Anyone see any parallels?

[RippleRock]

https://canadianaviationnews.wordpress. ... unity/amp/


Scary parallel to when PWA bought Wardair. How much "off track" could Westjet possibly get? Merge these two companies, load WJ with nearly $1,000,000,000 in debt and obligations, with an entirely different fleet and a bunch of "senior high payed staff" that need merging into seniority list and find out. A Montreal headquarters might be pretty cool. Not like Alberta needs the jobs.

Rudder, any thoughts?

[rudder]

https://canadianaviationnews.wordpress. ... unity/amp/


Scary parallel to when PWA bought Wardair. How much "off track" could Westjet possibly get? Merge these two companies, load WJ with nearly $1,000,000,000 in debt and obligations, with an entirely different fleet and a bunch of "senior high payed staff" that need merging into seniority list and find out. A Montreal headquarters might be pretty cool. Not like Alberta needs the jobs.

Rudder, any thoughts?

More complicated than it looks, notwithstanding the fact that these 2 companies could not be more different. Including SWOOP and WJE, that is 4 airlines. Many different products. Overlap. Excess administration. Politics. Geography. Etc.

As I have said elsewhere, the TRZ shareholders do not deserve to be rewarded. And even $5 per share is a reward.

I would do it up as a prepackaged CCAA filing. ONEX would offer bridge financing, a capital infusion for the balance sheet, use CCAA to void unsecured debt and unwanted leases, and share ownership with the unsecured creditors once exiting CCAA.

An eventual IPO would possibly pay ONEX back and allow them to reduce their stake in a restructured TRZ.

ONEX would expect some government support. Either provincially, federally, or both.

An airline partner offers a greater likelihood for survival of the current enterprise. Investors like PKP are a ticket to eventual bankruptcy for TRZ.

FWIW - I believe the WJ pilots would show a more enlightened view of the transaction than the AC pilots did. There are less threats to WJ pilots than existed for AC pilots.

[RustyDeuce]

Transat can fold as an airline and operate solely as a vacation tour company.
Buy seats on WJ.

Zero investment required by WJ.

[330heavy]

FWIW - I believe the WJ pilots would show a more enlightened view of the transaction than the AC pilots did.

Sad truth unfortunately. I looked forward to working with a number of friends and ex co-workers at AC. Also content this is behind us and hoping for brighter future for all of us at TS and elsewhere in Canada.

[DanWEC]

There is a factor here that keeps getting ignored with all the references and parallels drawn to past airline failures, mergers, etc, and that's the fact that gov't backed airline aid is likely, finally, coming soon. (As ridiculous as it sounds) and it seems it may be a package tailored per airline.

The current difficulties are a very, very different scenario from a company failing on its own without the ability to take a positive trajectory, and it's difficult to compare with past events in the industry.

What this will mean exactly for a play, I'm not 100% sure yet... this situation is literally unprecedented and many things have been totally unpredictable in many industries, both positive and negative.

[pacman007]

Why would westjet want Transat? They have a mix of very old aircraft and have a huge amount of debt coming due. The new Airbus XLR is not that hard to get because many airlines would have cancelled there delivery. If Transat were to restructure maybe there 321xlr slots would become available. Also westjet could just start a base in Montreal tomorrow and compete. Just don’t see how this would benefit westjet at all. Just my 2 cents.....the more probable scenario is Sunwing and Transat merge and dominate the vacation industry....

[Mach1]

Anyone see any parallels?

No... but I do see a lot of intersecting, some transversal and even some perpendiculars. Don't even get me started on the curves.

It is a pipe dream on the part of the author who wrote that article.... just like the rumour that WJ was going to buy Sunwing.

[fish4life]

Why would westjet want Transat? They have a mix of very old aircraft and have a huge amount of debt coming due. The new Airbus XLR is not that hard to get because many airlines would have cancelled there delivery. If Transat were to restructure maybe there 321xlr slots would become available. Also westjet could just start a base in Montreal tomorrow and compete. Just don’t see how this would benefit westjet at all. Just my 2 cents.....the more probable scenario is Sunwing and Transat merge and dominate the vacation industry....

Montreal is a tough nut to crack, WestJet has tried and failed a few times

[seriousflyer]

Ya could be...but westjet is most likely hyper focused on keeping their group of 3 companies intact and profitable, along side a new ownership group as well developing a relationship with Delta in form of a joint venture.

If transat is still looking for a buyer in 3 or 5 years, westjet/onex could strategically maneuver.

But from what I've seen over 5+ years, WJA wouldn't make a quick reactionary pivot. They do things aggressively and opportunistic but at WJA terms and conditions along their own timelines.

However, the industry is in a massive hurricane right now, where companies are getting spun around and landing elsewhere. Same thing with sunwing situations, anything can happen.

[fish4life]

One other big difference is having a diversified investment firm owning an airline. Traditionally in bad times airlines rack up a bunch of debt which makes for hard years on the recovery side as they have to cover their debt obligations. In this case WestJet has been losing lots of money (like every Canadian airline) but their ownership has actually been profitable throughout the entire pandemic.

It leads to a unique situation where the opportunity to buy low is there and it can be done using Onex’s money and not Westjet’s. I still don’t see anyone touching Transat though without either government aid or as part of a CCAA restructuring because it is still an expensive purchase now with the current and future debt obligations.

[ALPApolicy]

Anyone see any parallels?

No... but I do see a lot of intersecting, some transversal and even some perpendiculars. Don't even get me started on the curves.

It is a pipe dream on the part of the author who wrote that article.... just like the rumour that WJ was going to buy Sunwing.

DOH!!!! (Meaning "DOH!!!!", not Date of Hire)

[Mach1]

DOH!!!! (Meaning "DOH!!!!", not Date of Hire)

Yeah... score one for the rumour mill. Minus one for me.

Admittedly, a rather sharp departure from the company's past history of not buying other companies.