Transat got a sweet deal

[safetyfirst123]

Sweet deal for Transat! The government now owns 19.9% with $380 million in debt forgiven, with government loans restructured with no interest for the first five years. At least now they only owe $1.5 Billion instead of $1.9 Billion.

For the record I think Transat has built a fantastic brand, and the people there are great, but I would have rather seen a more level playing field for the industry overall.

https://www.bnnbloomberg.ca/investing/2 ... emic-debt/

[Jean-Pierre]

Vive le Québec libre!

[Inverted2]

Usually when the government gives bailout money it’s not a good thing. Think battery factories.

[DanWEC]

Not exactly related. This is a restructure of the covid-era shutdown "support" the Trudeau gov't provided, and was critically strangling the balance sheet. Not that I'm not happy they came to their senses and gave some relief, but relief from literal loan shark, double-digit interest terms is really just moving to what it should have been all along; aligning with the level of domestic infrastructure support every other G7 country except Canada gave.

[fish4life]

Not exactly related. This is a restructure of the covid-era shutdown "support" the Trudeau gov't provided, and was critically strangling the balance sheet. Not that I'm not happy they came to their senses and gave some relief, but relief from literal loan shark, double-digit interest terms is really just moving to what it should have been all along; aligning with the level of domestic infrastructure support every other G7 country except Canada gave.

I disagree, AT should have been required to go to the private sector for debt. We are well past Covid and other airlines have been able to pay back their government loans.

[DanWEC]

Different scenarios. AC is a much larger company who could continue domestic operations wheras TRZ was mandated to completely shut down by virtue of their international route structure and Canada's world-trailing shutdown recovery. SWG was the only recipient in a similar environment, but they have a much smaller operational structure and also no details of their finances regarding the debt facility, being a private company.
Relatively, TRZ was the biggest that got hit the hardest.

[safetyfirst123]

Regardless, Transat got far more than any of the other airlines, and that's not a fair playing field. Having said so, I can't imagine their current debt levels being sustainable either.

Watch Transat suddenly place a much needed wide body order thanks to their new ownership structure.

[safetyfirst123]

I also find it interesting how quiet this subject has been. There is hardly any news about this, and no commentary from other airline CEO's. When the Trudeau Liberals gave Bombardier a $372.5 million repayable loan, it was all over the news. Transat gets $380 million in debt taken off its balance sheet, and not a whisper.

[Daniel Cooper]

I also find it interesting how quiet this subject has been. There is hardly any news about this, and no commentary from other airline CEO's. When the Trudeau Liberals gave Bombardier a $372.5 million repayable loan, it was all over the news. Transat gets $380 million in debt taken off its balance sheet, and not a whisper.

Because they're doing everything they can to keep Albertans from figuring out how badly they are getting screwed.

[DanWEC]

I also find it interesting how quiet this subject has been. There is hardly any news about this, and no commentary from other airline CEO's. When the Trudeau Liberals gave Bombardier a $372.5 million repayable loan, it was all over the news. Transat gets $380 million in debt taken off its balance sheet, and not a whisper.

Personally, I believe the two are very different scenarios with polar opposite reasons. BBD was failing by it's own management and execution. Bloated structure, family politics, poor decisions, infighting, etc. It was a sinking ship of it's own accord. Even after the bailout they still had major issues with the family, requiring them to be booted entirely. It's really unfortunate, because it left them high and dry years later when they just needed a bit of help to finish the C-Series, but they were already a financial persona non grata. I still shake my head thinking how we lost what should have been a major Canadian airframe, especially at a time where we desperately need domestic production of any kind.

On the other hand, TRZ was fine up until they were ordered to shut down, and fine after. It was the escalating interest on the loan itself that was making ongoing operations materially difficult. Not so much a too-big-to-fail handout to a spiraling company like it was to BBD. So, I don't think that carries the same judgement.

[Dias]

Imagine how the Lynx Air people from Calgary feel right now.

[cdnavater]

Imagine how the Lynx Air people from Calgary feel right now.

I imagine Flair wouldn’t mind some restructuring of their loan shark level interest loans

[boeingboy]

Imagine how the Lynx Air people from Calgary feel right now.

I imagine Flair wouldn’t mind some restructuring of their loan shark level interest loans

Except that Flair and Lynx did it to themselves - WITH private equity.

[safetyfirst123]

I also find it interesting how quiet this subject has been. There is hardly any news about this, and no commentary from other airline CEO's. When the Trudeau Liberals gave Bombardier a $372.5 million repayable loan, it was all over the news. Transat gets $380 million in debt taken off its balance sheet, and not a whisper.

Personally, I believe the two are very different scenarios with polar opposite reasons. BBD was failing by it's own management and execution. Bloated structure, family politics, poor decisions, infighting, etc. It was a sinking ship of it's own accord. Even after the bailout they still had major issues with the family, requiring them to be booted entirely. It's really unfortunate, because it left them high and dry years later when they just needed a bit of help to finish the C-Series, but they were already a financial persona non grata. I still shake my head thinking how we lost what should have been a major Canadian airframe, especially at a time where we desperately need domestic production of any kind.

On the other hand, TRZ was fine up until they were ordered to shut down, and fine after. It was the escalating interest on the loan itself that was making ongoing operations materially difficult. Not so much a too-big-to-fail handout to a spiraling company like it was to BBD. So, I don't think that carries the same judgement.

I'm not sure I agree with the assessment. Transat has been piling on the debt for a long time. $380 million forgiven loan is a huge deal for the other companies that had to deal with the same deal during Covid. $1.9 billion is a massive amount of debt for a company the size of Transat to carry. I really do believe they've built a great brand with an honest product, but the government loans were icing on the cake to be honest.

[DanWEC]

Before the shutdown order TRZ had zero debt and over $500m in liquid cash. Plus the $18 per share takeover bid from AC. It was the govt's own disproportionately long and detrimental response to Covid that dug this huge hole in the first place.

As a note, that $1.5b figure includes lease liabilities, etc. It's not standing debt owing. There was some recent article that published that figure, but it's not really an appropriate metric. The Q2 2025 report will be out tomorrow with all of that. I'm curious to see when the new analyst target prices start coming out in a few weeks as well.

[rookiepilot]

Before the shutdown order TRZ had zero debt and over $500m in liquid cash. Plus the $18 per share takeover bid from AC. It was the govt's own disproportionately long and detrimental response to Covid that dug this huge hole in the first place.

As a note, that $1.5b figure includes lease liabilities, etc. It's not standing debt owing. There was some recent article that published that figure, but it's not really an appropriate metric. The Q2 2025 report will be out tomorrow with all of that. I'm curious to see when the new analyst target prices start coming out in a few weeks as well.

Thousands of (non-Quebec based, cough cough) small businesses were in fine shape before Covid hit and ordered them to close (leaving big box stores open)

Now countless small businesses have closed.

Where's their bailout?

Everyone or no one.

[DanWEC]

Do you mean the 900,000 CEBA loans given to small and medium businesses? Of which so far over $12B of the $40B has been forgiven, with more to come?

Besides that, I agree, the shortsighted and incompetently implemented shutdown measures that disproportionately hit small businesses were just swell. Cabinet ministers at their finest.

[slob driver]

Before the shutdown order TRZ had zero debt and over $500m in liquid cash. Plus the $18 per share takeover bid from AC. It was the govt's own disproportionately long and detrimental response to Covid that dug this huge hole in the first place.

As a note, that $1.5b figure includes lease liabilities, etc. It's not standing debt owing. There was some recent article that published that figure, but it's not really an appropriate metric. The Q2 2025 report will be out tomorrow with all of that. I'm curious to see when the new analyst target prices start coming out in a few weeks as well.

Before I begin, I’d like to say that I have always been a fan of Air Transat. I’ve flown on your airline many times. Have always had a pleasant experience. As well, I have done union work side by side with the Transat MEC and have found your pilot group to be fantastic.
Taking all of the above into account, your comment about zero debt made me take a look at the TRZ 2019 financial statements. While it is mentioned on one line that there was no long-term debt, they did in fact have total debt of a little over $700 million dollars (associated mainly with aircraft leases it seems). One can assume the difference in reporting is ifrs versus non-ifrs. But there was still debt on the books as later on the corp gives a net debt figure after taking cash and cash equivalents into account. While we can argue the definition of “debt” in terms of a relevant financial metric, I would say that aircraft financing is debt that puts financial stress on one side of a ledger.
As a WestJet pilot, I recognize that your payrates are set by where you are in the bargaining cycle. With WJ’s going first in the pattern, and then AC setting the bar higher, I fully expect your group will do well with the bargaining that is just around the corner. I have zero idea why fellow pilots continue to throw stones at their fellow professionals. I trust they’re volunteering for association positions at their properties (if they’re even pilots).
Look forward to the financials tomorrow. Pleased that you all will live to fight another day.

[rookiepilot]

Do you mean the 900,000 CEBA loans given to small and medium businesses? Of which so far over $12B of the $40B has been forgiven, with more to come?

The bigger question is why I bother responding to people who troll my posts with false equivalence.

AI Overview
In 2023, small businesses in Canada employed 5.8 million individuals, representing 46.5% of the total private sector workforce. Small businesses, defined as those with 1 to 99 employees, are a significant part of the Canadian economy, contributing to both job creation and economic growth.

AI Overview
In October 2023, Transat and its subsidiaries had approximately 5,037 active employees, with 4,582 located in Canada, according to Transat's annual notice.

Lets do the math. AT had 380 million forgiven into 5037 employees = $75,000 an employee.

Cnd SB have had 12 billion (according to you, fine) forgiven into 5.8 million workers. = $2070 per employee.

AT got 36 times as much per employee as Canadian small businesses.

Stop wasting everyone’s time.

[boeingboy]

Do you mean the 900,000 CEBA loans given to small and medium businesses? Of which so far over $12B of the $40B has been forgiven, with more to come?

The bigger question is why I bother responding to people who troll my posts with false equivalence.

AI Overview
In 2023, small businesses in Canada employed 5.8 million individuals, representing 46.5% of the total private sector workforce. Small businesses, defined as those with 1 to 99 employees, are a significant part of the Canadian economy, contributing to both job creation and economic growth.

AI Overview
In October 2023, Transat and its subsidiaries had approximately 5,037 active employees, with 4,582 located in Canada, according to Transat's annual notice.

Lets do the math. AT had 380 million forgiven into 5037 employees = $75,000 an employee.

Cnd SB have had 12 billion (according to you, fine) forgiven into 5.8 million workers. = $2070 per employee.

AT got 36 times as much per employee as Canadian small businesses.

Stop wasting everyone’s time.

Oh....give me a break.

So If the government gave small businesses a windfall of free cash (meaning - in excess of their loan) - you'd be bitchin about that something fierce. Loans were given and forgiven Who cares how big it was.

[rookiepilot]

Do you mean the 900,000 CEBA loans given to small and medium businesses? Of which so far over $12B of the $40B has been forgiven, with more to come?

The bigger question is why I bother responding to people who troll my posts with false equivalence.

AI Overview
In 2023, small businesses in Canada employed 5.8 million individuals, representing 46.5% of the total private sector workforce. Small businesses, defined as those with 1 to 99 employees, are a significant part of the Canadian economy, contributing to both job creation and economic growth.

AI Overview
In October 2023, Transat and its subsidiaries had approximately 5,037 active employees, with 4,582 located in Canada, according to Transat's annual notice.

Lets do the math. AT had 380 million forgiven into 5037 employees = $75,000 an employee.

Cnd SB have had 12 billion (according to you, fine) forgiven into 5.8 million workers. = $2070 per employee.

AT got 36 times as much per employee as Canadian small businesses.

Stop wasting everyone’s time.

Oh....give me a break.

So If the government gave small businesses a windfall of free cash (meaning - in excess of their loan) - you'd be bitchin about that something fierce. Loans were given and forgiven Who cares how big it was.

Actually I would be happy.

Airlines are big businesses. They can take care of themselves. I would have advocated no money for any large businesses of any kind, and more for small businesses that employ 6 million hard working Canadians.

Read this. Bit dated but its what came up on google.

https://www.cfib-fcei.ca/en/research-ec ... businesses

As small businesses mark their second anniversary of COVID-19, sales remain low, debt remains high, and many are considering permanent closure.

Two years into the pandemic, small businesses are a long way from recovery. While it is good news that COVID-19 restrictions are being lifted across Canada, the economic damage done by the pandemic has been massive and is leaving many in a precarious position. Until more businesses can get back to making normal sales, their capacity to face new costs, repay debt and, in many cases, simply keep their business running, remains significantly reduced.

As we enter the recovery phase, governments need to hold off on any cost increases to businesses, given the latest data shows that nationally:

Only 35% of businesses have returned to normal sales
Two in three (67%) report taking on pandemic-related debt, at an average of $158,128 per business
One in seven (14%) are actively considering bankruptcy or permanently winding down their business


Bit newer.
https://torontosun.com/news/national/pa ... deral-data

Federal data showed that the COVID-19 pandemic and subsequent lockdowns led to more than 120,000 small and medium-sized businesses closing in Canada, according to Blacklock’s Reporter.

But one Quebec based airline is worth more than 100,000 small businesses and their employees.

[DanWEC]

Tldr; Rookie went off casting aspersions yet again, no point in replying.

Slob Driver, thanks for the insight. The differences between standard and non-standard gets a bit esoteric for me, so I really dont know specifically how it applies. But accounting certainly has its fair share of latitude it seems. Last year I saw net operating profit grow, yet debt increased as well. I guess it depends how they want to allocate.
Hopefully looking forward to a long and stable career here. It's a great place to work. Though I have a nagging feeling we may be transmorgified into wearing a different hat within 5 years.

Cheers,
D

[rookiepilot]

Tldr; Rookie went off casting aspersions yet again, no point in replying.

Only Unionized Airline Employees are qualified to respond to any and all AvCanada threads, even when the subject matter is way out of their lane.

Just rename it “Airline Workers of the World Unite” site.

Cause thats the extent of any analysis here.

[fish4life]

Porter was shut down yet didn’t get a bid debt forgiveness
AC has 100WB’s flying internationally yet didn’t get debt forgiveness
WJ never took any government debt let alone get debt forgiveness.

Covid was hardly a Transat problem and I fail to see how it’s in any way fair to the investors of the other airlines that AT gets free money.

[rookiepilot]

Hopefully looking forward to a long and stable career here. It's a great place to work.

So you make poorly thought out intellectual arguments….purely cause you work there. I should have picked that up faster.

Home-gamer. Nothing more. It’s your team. Defend to the death. Lotta intellectual depth displayed here.

What happens if you change employers? Come back to this thread and revise all the comments?