Air Transat considering 80-person layoff amid financial turbulence

[a2btrail]

"Transat A.T. Inc. is preparing to lay off up to 80 workers as the tour operator struggles to turn its finances around, according to a preliminary notice sent to the Quebec government.

Over the course of the year, the company has felt the headwinds of stiff competition, engine recalls and the threat of a union strike, which together conspired to drain more money from the struggling outfit.

Quebec labour rules require some companies to submit potential layoff figures for provincially regulated jobs, even if the cuts never come to pass.

In a notice to the province's employment department, Transat says the layoffs could be effective by Nov. 1, specifying in an email that they would not apply to pilots, flight attendants or other federally regulated roles.

Transat spokesman Andrean Gagne says notification of the potential layoffs marks a "precautionary measure" in order to comply with provincial rules.

In its first three quarters, Transat reported a combined net loss of $155.3 million versus a loss of $28.5 million in the same period a year earlier."


Do we really believe this will not affect FAs or Pilots?

Companies often construct layoffs in stages.

[a2btrail]

https://stlawyers.ca/blog-news/air-tran ... urbulence/

I wish no layoffs for anyone attached to AT. If you know someone that may be affected point them to the above link.

[rudder]

"Transat A.T. Inc. is preparing to lay off up to 80 workers as the tour operator struggles to turn its finances around, according to a preliminary notice sent to the Quebec government.

Over the course of the year, the company has felt the headwinds of stiff competition, engine recalls and the threat of a union strike, which together conspired to drain more money from the struggling outfit.

Quebec labour rules require some companies to submit potential layoff figures for provincially regulated jobs, even if the cuts never come to pass.

In a notice to the province's employment department, Transat says the layoffs could be effective by Nov. 1, specifying in an email that they would not apply to pilots, flight attendants or other federally regulated roles.

Transat spokesman Andrean Gagne says notification of the potential layoffs marks a "precautionary measure" in order to comply with provincial rules.

In its first three quarters, Transat reported a combined net loss of $155.3 million versus a loss of $28.5 million in the same period a year earlier."


Do we really believe this will not affect FA's or Pilot?

Companies often construct layoffs in stages.

Watch the ‘spin doctors’ come out on this one. There is no spin - this is bad news and may just be the first in a series.

TRZ has a debt loaded balance sheet and its revenues are being hampered by an oversaturated marketplace resulting in depressed yields. The disappearance of Flair might help, but it won’t fix the balance sheet.

Hopefully the c suite has a plan apart from the public plan. Contingency planning is all part of competent governance. Hope is not a plan.

[DanWEC]

Just goes to show to all the armchair analysts here how delicate and critical the margins are in this business.

Bookings are even higher than last year, and the only differences resulting in this change are the upgauging of routes to the 330 from the 321neo due to the P&W engine issue, and maintaining competitive pricing. These 2 factors have shrunk the margin and made the difference between making or losing millions.

P&L in this industry is an absolute knife edge. The tiniest misstep or obstacle can have drastic consequences.

[330heavy]

"Transat A.T. Inc. is preparing to lay off up to 80 workers as the tour operator struggles to turn its finances around, according to a preliminary notice sent to the Quebec government.

Over the course of the year, the company has felt the headwinds of stiff competition, engine recalls and the threat of a union strike, which together conspired to drain more money from the struggling outfit.

Quebec labour rules require some companies to submit potential layoff figures for provincially regulated jobs, even if the cuts never come to pass.

In a notice to the province's employment department, Transat says the layoffs could be effective by Nov. 1, specifying in an email that they would not apply to pilots, flight attendants or other federally regulated roles.

Transat spokesman Andrean Gagne says notification of the potential layoffs marks a "precautionary measure" in order to comply with provincial rules.

In its first three quarters, Transat reported a combined net loss of $155.3 million versus a loss of $28.5 million in the same period a year earlier."


Do we really believe this will not affect FA's or Pilot?

Companies often construct layoffs in stages.

Watch the ‘spin doctors’ come out on this one. There is no spin - this is bad news and may just be the first in a series.

TRZ has a debt loaded balance sheet and its revenues are being hampered by an oversaturated marketplace resulting in depressed yields. The disappearance of Flair might help, but it won’t fix the balance sheet.

Hopefully the c suite has a plan apart from the public plan. Contingency planning is all part of competent governance. Hope is not a plan.

I don't hope for the disappearance of Flair, aside from some sun routes they don't compete with us directly. The article isn't arrucate, there will be some FA layoffs. Pilots none at this time as we are still short crew.

[rudder]

"Transat A.T. Inc. is preparing to lay off up to 80 workers as the tour operator struggles to turn its finances around, according to a preliminary notice sent to the Quebec government.

Over the course of the year, the company has felt the headwinds of stiff competition, engine recalls and the threat of a union strike, which together conspired to drain more money from the struggling outfit.

Quebec labour rules require some companies to submit potential layoff figures for provincially regulated jobs, even if the cuts never come to pass.

In a notice to the province's employment department, Transat says the layoffs could be effective by Nov. 1, specifying in an email that they would not apply to pilots, flight attendants or other federally regulated roles.

Transat spokesman Andrean Gagne says notification of the potential layoffs marks a "precautionary measure" in order to comply with provincial rules.

In its first three quarters, Transat reported a combined net loss of $155.3 million versus a loss of $28.5 million in the same period a year earlier."


Do we really believe this will not affect FA's or Pilot?

Companies often construct layoffs in stages.

Watch the ‘spin doctors’ come out on this one. There is no spin - this is bad news and may just be the first in a series.

TRZ has a debt loaded balance sheet and its revenues are being hampered by an oversaturated marketplace resulting in depressed yields. The disappearance of Flair might help, but it won’t fix the balance sheet.

Hopefully the c suite has a plan apart from the public plan. Contingency planning is all part of competent governance. Hope is not a plan.

I don't hope for the disappearance of Flair, aside from some sun routes they don't compete with us directly. The article isn't arrucate, there will be some FA layoffs. Pilots none at this time as we are still short crew.

All true. And nobody asks for failure. But pilots fly the planes, they don’t run the business.

No matter who you are - you cannot sustain selling the car for less than the cost to build it. That includes labour, materials, overhead, and debt servicing.

Interest rates are coming down. Good news if you owe money. But there are still too many seats chasing too few customers. And every carrier is guilty.

History has shown us how this will go. You can defy gravity but you cannot defy economics.

[Sharklasers]

Some of us have been dancing on Transats grave so long our legs are tired. Transat will be 100% fine. There will be a quick trip through the CCAA car wash and transit will come out the other side competitive again. I would hate to be the shareholder right now, but if I was an employee, I probably wouldn’t be losing too much sleep

[Sharklasers]

If it wasn’t for the debt servicing cost on the federal loan money transit would’ve been in the green in the third quarter in the event of a bankruptcy that will be the first debt wiped from the books

[cdnavater]

If it wasn’t for the debt servicing cost on the federal loan money transit would’ve been in the green in the third quarter in the event of a bankruptcy that will be the first debt wiped from the books

Oh well, what’s another billion to the tax payer, drop in the bucket!
Can we refer to Transat as a federal owned airline after that!

[rudder]

If it wasn’t for the debt servicing cost on the federal loan money transit would’ve been in the green in the third quarter in the event of a bankruptcy that will be the first debt wiped from the books

You may want to reference the terms of the loan…….

I don’t know what they are but I would t be surprised to see it as a first order creditor or non-forgiveable. I am not even certain it is non-secured.

[Sharklasers]

If it wasn’t for the debt servicing cost on the federal loan money transit would’ve been in the green in the third quarter in the event of a bankruptcy that will be the first debt wiped from the books

Oh well, what’s another billion to the tax payer, drop in the bucket!
Can we refer to Transat as a federal owned airline after that!

That money is already gone man.
Would you rather it vanish and 5000 people lose their jobs or would you rather just the take the L?

[rudder]

If it wasn’t for the debt servicing cost on the federal loan money transit would’ve been in the green in the third quarter in the event of a bankruptcy that will be the first debt wiped from the books

Oh well, what’s another billion to the tax payer, drop in the bucket!
Can we refer to Transat as a federal owned airline after that!

That money is already gone man.
Would you rather it vanish and 5000 people lose their jobs or would you rather just the take the L?

FYI - the Feds did not rescue AC.

TRZ is a private corporation. It will survive or fail based on economics and, if necessary, the CCAA process.

Here is some news for labour at TS. You will not go through CCAA unscathed.

[Sharklasers]

[quote=Sharklasers post_id=<a href="tel:1320588">1320588</a> time=<a href="tel:1727984616">1727984616</a> user_id=53543]
[quote=cdnavater post_id=<a href="tel:1320584">1320584</a> time=<a href="tel:1727979821">1727979821</a> user_id=78357]
[quote=Sharklasers post_id=<a href="tel:1320579">1320579</a> time=<a href="tel:1727977185">1727977185</a> user_id=53543]
If it wasn’t for the debt servicing cost on the federal loan money transit would’ve been in the green in the third quarter in the event of a bankruptcy that will be the first debt wiped from the books

Oh well, what’s another billion to the tax payer, drop in the bucket!
Can we refer to Transat as a federal owned airline after that!
[/quote]

That money is already gone man.
Would you rather it vanish and 5000 people lose their jobs or would you rather just the take the L?
[/quote]

FYI - the Feds did not rescue AC.

TRZ is a private corporation. It will survive or fail based on economics and, if necessary, the CCAA process.

Here is some news for labour at TS. You will not go through CCAA unscathed.
[/quote]

The MP for Papineau and the premier of Quebec/founder of Air Transat are not about to let Transat go under for something as trivial as Alberta taxpayer money that’s already gone. There would be zero point in letting those unsecured LEEFF loans drag Transat under now, the whole point of the loans was to preserve jobs in the LaBelle province. They will be discharged in CCAA day 1.

[cdnavater]

[quote=Sharklasers post_id=<a href="tel:1320588">1320588</a> time=<a href="tel:1727984616">1727984616</a> user_id=53543]
[quote=cdnavater post_id=<a href="tel:1320584">1320584</a> time=<a href="tel:1727979821">1727979821</a> user_id=78357]
[quote=Sharklasers post_id=<a href="tel:1320579">1320579</a> time=<a href="tel:1727977185">1727977185</a> user_id=53543]
If it wasn’t for the debt servicing cost on the federal loan money transit would’ve been in the green in the third quarter in the event of a bankruptcy that will be the first debt wiped from the books

Oh well, what’s another billion to the tax payer, drop in the bucket!
Can we refer to Transat as a federal owned airline after that!

That money is already gone man.
Would you rather it vanish and 5000 people lose their jobs or would you rather just the take the L?

FYI - the Feds did not rescue AC.

TRZ is a private corporation. It will survive or fail based on economics and, if necessary, the CCAA process.

Here is some news for labour at TS. You will not go through CCAA unscathed.
[/quote]

The MP for Papineau and the premier of Quebec/founder of Air Transat are not about to let Transat go under for something as trivial as Alberta taxpayer money that’s already gone. There would be zero point in letting those unsecured LEEFF loans drag Transat under now, the whole point of the loans was to preserve jobs in the LaBelle province. They will be discharged in CCAA day 1.
[/quote][/quote]
It appears you work for AT, I wonder how you would feel if WJ were having trouble and the and the tax payer had to foot the bill!
You’re pretty nonchalant about tax payer money, it’s not completely unsecured but really it seems 80% of it might have been but if you think you’re coming out the other side of CCAA without some concessions and you’re already behind, I don’t know what to tell you but, good luck.
By the way, the terms of the leeef loan include a government appointed board member and 15% ownership, among other conditions

[Sharklasers]

Nope I don’t work for TRZ.
I’m just realistic about their future. It doesn’t make sense to turn out the lights there for the sake of the LEEFF loans, trz has no assets, a 65 million dollar market cap, a bunch of expensive leases for gliders. The Canadian tax payer isn’t getting any of that money back no matter if Transat is dissolved or not. So if the only thing standing between 5000 Quebec jobs and 5000 more people on the dole then they will just forego it in restructuring. I’m sure it will be uncomfortable for the employee groups but Transat isn’t going anywhere, the bag holders will get wiped out and the cycle continues. If I were Transat I would be trying to get that CCAA underway now before Trudeau and the liberals get sent to the sunken place, PP might not be as generous but I’m sure the outcome wouldn’t change much either way.

[CaptDukeNukem]

Nope I don’t work for TRZ.
I’m just realistic about their future. It doesn’t make sense to turn out the lights there for the sake of the LEEFF loans, trz has no assets, a 65 million dollar market cap, a bunch of expensive leases for gliders. The Canadian tax payer isn’t getting any of that money back no matter if Transat is dissolved or not. So if the only thing standing between 5000 Quebec jobs and 5000 more people on the dole then they will just forego it in restructuring. I’m sure it will be uncomfortable for the employee groups but Transat isn’t going anywhere, the bag holders will get wiped out and the cycle continues. If I were Transat I would be trying to get that CCAA underway now before Trudeau and the liberals get sent to the sunken place, PP might not be as generous but I’m sure the outcome wouldn’t change much either way.

I’ll give you that one. That was hilarious

[Brakefans]

It’s only going to get worse for Transat as competition will keep getting more intense. None of their Canadian/international competitors (AF, BA, KLM, TAP, AC…) have any financial issues. Now that TRZ has retreated most of their operations to YUL/YYZ routes, they have become much more vulnerable.

Imagine when AC gets their 30 A321XLR starting next year.

[fish4life]

AT’s biggest mistake was not going through CCAA during Covid. Will they survive ? Yes but it would be naive for anyone to think they will come out the other side as big as they are now. One thing AT has that is worth money is desirable slots in constrained airports and they will need to divest from some of those.
LEEF loans will not just be forgiven and debt from other creditors will become more expensive especially private unsecured debt that comes up for renewal. Bond cost for a corporation that has a risk of CCAA will not have lower interest rates if the bank of Canada drops their so so that won’t help and will just further accelerate the cash crunch.

[safetyfirst123]

I bet Onex and others are sniffing around, but there won't be much interest with those debt levels

[CaptDukeNukem]

I bet Onex and others are sniffing around, but there won't be much interest with those debt levels

Onex won’t be buying Transat. Debt sheet is ridiculous

But I have been wrong in the past

[Sharklasers]

I bet Onex and others are sniffing around, but there won't be much interest with those debt levels

Onex won’t be buying Transat. Debt sheet is ridiculous

But I have been wrong in the past

My gut says that they will go through the CCAA carwash and get the balance sheet under control and it will make them an enticing target for a merger either voluntary or forced as part of the CCAA process. I can’t see AC voluntarily jumping in there unless the restrictions imposed by the Europeans are changed or removed.

[rudder]

I bet Onex and others are sniffing around, but there won't be much interest with those debt levels

Onex won’t be buying Transat. Debt sheet is ridiculous

But I have been wrong in the past

My gut says that they will go through the CCAA carwash and get the balance sheet under control and it will make them an enticing target for a merger either voluntary or forced as part of the CCAA process. I can’t see AC voluntarily jumping in there unless the restrictions imposed by the Europeans are changed or removed.

AC was not going to proceed due to the requirements set forth by the EU regarding capacity/routes. Those restrictions will not be relaxed. COVID simply reinforced that decision.

Any further consolidation in the CDN industry will have to happen away from AC. The premise of non-QC based ownership/control of TS/TRZ seems antithetical.

At some point there will have to be a realization in Canada that there are too many seats chasing too few customers. But the airline industry is about egos. And everything is fine right up until it isn’t.

[Localizer]

It’s only going to get worse for Transat as competition will keep getting more intense. None of their Canadian/international competitors (AF, BA, KLM, TAP, AC…) have any financial issues. Now that TRZ has retreated most of their operations to YUL/YYZ routes, they have become much more vulnerable.

Imagine when AC gets their 30 A321XLR starting next year.

Food for thought ..

Air France/KLM - $10 billion Euros COVID bailout
Lufthansa - $9 billion Euros COVID bailout
TAP Portugal - $2.55 billion Euros COVID bailout
British Airways - $2 billion Euros COVID bailout

It’s pretty easy to have a good balance sheet when you get a low to no restriction bailout. What did the Canadian government offer Canadian airlines who couldn’t operate for close to two years?? High interest loans and a piece of their pie.

Would you like a breakdown of American carriers and the bailouts they received?

Canada is a fucking joke! I don’t blame anyone who’s trying to get then visa to leave.

[Sharklasers]

No one is arguing that free money wouldn’t have helped Transat but all those airlines you list were major flag carriers and Transat was a small money losing sun n fun before COVID and when it came time for the government to pick winners and losers in Europe there is no guarantee that’s Transat would have seen any of that cash. Transat would be more comparable to FrenchBee which seemingly didn’t receive anything.
All this to say that what’s done is done, Transat will not be allowed to fail. That has been stated and repeated at both the federal and Provincial level. The Feds have now entered their “we don’t care how it looks” era and I’m sure that loan money could be discharged even before CCAA in exchange for some board seats or other concessions for the soon to be unemployed MPs.
If the LEEFF is discharged the stock price would immediately X5. They value of the governments shares would increase, the value of the friend of the governments shares would increase.

[Localizer]

No one is arguing that free money wouldn’t have helped Transat but all those airlines you list were major flag carriers and Transat was a small money losing sun n fun before COVID and when it came time for the government to pick winners and losers in Europe there is no guarantee that’s Transat would have seen any of that cash. Transat would be more comparable to FrenchBee which seemingly didn’t receive anything.
All this to say that what’s done is done, Transat will not be allowed to fail. That has been stated and repeated at both the federal and Provincial level. The Feds have now entered their “we don’t care how it looks” era and I’m sure that loan money could be discharged even before CCAA in exchange for some board seats or other concessions for the soon to be unemployed MPs.
If the LEEFF is discharged the stock price would immediately X5. They value of the governments shares would increase, the value of the friend of the governments shares would increase.

Those were the most note worthy, but the low cost/travel carriers also received low/no restriction loans. Vueling, Transvania, Ryan Air, Jet2 Holidays all got a hand up, it just didn’t make the media like $10 billion for Air France.

Spirit Airlines - $330 million
Jet Blue - $1.14 billion
Frontier - $594 million

For those in the thread worried about “taxpayer money” .. you may wanna brush up on the current Liberal SDTC scandal. Hundreds of millions, if not billions of dollars funnelled to trillion dollar companies (like Pratt&Whitney) who didn’t even qualify for the money.

I stand by my comments … Canada is a fucking joke of a country!