this pandemic there will be no investment in Aviation for a period of 5-10 years.

I'm not so sure. Buy when there's blood in the streets is how the big fish think. It's not just Onex that's going to be looking at this either.

[RRJetPilot]

I think the biggest fish is Warren Buffet. Who Im sure you read sold all his airline holdings recently and said it was one of his biggest mistakes to invest in aviation. I think ONEX is smart enough to cut its losses. It has in the past.

[planebored]

An arbitrator will look at career progression and make sure the is no windfall gains for one group.
With a much smaller fleet and only 150 pilots required to operate the current Transat fleet why would any laid off Ts pilot get recalled before an AC pilot?

DOH - Wont Happen / BOTL - Wont happen even though it would be a win for TS pilots compared to their company folding.

Will probably go one of two ways.

2 OC, vacation and mainline where Ts pilots can only fly in the vacation OC and AC pilots take loa’s and bid with their seniority to positions

1 list - 5-8 years penalty from doh for TS pilots (Canadian was approx 6 years penalty depending on the individual’s seniority)

I hope this never happens.

One list. One contract. Period.

[planebored]

I’m going to assume you guys are laid off and taking advantage of legal weed ... that’s the only way you could come up with this hopeful garbage. At $5/share the deal is done and the regulators will now approve the deal, there is no question at this point. As for seniority, blended list .. might be some fences but it won’t be too far off the DOH mark .. so just accept it. Welcome the new AT brothers and get some damn unity going in this industry for once.

On to the next battle ..

Explain how it "won't be too far from DOH mark" when AC doesn't have much of a DOH list?

[milhouse]

Explain how it "won't be too far from DOH mark" when AC doesn't have much of a DOH list?

The canadian merger was 20 years ago, I think it's a bit of a stretch to say AC "doesn't have much of a DOH list".

[planebored]

Explain how it "won't be too far from DOH mark" when AC doesn't have much of a DOH list?

The canadian merger was 20 years ago, I think it's a bit of a stretch to say AC "doesn't have much of a DOH list".

So I guess just ignore them then?

[milhouse]

Explain how it "won't be too far from DOH mark" when AC doesn't have much of a DOH list?

The canadian merger was 20 years ago, I think it's a bit of a stretch to say AC "doesn't have much of a DOH list".

So I guess just ignore them then?

Not what I said. But trying to pretend DOH isn't the primary means of determining seniority at AC is just dumb.

[planebored]

The canadian merger was 20 years ago, I think it's a bit of a stretch to say AC "doesn't have much of a DOH list".

So I guess just ignore them then?

Not what I said. But trying to pretend DOH isn't the primary means of determining seniority at AC is just dumb.

It is now but when you're merging a list into an area that isn't DOH that ends up causing problems. I anticipate like someone mentioned earlier it will be ratioed similar to the 5-6 year hit CAIL pilots had.

At the end of the day is no dispute that AT pilots will end up having a better career earnings wise at AC, even if they all take a 6 year haircut on their seniority.

Bigger list, more planes, higher payscale. It is what it is.

On the flip side AT has some good lifestyle items in their contract and I hope we are able to build a joint CA that takes the best of both contracts.

As an AC pilot I'm not against a merger. It will bring more WB aircraft and that will help everyone more higher paid positions.