Was reading that Air Transat are looking at new aircraft. Nothing corroborated, but I did read they are looking at either B777-200ERs or A350-900s to replace their current fleet. Could be just a rumour although they do have some money to spend.
Transat A.T. working on new business plan for spending excess cash
08:44 PM EDT Jun 06
ALLAN SWIFT
MONTREAL (CP) - Travel company Transat A.T. Inc. will have a new business plan by this fall that will include what to do with its excess cash, chief executive Jean-Marc Eustache told the company's annual meeting Wednesday.
The plan will provide a strategic outlook for three to five years for the integrated travel company, Eustache said.
Transat's liquidity - currently some $320 million and growing - has become almost an embarrassment to the company, as management continues to put off a decision on how best to use it.
Some investors are calling for a share buyback or a large dividend payout to shareholders.
Eustache said it is prudent for a travel company to keep cash on hand, to deal with crises like the Sept. 11, 2001, terrorist acts that devastated the industry and forced Transat to cut back operations suddenly.
Transat's subsidiaries include a tour operators, travel agencies and Air Transat, a major chartered airline. The company operates in Canada, France and the United Kingdom and flies to other countries around the world.
Transat is also scouting the United States for an acquisition that could use up part of the cash, Eustache said.
"It's true we have cash, and we'll generate more this year," Eustache said in response to a question at the meeting.
He said the board - of which he is chairman - met Wednesday and gave Transat's management until the fall to come up with a new strategy for how to spend or invest the reserves.
Besides its plans for growth abroad, Transat wants to become the travel market leader in Ontario, which accounts for half the Canadian market.
Transat currently has 20 per cent of the Ontario travel market, second after Sunquest Vacations, a division of MyTravel Group of Britain, while Transat is the largest player in the other three regions - the West, Quebec and the Maritimes.
Eustache said he wants to grow Transat's share in Ontario to 35 per cent to become market leader and to be able to improve margins.
"Once we're the leader we'll get the profit margins we have in the other three markets," he said.
Eustache said the growth will come by adding new Caribbean destinations and other Ontario markets such as Hamilton.
Even if an Ontario travel company were for sale, Eustache said it would add other aircraft types to its fleet at Air Transat, making it less efficient. Air Transat has 14 aircraft composed of two similar models, Airbus A330s and A310s.
Analyst Christian Godin of Montrustco Bolton said he was happy that Transat bought back some shares this month to soak up cash.
Godin also said he is satisfied with management's decision to become market leader in Ontario, by growth rather than acquisition.
"The Ontario market was always a bit chaotic," Godin said. "If they can get it to become more disciplined, things will go better."
Transat stock (TSX:TRZ.B was off 49 cents at $23.26 Wednesday.[/b]
New planes for Air Transat...
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Panama Jack
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wallypilot
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What they feel is wrong is that $320 million is sitting in a bank account making 2.5%, rather than generating 10%-20% in some sort of other vehicle, like reinvesting in the company, or buying another. When you have all this cash sitting around, you have to see it as losing money, because they are losing the 7.5% return by not investing it. That is poor resource management for a board that has the directive to maximize shareholder return. That is why they mentioned the issue as almost a source of embarassment.
Yeah, like WJ stock or Jetsgo stock or Old Air Canada stock, or even enron, nortel and Bre-X.. Lol...wallypilot wrote:bank account making 2.5%, rather than generating 10%-20% in some sort of other vehicle, .
Investing is just like going to the casino, it's not a sure thing...
And it doesn't specify if it's in "the bank" good GICs can pay 5%.. So, yeah, they should buy an A380 dump all their cash and not generate any income on it for the next 4 years and continue to lose money on it after they have it...
You're not very skilled in Finance, are you?!cyyz wrote:Yeah, like WJ stock or Jetsgo stock or Old Air Canada stock, or even enron, nortel and Bre-X.. Lol...wallypilot wrote:bank account making 2.5%, rather than generating 10%-20% in some sort of other vehicle, .
Investing is just like going to the casino, it's not a sure thing...
And it doesn't specify if it's in "the bank" good GICs can pay 5%.. So, yeah, they should buy an A380 dump all their cash and not generate any income on it for the next 4 years and continue to lose money on it after they have it...
In the business world, the rearview mirror is always clearer than the windshield...W. Buffett
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wallypilot
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cyyz, i don't think i would ever want you running my business, buying into crap like that! 
(i realise you are being sarcastic).
the cash could be used for many things. Transat as an operation makes good money, even if the airline operations make slim profits. From what I understand, they have travel agencies and tour operators in addition to the airline. So investing in something else doesnt mean just airplanes. and if they do buy airplanes, then they will be able to increase profits in their travel agency and their tour operation.
and fyi, short term cashable GIC rates ( which is what we are talking about when the co says it has cash on hand) are in the neighbourhood of 1.85%-2.5%. Less income tax, and we are talking almost no profit on that $320 million. I would wager a bet that transat as an organisation makes way better profit that 2%. they didn't build up $320 million in cash without making decent profit margins!
(i realise you are being sarcastic).the cash could be used for many things. Transat as an operation makes good money, even if the airline operations make slim profits. From what I understand, they have travel agencies and tour operators in addition to the airline. So investing in something else doesnt mean just airplanes. and if they do buy airplanes, then they will be able to increase profits in their travel agency and their tour operation.
and fyi, short term cashable GIC rates ( which is what we are talking about when the co says it has cash on hand) are in the neighbourhood of 1.85%-2.5%. Less income tax, and we are talking almost no profit on that $320 million. I would wager a bet that transat as an organisation makes way better profit that 2%. they didn't build up $320 million in cash without making decent profit margins!
cyyz wrote:I'm in the 90's type of finance, eat somewhere and sue, buy something and sue.. You know... The get rich quick schemes. =)Yoyoma wrote:
You're not very skilled in Finance, are you?!
or my favorite,
"From my 1 bedroom apartment..."
You just made my week, thank you cyyz!!! In the business world, the rearview mirror is always clearer than the windshield...W. Buffett
