AC and TRZ Agree to Terminate Arrangement

[gustind]

I want a serious straight faced answer as to why some Transat pilots expect the Air Canada pilots to happily share the pain of lost Transat pilot jobs.

As a Transat pilot, I was devastated to hear about Sunwing ceasing operations. As a Transat pilot, I felt the pain of old co-workers being laid off from their E175 gigs. As a Transat pilot, it hurt me to hear of many old and new commercial pilots in the industry being completely lost with feelings of hopelessness in this industry.


I may not expect anyone to happily share in my pain. But I won't let my employer define my ability to have empathy towards others in this industry. I'm not asking for pity, I'm asking for understanding. Yes, I do understand we as pilots will be negatively affected by this acquisition, on both sides. I have a family, kids, and a house to pay off. I'm just like any other pilot in the industry who just wants to show up to work, fly around and go home at the end of the day.


On a side note, I had a quick look at the convoluted contract AC pilots have. I'd happily stay at my pay rate, keep my ALPA contract, and keep my working conditions for the rest of my life.

[LittleNelly]

The Transat side really needs to pick a stream here. One moment they are arguing that their jobs need to be saved. Yet immediately after argue that there is no way Transat is going anywhere, they won’t be allowed to fail( is the likely outcome)

Keeping them separate= more jobs between two companies. So in fact the argument against the merger is an argument for protecting more jobs including Transat jobs. How is that not better for Transat people too?

If a combined Air Canada Transat results in 3,000-4000 less jobs than the two separate companies how is that better for the employees?

[Sharklasers]

Tiny fraction of AC guys: Still don't care! Lose your houses before I drop 3 seniority numbers!

At the beginning of all this, as an AC guy I wouldn't be over the moon about possibly losing a couple of months worth of seniority. But I probably wouldn't care too much. More important things to fill our days with.

When you trivialize someones concerns you only serve to steel their positions on the issue. Very very few people will only stand to lose 3 seniority numbers or a couple months of seniority and you know it. Alot of our membership stands to lose 400-650 numbers, which if we get back to the glory days of 100 upgrade a year will delay their progression 4-6 years and cost them half a million dollars a piece. So please, you tell me which of our membership you deem worthy of being allowed to be concerned over their jobs and progression.
As for your many many AC friends I assure you they all hold those same concerns and they are valid and your hyperbole will not make you many friends on the issue.

[800man]

Sharklasers, I have no idea where you're getting those speculative numbers from, if you can support them I'd be interested, but IMO your perspective is flawed resulting in those estimates.

First off, TS only has 600 pilots. We've lost a bunch in early retirement, but that's beside the point.

Secondly, and most importantly, you're forgetting that the TS brand comes with not just the pilots, but ALSO the aircraft and the capacity. We also had a shortage of around 100 (15%) before the pandemic. So, the TS pilots would not be condensing into your current capacity, but rather just staying where they are and servicing the existing brand capacity.

Thirdly, it will be years, likely 2+ before the fences start coming down. Best estimates have 2024 echoing 2018-19 capacity. It will be the start of expansion again. in the meantime, both groups will have had the same percentage of movement via natural attrition and retirements, and then will start ramping up as the mergers happen. There will have been no influence on the AC side up to this point.
We will just be doing things parallel to you. It's the shutdowns that have caused the handbrake on upgrades and new hiring due to pausing expansion, not the merger. TS independently probably just went to 10 year upgrades at best.

[LittleNelly]

Secondly, and most importantly, you're forgetting that the TS brand comes with not just the pilots, but ALSO the aircraft and the capacity. We also had a shortage of around 100 (15%) before the pandemic. So, the TS pilots wouldn't be condensing into your current capacity, but rather just staying where they are and servicing the existing brand capacity.

.

I guess you missed the part where AC is making concessions on giving away all Transats slots in Europe. So no Transat is not bringing all this flying over. The deal as is seems structured primarily for the tour/package operation.

If the case is Transat permanently going forward as a trimmed down operation, as indicated by the 1500 agreement, requiring only say 200 pilots who will get integrated by ratio with the rest being stapled. Would you still support this merger?

[altiplano]

Sharklasers, I have no idea where you're getting those speculative numbers from, if you can support them I'd be interested, but IMO your perspective is flawed resulting in those estimates.

First off, TS only has 600 pilots. We've lost a bunch in early retirement, but that's beside the point.

Secondly, and most importantly, you're forgetting that the TS brand comes with not just the pilots, but ALSO the aircraft and the capacity. We also had a shortage of around 100 (15%) before the pandemic. So, the TS pilots wouldn't be condensing into your current capacity, but rather just staying where they are and servicing the existing brand capacity.

Thirdly, it will be years, likely 2-3 before the fences start coming down. Best estimates have 2023-24 echoing 2018-19 capacity. It will be the start of expansion again. in the meantime, both groups will have had the same percentage of movement via natural attrition and retirements, and then will start ramping up as the mergers happen. There will have been no influence on the AC side up to this point.
We will just be doing things parallel to you. It's the shutdowns that have caused the handbrake on upgrades and new hiring due to pausing expansion, not the merger.

1. Only 600. That's still a lot of seats. That's 6 years of upgrades in good times. That's almost all the YUL base...

2. Do you know where all the TS aircraft are? Remember they are all leases also, which equals cash bleed if they aren't making money. 310s and 737s were done anyway, but probably the older 330s as well. Besides, in the aircraft market today AC could get any plane they wanted.

3. A lot of TS flying is gone in this deal. Slots are gone. There is a consolidation of capacity, not any increase after closing. That's straight out of Rovinescu's mouth pre-pandemic. I was in the room and watched him say it. Lyon was the example he gave, instead of 10 flights/week it goes to daily service in the new combined operation. They envision that on every overlapped route. They will drastically cut capacity. So who should fly it? TS guys or AC guys? Even Steven? Ratio? Seats lost.

4. No influence for years on the AC side while TS goes merrily along? Do you think that AC corporate will want to do that? Maintain over capacity? Especially in the state things are in now? No! They will slash and burn for profit.

I always hear about the pilots here... what about all the other jobs? Will big ole AC with 25,000 people layed off just hire everyone from Transat? Will they displace AC agents or AMEs or FAs? And who should get brought back first? Do you care?

[tsgas]

Sharklasers, I have no idea where you're getting those speculative numbers from, if you can support them I'd be interested, but IMO your perspective is flawed resulting in those estimates.

First off, TS only has 600 pilots. We've lost a bunch in early retirement, but that's beside the point.

Secondly, and most importantly, you're forgetting that the TS brand comes with not just the pilots, but ALSO the aircraft and the capacity. We also had a shortage of around 100 (15%) before the pandemic. So, the TS pilots wouldn't be condensing into your current capacity, but rather just staying where they are and servicing the existing brand capacity.

Thirdly, it will be years, likely 2-3 before the fences start coming down. Best estimates have 2023-24 echoing 2018-19 capacity. It will be the start of expansion again. in the meantime, both groups will have had the same percentage of movement via natural attrition and retirements, and then will start ramping up as the mergers happen. There will have been no influence on the AC side up to this point.
We will just be doing things parallel to you. It's the shutdowns that have caused the handbrake on upgrades and new hiring due to pausing expansion, not the merger.

1. Only 600. That's still a lot of seats. That's 6 years of upgrades in good times. That's almost all the YUL base...

2. Do you know where all the TS aircraft are? Remember they are all leases also, which equals cash bleed if they aren't making money. 310s and 737s were done anyway, but probably the older 330s as well. Besides, in the aircraft market today AC could get any plane they wanted.

3. A lot of TS flying is gone in this deal. Slots are gone. There is a consolidation of capacity, not any increase after closing. That's straight out of Rovinescu's mouth pre-pandemic. I was in the room and watched him say it. Lyon was the example he gave, instead of 10 flights/week it goes to daily service in the new combined operation. They envision that on every overlapped route. They will drastically cut capacity. So who should fly it? TS guys or AC guys? Even Steven? Ratio? Seats lost.

4. No influence for years on the AC side while TS goes merrily along? Do you think that AC corporate will want to do that? Maintain over capacity? Especially in the state things are in now? No! They will slash and burn for profit.

I always hear about the pilots here... what about all the other jobs? Will big ole AC with 25,000 people layed off just hire everyone from Transat? Will they displace AC agents or AMEs or FAs? And who should get brought back first? Do you care?

You make a lot of good points with the exception of " they will slash and burn for profit". It's all about SURVIVAL at this stage in history. Many airlines worldwide will fail and their employees will be turfed. Preventing another Bankruptcy will be a major accomplishment for the management team and the company's lenders. .

[TheStig]

At this point, despite Air Canada's losses the reduced purchase price alone should be appealing to AC to simply remove a big competitor from post-COVID landscape. Even if Westjet or another entrant eventually picks up some of the city pairings that AC is forced to relinquish, AC will be able to recover without competition from Transat.

[tsgas]

At this point, despite Air Canada's losses the reduced purchase price alone should be appealing to AC to simply remove a big competitor from post-COVID landscape. Even if Westjet or another entrant eventually picks up some of the city pairings that AC is forced to relinquish, AC will be able to recover without competition from Transat.

The reason that the purchase price was reduced is because TRZ has gone from being cash positive to being a huge financial liability. The billions of dollars in AC debt will have to be repaid , along with the interest. If Transit remains independent , it too will have to downsize as well, to pay off it's debt.

[800man]

Talking pre-pandemic here, I have no way of believing that a strategic long-term reduction of capacity is in any company's business plan when the products are profitable.

Let's look a couple of years down the road, as it would be comparable to pre-pandemic.
TS had high loads for Transatlantic flying. I'm assuming AC and Rouge were similar, or at least close.

You're telling me that with available patronage and capacity in the mid-term to long-term projections they're going to simply.... reduce it? Short term obviously, and some consolidation on overlap in order to deliver an effective timetable, maybe. That's what their accountants will figure out, but cutting overall total, profitable capacity by 30% when the demand would outweigh in the mid and long is borderline hilarious.

Also, those aren't 154 paired slots (308 total) that are going to disappear. Again, that's crazy. They're only the market for 5 years. Who is going to pick them up? Maybe a few chunks here and there, but after 60 months, the majority will be right back to AC permanently.

Listen, the slots are of value here because the newest strategic modelling promotes use of LR narrow bodies on Trans-AT routes. 737 MAX, and 321-NeoLR. This means more slots for the same capacity as the superceded wide-body model.

Also means more planes.

And pilots.

There's a reason this has been on the books for a few years by AC. There also has to be a very compelling reason why the TS BOD insists on the AC trajctory over all others. And a reason AC didn't walk after a few opportunities.

Us bitching about our crumbs won't change anything, I'm not trying to argue with anyone, I'm just stating facts, I'd rather just enjoy life.

[LittleNelly]

Talking pre-pandemic here, I have no way of believing that a strategic long-term reduction of capacity is in any company's business plan when the products are profitable.

Let's look a couple of years down the road, as it would be comparable to pre-pandemic.
TS had high loads for Transatlantic flying. I'm assuming AC and Rouge were similar, or at least close.

You're telling me that with available patronage and capacity in the mid-term to long-term projections they're going to simply.... reduce it? Short term obviously, and some consolidation on overlap in order to deliver an effective timetable, maybe. That's what their accountants will figure out, but cutting overall total, profitable capacity by 30% when the demand would outweigh in the mid and long is borderline hilarious.

Also, those aren't 154 paired slots (308 total) that are going to disappear. Again, that's crazy. They're only the market for 5 years. Who is going to pick them up? Maybe a few chunks here and there, but after 60 months, the majority will be right back to AC.

Listen, the slots are of value here because the newest strategic modelling promotes use of LR narrow bodies on Trans-AT routes. 737 MAX, and 321-NeoLR. This means more slots for the same capacity.

Also means more planes.

And pilots.

There's a reason this has been on the books for a few years by AC. There also has to be a very compelling reason why the TS BOD insists on the AC trajctory over all others. And a reason AC didn't walk after a few opportunities.

Us bitching about our crumbs won't change anything, I'm not trying to argue with anyone, I'm just stating facts, I'd rather just enjoy life.

1) Transat struggled for years with losses during the most profitable decade for the airline industry.

2) it makes absolute sense to cut capacity to rise prices and yield on a previously over competitive market. Less people but more profitable

3) despite any hopes and dreams about how many jobs possible future expansion might bring the simple fact is no matter what keeping both companies separate in competition with the excess capacity will mean more jobs.
What is better more jobs on less jobs?

[800man]

It's not a captive market though. Foreign carriers make up almost 40% of the trans-At market. Add American carriers, whereas about 70% of Canada's population lives within 4 hrs driving distance of a major US airport, and there is plenty of choice. They aren't in a position to dictate the prices with that much competition. It's actually a fricken miracle our prices are marginally competitive to the US... but then again, look what we get paid.

The topic of operational redundancy in many support departments has been discussed here ad nasuem and is still an unknown with the "Brand Maintenance" agenda, but common sense predicts cuts. Probably still better than being run into the ground by some third party. Most of this conversation is pilot-centric regardless.

[tsgas]

It's not a captive market though. Foreign carriers make up almost 40% of the trans-At market. Add American carriers, whereas about 70% of Canada's population lives within 4 hrs driving distance of a major US airport, and there is plenty of choice. They aren't in a position to dictate the prices with that much competition. It's actually a fricken miracle our prices are marginally competitive to the US... but then again, look what we get paid.

The topic of operational redundancy in many support departments has been discussed here ad nasuem and is still an unknown with the "Brand Maintenance" agenda, but likely some cuts. Most of this conversation is pilot-centric regardless.

If you are not happy with your pay , then quit, there are hundreds willing to take your place. Maybe dental school would be an option for you.

[altiplano]

Talking pre-pandemic here, I have no way of believing that a strategic long-term reduction of capacity is in any company's business plan when the products are profitable.

Let's look a couple of years down the road, as it would be comparable to pre-pandemic.
TS had high loads for Transatlantic flying. I'm assuming AC and Rouge were similar, or at least close.

You're telling me that with available patronage and capacity in the mid-term to long-term projections they're going to simply.... reduce it? Short term obviously, and some consolidation on overlap in order to deliver an effective timetable, maybe. That's what their accountants will figure out, but cutting overall total, profitable capacity by 30% when the demand would outweigh in the mid and long is borderline hilarious.

Also, those aren't 154 paired slots (308 total) that are going to disappear. Again, that's crazy. They're only the market for 5 years. Who is going to pick them up? Maybe a few chunks here and there, but after 60 months, the majority will be right back to AC permanently.

Listen, the slots are of value here because the newest strategic modelling promotes use of LR narrow bodies on Trans-AT routes. 737 MAX, and 321-NeoLR. This means more slots for the same capacity as the superceded wide-body model.

Also means more planes.

And pilots.

There's a reason this has been on the books for a few years by AC. There also has to be a very compelling reason why the TS BOD insists on the AC trajctory over all others. And a reason AC didn't walk after a few opportunities.

Us bitching about our crumbs won't change anything, I'm not trying to argue with anyone, I'm just stating facts, I'd rather just enjoy life.

No you aren't stating facts, you're guessing.

But you don't have to listen to me, as I said those were the words that I watched and heard come out of Calin Rovinescu's mouth. That isn't me supposing on what their plan is, that's what he said the plan is. There's no reason to think Mike Rousseau would move any differently.

Why do they want to reduce capacity - aka "rationalize capacity" - because it increases yields.

There won't be more planes than there were separately at the start, there won't be more jobs.

Anyway. I think you're dreaming with your predictions there. But as you say you aren't changing anything. Keep enjoying the good life...

[LittleNelly]

The topic of operational redundancy in many support departments has been discussed here ad nasuem and is still an unknown with the "Brand Maintenance" agenda, but common sense predicts cuts. Probably still better than being run into the ground by some third party. Most of this conversation is pilot-centric regardless.

So oh well those non-pilot employees don’t matter as long as the Transat pilots get their number I guess.

[800man]

Ok, well fair points. However, altiplano, I wouldn't trust a f in word of what a CEO tells their employees in a public meeting, especially CR. I'm sure you get me here. That being said I have no idea how it bodes for both of us.

I'm going to hold to the narrowbody/slot ratio as my opinion. It is a fact, however, that it's a long term goal and this is factorially a short-mid adaptation to it.

LittleNelly, I thought we were having a discussion. You just twisted my words and you know it. Is there a point continuing if that the way it goes?
Cheers.

[LittleNelly]

LittleNelly, I thought we were having a discussion. You just twisted my words and you know it. Is there a point continuing if that the way it goes?
Cheers.

I neither twisted words nor took anything out of context. I simply quoted your entire statement admitting that this deal will in fact lead to job losses but that it wasn’t relevant to pilots.
People need to wake up and realize the costs to some people who will permanently loose their jobs over a merger. It doesn’t matter if they are pilots or not, whatever outcome provides the most jobs for everyone is the best course of action for the employees of both companies

[rudder]

AC final decision on this transaction is now weeks or months away.

Seemingly, AC has resumed discussions with TRZ about possibly further modifying the already modified purchase agreement.

Secondly, terms of industry specific aid will have to be factored in. Likely weeks away.

Finally, AC will not close on the deal until EU approval is granted and associated conditions of approval are considered. Likely months away.

As I have suggested before - AC will be fine with or without this transaction. TRZ is on much less solid ground.

Long term, TRZ might preserve more jobs as an independent company. The more that AC is required to artificially preserve local employment levels as a condition of approval the less attractive the transaction will look.

I was 90:10 on the transaction bring consummated after the revised purchase agreement was reached. With the CDN approval conditions unveiled, yet unknown industry aid package, and likely EU approval conditions, I am 60:40. AC will not close on a deal that leaves it in any way compromised to compete or with a cost structure/debt load that is inconsistent with its long term objectives.

[jpilot77]

AC final decision on this transaction is now weeks or months away.

Seemingly, AC has resumed discussions with TRZ about possibly further modifying the already modified purchase agreement.

Secondly, terms of industry specific aid will have to be factored in. Likely weeks away.

Finally, AC will not close on the deal until EU approval is granted and associated conditions of approval are considered. Likely months away.

As I have suggested before - AC will be fine with or without this transaction. TRZ is on much less solid ground.

Long term, TRZ might preserve more jobs as an independent company. The more that AC is required to artificially preserve local employment levels as a condition of approval the less attractive the transaction will look.

I was 90:10 on the transaction bring consummated after the revised purchase agreement was reached. With the CDN approval conditions unveiled, yet unknown industry aid package, and likely EU approval conditions, I am 60:40. AC will not close on a deal that leaves it in any way compromised to compete or with a cost structure/debt load that is inconsistent with its long term objectives.

Yep 100%. I think everyone on both sides would just like a decision one way or the other. The limbo of waiting for all the chips to fall is the toughest part.

[tsgas]

AC final decision on this transaction is now weeks or months away.

Seemingly, AC has resumed discussions with TRZ about possibly further modifying the already modified purchase agreement.

Secondly, terms of industry specific aid will have to be factored in. Likely weeks away.

Finally, AC will not close on the deal until EU approval is granted and associated conditions of approval are considered. Likely months away.

As I have suggested before - AC will be fine with or without this transaction. TRZ is on much less solid ground.

Long term, TRZ might preserve more jobs as an independent company. The more that AC is required to artificially preserve local employment levels as a condition of approval the less attractive the transaction will look.

I was 90:10 on the transaction bring consummated after the revised purchase agreement was reached. With the CDN approval conditions unveiled, yet unknown industry aid package, and likely EU approval conditions, I am 60:40. AC will not close on a deal that leaves it in any way compromised to compete or with a cost structure/debt load that is inconsistent with its long term objectives.

Yep 100%. I think everyone on both sides would just like a decision one way or the other. The limbo of waiting for all the chips to fall is the toughest part.

In the words of Tom Petty "the waiting is the hardest part".