Transat AT reaches $700-million aid deal with federal government

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DanWEC
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Re: Transat AT reaches $700-million aid deal with federal government

Post by DanWEC »

This loan as a veiled takeover. Interest alone in year 2 is over 24 million, plus repayments. The Fed has been angling for some airline nationalization as a revenue stream for a while. What's going to happen when TRZ defaults? They won't go under or be purchased by a third party, they'll be absorbed into the crown for pennies on the dollar.
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FatPilot
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Re: Transat AT reaches $700-million aid deal with federal government

Post by FatPilot »

LOL
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Sharklasers
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Re: Transat AT reaches $700-million aid deal with federal government

Post by Sharklasers »

DanWEC wrote: Fri Apr 30, 2021 10:31 am This loan as a veiled takeover. Interest alone in year 2 is over 24 million, plus repayments. The Fed has been angling for some airline nationalization as a revenue stream for a while. What's going to happen when TRZ defaults? They won't go under or be purchased by a third party, they'll be absorbed into the crown for pennies on the dollar.
:lol: :lol: :lol: :lol: :lol:
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Re: Transat AT reaches $700-million aid deal with federal government

Post by Old fella »

Question? Where does AC Rouge fit into all of this now that AC and AT decided not to get married. From what I have been hearing AT always offered a superior product especially on the transatlantic sector.
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FL030
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Re: Transat AT reaches $700-million aid deal with federal government

Post by FL030 »

I imagine they'll only ramp back Rouge if Air Transat manages to make a comeback.
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Hangry
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Re: Transat AT reaches $700-million aid deal with federal government

Post by Hangry »

Rouge planes were full. They will definitely be back when demand is there.
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Latitude
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Re: Transat AT reaches $700-million aid deal with federal government

Post by Latitude »

Old fella wrote: Fri Apr 30, 2021 4:12 pm Question? Where does AC Rouge fit into all of this now that AC and AT decided not to get married. From what I have been hearing AT always offered a superior product especially on the transatlantic sector.
Indeed, but Rouge will be back as they are still trying to kill Transat… as they’ve been trying for the last 15-20years.
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DanWEC
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Re: Transat AT reaches $700-million aid deal with federal government

Post by DanWEC »

Sharklasers wrote: Fri Apr 30, 2021 2:17 pm
DanWEC wrote: Fri Apr 30, 2021 10:31 am This loan as a veiled takeover. Interest alone in year 2 is over 24 million, plus repayments. The Fed has been angling for some airline nationalization as a revenue stream for a while. What's going to happen when TRZ defaults? They won't go under or be purchased by a third party, they'll be absorbed into the crown for pennies on the dollar.
:lol: :lol: :lol: :lol: :lol:
Let's just tie a little bow on this for later my man. All good, talk in a few years.
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Re: Transat AT reaches $700-million aid deal with federal government

Post by Hangry »

DanWEC wrote: Sat May 01, 2021 12:05 am
Sharklasers wrote: Fri Apr 30, 2021 2:17 pm
DanWEC wrote: Fri Apr 30, 2021 10:31 am This loan as a veiled takeover. Interest alone in year 2 is over 24 million, plus repayments. The Fed has been angling for some airline nationalization as a revenue stream for a while. What's going to happen when TRZ defaults? They won't go under or be purchased by a third party, they'll be absorbed into the crown for pennies on the dollar.
:lol: :lol: :lol: :lol: :lol:
Let's just tie a little bow on this for later my man. All good, talk in a few years.
If they were looking to acquire an airline for a revenue stream they sure wouldn’t pick TRZ. You need to show you can make revenue first I would think.
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DanWEC
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Re: Transat AT reaches $700-million aid deal with federal government

Post by DanWEC »

Ah c'mon, nothing like a good conspiracy theory!
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Sharklasers
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Re: Transat AT reaches $700-million aid deal with federal government

Post by Sharklasers »

DanWEC wrote: Sat May 01, 2021 5:10 am Ah c'mon, nothing like a good conspiracy theory!
But it’s not a good conspiracy and reeks of desperation. I don’t doubt Trz survives in some capacity but it won’t be as the federal governments national carrier. The management of Transat couldn’t even successfully run a charter vacation company during the biggest boom in aviation history.
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DanWEC
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Re: Transat AT reaches $700-million aid deal with federal government

Post by DanWEC »

Huh? In 2017 TRZ posted a net profit 134 million, on a margin of 4% on gross revenue, which is actually stellar for the hospitality industry. Their mid and long-term challenges were (past tense, as obviously the game has drastically changed) increasing volume and market share outside of the loyal base as expenses are relentlessly increasing and chewing into margin. Their current trajectory wasn't forecasted to be sustainable in the fairly near future. They had 500 million in the bank to use for repositioning, or a buyer to bankroll the changes.... but that's all moot now.
However, don't forget the airline is just a vertical integration vehicle. If there aren't restrictions this winter, the Southern vacation market is setting up to be the highest grossing ever across all tourism businesses.

Regardless, I'm just speculating on what will happen to ownership and operation of a company if they default on a gov't loan.
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Last edited by DanWEC on Sat May 01, 2021 4:07 pm, edited 1 time in total.
simply_no_one
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Re: Transat AT reaches $700-million aid deal with federal government

Post by simply_no_one »

134 million net profit and how many hundreds in debt?

Even worse now? With those kind of "stellar" margins (for the hospitality industry as you say) it will take them decades to pay off this debt. :rolleyes:

If AT wants to have even a tiny part of a coming potential winter market, they'll need to be recalling fairly soon and start pumping pilots (and FAs) back through recurrent training. Will they do that when they are this much in the hole? Will they burn that ever precious high interest loan money on a "maybe"?

Time will tell. Personally I think AC will devour any possible winter vacation market this year given how many pilots they have trained and on staff ready to fly now. Not in a month, not in 3 months.
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Last edited by simply_no_one on Sat May 01, 2021 4:09 pm, edited 1 time in total.
Latitude
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Re: Transat AT reaches $700-million aid deal with federal government

Post by Latitude »

DanWEC wrote: Sat May 01, 2021 3:59 pm Huh? In 2017 TRZ posted a net profit 134 million, on a margin of 4% on gross revenue, which is actually stellar for the hospitality industry. Their mid and long-term challenges were (past tense, as obviously the game has drastically changed) increasing volume and market share outside of the loyal base as expenses are relentlessly increasing and chewing into margin. Their current trajectory wasn't forecasted to be sustainable in the fairly near future. They had 500 million in the bank to use for repositioning, or a buyer to bankroll the changes.... but that's all moot now.
However, don't forget the airline is just a vertical integration vehicle. If there aren't restrictions this winter, the Southern vacation market is setting up to be the highest grossing ever across all tourism businesses.
Yes, agree. But ask an AC employee and all they have so say is how bad Transat was run, how they were to fail eventually, that they suck, etc.

Reality is they had 500m$+ cash, they’ve never been bankrupt or went CCAA for the past 35 years, unlike AC, and they were growing and flying at full capacity more than never, all of this without asking 4000$ for a shitty Rouge premium class ticket to the Caribbean.
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DanWEC
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Re: Transat AT reaches $700-million aid deal with federal government

Post by DanWEC »

simply_no_one wrote: Sat May 01, 2021 4:07 pm it will take them decades to pay off this debt.
Yup. That's the problem, at an interest increase of 2% per year. They were never making billions, they just don't have the volume or economy of scale in an industry with such small margins. They made a decent profit, paid shareholders and kept employees fed. But to be suddenly saddled with this much liability with such relatively small revenue is untenable.
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simply_no_one
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Re: Transat AT reaches $700-million aid deal with federal government

Post by simply_no_one »

Latitude wrote: Sat May 01, 2021 4:08 pm
DanWEC wrote: Sat May 01, 2021 3:59 pm Huh? In 2017 TRZ posted a net profit 134 million, on a margin of 4% on gross revenue, which is actually stellar for the hospitality industry. Their mid and long-term challenges were (past tense, as obviously the game has drastically changed) increasing volume and market share outside of the loyal base as expenses are relentlessly increasing and chewing into margin. Their current trajectory wasn't forecasted to be sustainable in the fairly near future. They had 500 million in the bank to use for repositioning, or a buyer to bankroll the changes.... but that's all moot now.
However, don't forget the airline is just a vertical integration vehicle. If there aren't restrictions this winter, the Southern vacation market is setting up to be the highest grossing ever across all tourism businesses.
Yes, agree. But ask an AC employee and all they have so say is how bad Transat was run, how they were to fail eventually, that they suck, etc.

Reality is they had 500m$+ cash, they’ve never been bankrupt or went CCAA for the past 35 years, unlike AC, and they were growing and flying at full capacity more than never, all of this without asking 4000$ for a shitty Rouge premium class ticket to the Caribbean.
Oh blah blah blah. Give it a rest with the CCAA narrative. The fact of the matter is, AC was billions in the green over the last number of years. Hardly a poorly run airline. AT had 500 million in cash, but no one ever mentions that money was largely in the form of future pax ticket revenue.
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DanWEC
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Re: Transat AT reaches $700-million aid deal with federal government

Post by DanWEC »

Oh FFS can't we just have a normal conversation without this pissing match? None of us run the companies. Why be so sensitive that AC was in CCAA? TS pilots could very well all be unemployed in a few years, so I'd say there are bigger fish to fry here.

Anyways, From where I sit in my professional analyst armchair with a beer; after years of cost cutting and positioning, AC is profitable now because of their volume. I guarantee they aren't making even close to 4% margin, but with 112 Billion ASM annually they can make a fraction of that. But it also only takes a fraction more to start sinking.
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haironfire
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Re: Transat AT reaches $700-million aid deal with federal government

Post by haironfire »

This is a post not from AC or TRZ (if that's the way your callsign goes).

Let's look at the reality of the situation? The feds through out a lifeline,and that's it. Life as you knew it in the GOOD OLD DAYS ARE DONE!

Senior TRZ pilots on the list are going to feel this big time. Juniors even worse. It is what is required for our industry to get healthy again.

Sorry, but reality bites right now.
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Re: Transat AT reaches $700-million aid deal with federal government

Post by pelmet »

Any chance of Transat hiring an outside company to do all their flying. I bet WJ could do it cheaper with narrow and widebodies quickly available.
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co-joe
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Re: Transat AT reaches $700-million aid deal with federal government

Post by co-joe »

What bothers me about this is the government is loaning TS money, to pay back tickets that the government cancelled, and TS will have to pay interest on that loan? It's basically extortion. It's like beating you up for your lunch money, and then loaning you money to buy lunch and charging you interest on it.
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