AC and TRZ Agree to Terminate Arrangement

[TFTMB heavy]

AC is obviously trying to examine the balance sheet that it is accepting responsibility for at TRZ. It won’t be the one contemplated in the original purchase agreement. It won’t be the one contemplated by the revised purchase agreement either.

AC will want to see what Federal financial aid will be made available and on what terms. And obviously to consider how the ‘conditions’ of the CDN and EU approvals will affect revenues and competition in the post-COVID world.

AC can live without TRZ. The question is whether it wants to.

Well said. I think it's smart to not paint themselves into a corner until all the chips have fallen. The only problem with that is that it leaves the door open for other parties, this is a high level game of chicken and to make it worse governments are involved.

[tailgunner]

Indeed, it is heavily laden with political influence.
With the conditions placed on the AC buyout of AT now public, I think that there will be NO other suitors for AT besides the Videotron guy. If one was hoping that ONEX will swoop in and save AT after AC walks, I think that is highly unlikely. ONEX will not agree to any of the conditions that were placed on AC. The costs to ONEX would be staggering as they have would to AC. Because of the political based conditions, I believe it’s AC or bust for AT.

[columbia]

Indeed, it is heavily laden with political influence.
With the conditions placed on the AC buyout of AT now public, I think that there will be NO other suitors for AT besides the Videotron guy. If one was hoping that ONEX will swoop in and save AT after AC walks, I think that is highly unlikely. ONEX will not agree to any of the conditions that were placed on AC. The costs to ONEX would be staggering as they have would to AC. Because of the political based conditions, I believe it’s AC or bust for AT.

Onex wouldn’t have the same restrictions at all, especially regarding slots surrender and etc. Anyhow, the government won’t let TRZ die, maybe the deal falls, aviation comes back up and TS get bought up later on by either Onex or AC then, who the hell knows. Let’s just watch our autopilots do the flying, extend and retract the gears and let the business people take care of the business.

[Fanblade]

AC can live without TRZ. The question is whether it wants to.

I think AC has already answered that question. AC still wants Transat. It’s pretty clear to me at least.

Although some suggest the conditions from the government are onerous, I didn’t here one complaint from AC when the approval was released. Then an outside date passed, and yes AC elevated the game of chicken, but they didn’t walk.

In my mind AC has been pretty focused on Transat. They have had exits opened to them but never used them. You don’t get this far into a global crisis, and keep up that focus, without being determined.

Yes AC will want a better deal from Transat. Yes AC will try to take the acquisition and use it to promote government aid. Yes the EU needs to come out with their determination. And so yes this 4 way game of chicken will continue.

But AC looks pretty laser focussed to me.

[altiplano]

AC can live without TRZ. The question is whether it wants to.

I think AC has already answered that question. AC still wants Transat. It’s pretty clear to me at least.

Although some suggest the conditions from the government are onerous, I didn’t here one complaint from AC when the approval was released. Then an outside date passed, and yes AC elevated the game of chicken, but they didn’t walk.

In my mind AC has been pretty focused on Transat. They have had exits opened to them but never used them. You don’t get this far into a global crisis, and keep up that focus, without being determined.

Yes AC will want a better deal from Transat. Yes AC will try to take the acquisition and use it to promote government aid. Yes the EU needs to come out with their determination. And so yes this 4 way game of chicken will continue.

But AC looks pretty laser focussed to me.

I didn’t here one complaint from AC

They didn't say anything at all.

I think at this point they could take it or leave it.

They expected the slot surrender, but I doubt they are happy with the government terms dictating business decisions job locations, brand futures,maintenance contracts, and similar.

They are still under the shadow of the ACPPA after all these years and have managed to get a couple limbs freed up, do they want to get under a new restrictive set of conditions again? There is no question it sinks their competitiveness and the C-suite take great pride in it's ability to be nimble. You hear it from them every investor call, every employee update. Mike Rousseau in particular has had a significant hand in that, reorganizing things from own/lease ratios to labour to contractor agreements in order to be responsive to events.

Also projections have changed since even the last $5/share agreement, let alone 2019. Going forward into more uncertainty than ever before in this industry, they will watch how things play out before they blink.

If they were worried about PKP purchasing TRZ and they were focused on wanting it they would have extended. To me that means they either don't believe PKP can submit a financed offer, or they are good either way and will make more hay and leverage whatever and whomever they can.

If they say something they give you some of that leverage.

[TFTMB heavy]

AC can live without TRZ. The question is whether it wants to.

I think AC has already answered that question. AC still wants Transat. It’s pretty clear to me at least.

Although some suggest the conditions from the government are onerous, I didn’t here one complaint from AC when the approval was released. Then an outside date passed, and yes AC elevated the game of chicken, but they didn’t walk.

In my mind AC has been pretty focused on Transat. They have had exits opened to them but never used them. You don’t get this far into a global crisis, and keep up that focus, without being determined.

Yes AC will want a better deal from Transat. Yes AC will try to take the acquisition and use it to promote government aid. Yes the EU needs to come out with their determination. And so yes this 4 way game of chicken will continue.

But AC looks pretty laser focussed to me.

I didn’t here one complaint from AC

They didn't say anything at all.

I think at this point they could take it or leave it.

They expected the slot surrender, but I doubt they are happy with the government terms dictating business decisions job locations, brand futures,maintenance contracts, and similar.

They are still under the shadow of the ACPPA after all these years and have managed to get a couple limbs freed up, do they want to get under a new restrictive set of conditions again? There is no question it sinks their competitiveness and the C-suite take great pride in it's ability to be nimble. You hear it from them every investor call, every employee update. Mike Rousseau in particular has had a significant hand in that, reorganizing things from own/lease ratios to labour to contractor agreements in order to be responsive to events.

Also projections have changed since even the last $5/share agreement, let alone 2019. Going forward into more uncertainty than ever before in this industry, they will watch how things play out before they blink.

If they were worried about PKP purchasing TRZ and they were focused on wanting it they would have extended. To me that means they either don't believe PKP can submit a financed offer, or they are good either way and will make more hay and leverage whatever and whomever they can.

If they say something they give you some of that leverage.

Apparently the 1500 jobs was a big hurdle in negotiating the deal with the feds. The maintenance jobs seems like payback for another maintenance deal that went sour a while ago...

[altiplano]

Feds have no business specifying where a private business bases it's employees in this country. Calgary, Montreal... what's the difference? Canadian jobs. Strong Canadian business. That's what matters.

I don't think there was much negotiation here...

I also don't think AC has any interest in starting large scale heavy maintenance in Montreal again as is dictated by the feds here. Aveos was so slow, and so expensive. That's why it was bled out, not some conspiracy to kill jobs...

But when you're that bloated and slow what choice does an organization trying to compete have? Utilization rate is so important in this business and when you can fly an airframe half way around the world and back and still get the job done significantly quicker and cheaper than you can at home what can you do? It's what your competitors are all doing.

Now Aveos 2.0? I don't think AC is thrilled.

[flyinhigh]

I'd agree. I'm sure that AC and TS knew what was coming down the pipe with the approval, but for a government to say you have to enter into a maintenance agreement with this company and be based in Quebec. How the hell is that NOT another ethics violation?

If I was a premier somewhere else, I'd be all over this to fight for those jobs in my province.

[Loon-A-Tic]

This is rapidly becoming a "Leave it to Beaver" deal or in this case "Leave it to PKP" and see how it plays out, that should be interesting to watch unfold.

[fish4life]

I echo the Quebec love being ridiculous in this deal, the competition bureau is supposed to look and analyze if it’s an issue of competition not what province the new company has jobs in. There is a zero percent chance that if air Canada bought WestJet the government would require that WestJet left jobs in Alberta.

[tsgas]

I echo the Quebec love being ridiculous in this deal, the competition bureau is supposed to look and analyze if it’s an issue of competition not what province the new company has jobs in. There is a zero percent chance that if air Canada bought WestJet the government would require that WestJet left jobs in Alberta.

That's because Justine isn't an Albertian.

[dhc#]

I echo the Quebec love being ridiculous in this deal, the competition bureau is supposed to look and analyze if it’s an issue of competition not what province the new company has jobs in. There is a zero percent chance that if air Canada bought WestJet the government would require that WestJet left jobs in Alberta.

That's because Justine isn't an Albertian.

That's right....he's Cuban

[Cappo1]

I echo the Quebec love being ridiculous in this deal, the competition bureau is supposed to look and analyze if it’s an issue of competition not what province the new company has jobs in. There is a zero percent chance that if air Canada bought WestJet the government would require that WestJet left jobs in Alberta.

That's because Justine isn't an Albertian.

That's right....he's Cuban

Best one

[Cappo1]

Good, then let this be Quebec’s problem. As for Air Canada they, nor the rest of the country, care about the influence of the premier of Quebec.
Why not just go with Peladeau’s offer then? It’s quebec-centric and the premier says he won’t let anything bad happen to Transat so there is no risk.
AC is giving him the chance to put his money where his mouth is, by not extending the deal they are letting him have it. Or if not prepare for another drastically reduced offer from AC.

Or if Transat is as well positioned as some claim and have unlimited government backing, why not just go it alone?

blablabla we know you don't wanna lose some seniority but clearly AC has bigger plans than your seniority. Look around you, it's a market of consolidation. Air France, KLM, Delta, United etc, have all expanded their operations by BUYING other airlines. This is why AC wanted to get transat. Do they still wanna buy TS, who knows but the tourism industry will likely takeoff sooner and stronger than business traveling. Furthermore, the transat board believes AC is a better move than Peledeau so stop asking why transat doesn't take Peladeau's offer.

AC expanded their operation through consolidation once, it turned into a 10 year protracted downturn where buying a bad debt laden company dragged AC into bankruptcy. Calin Rovenescue said himself “if you eat a sick animal you get sick”

Yup . A lot of these whippersnappers don't remember that . They were in diapers . It took decades for the last acquisition to succeed and that was without a pandemic . The Ts issue is political. Let Quebec, Pladeau or whoever else wants them have em . They keep reminding us how superior their Leisure sector is. Anyone can do that if they have the right team. Canada is a massive country and AC has too many pilots, backend etc. out of jobs . We can manage just fine with our current fleet and crews from Main and Rouge. Transat is better off staying PQ. Problem solved . Pladeau gets an airline that's focused on Quebec. They have a product that does well and the only thing that will change is who signs the payroll. Win win.

[tsgas]

blablabla we know you don't wanna lose some seniority but clearly AC has bigger plans than your seniority. Look around you, it's a market of consolidation. Air France, KLM, Delta, United etc, have all expanded their operations by BUYING other airlines. This is why AC wanted to get transat. Do they still wanna buy TS, who knows but the tourism industry will likely takeoff sooner and stronger than business traveling. Furthermore, the transat board believes AC is a better move than Peledeau so stop asking why transat doesn't take Peladeau's offer.

AC expanded their operation through consolidation once, it turned into a 10 year protracted downturn where buying a bad debt laden company dragged AC into bankruptcy. Calin Rovenescue said himself “if you eat a sick animal you get sick”

Yup . A lot of these whippersnappers don't remember that . They were in diapers . It took decades for the last acquisition to succeed and that was without a pandemic . The Ts issue is political. Let Quebec, Pladeau or whoever else wants them have em . They keep reminding us how superior their Leisure sector is. Anyone can do that if they have the right team. Canada is a massive country and AC has too many pilots, backend etc. out of jobs . We can manage just fine with our current fleet and crews from Main and Rouge. Transat is better off staying PQ. Problem solved . Pladeau gets an airline that's focused on Quebec. They have a product that does well and the only thing that will change is who signs the payroll. Win win.

Let them merge with Nolinor. The Prud'homme's know how to run a profitable operation.

[Just another canuck]

…

[Localizer]

Oh .. the children are back! Oh joy!

[mbav8r]

I've paid very little attention over the past months. Working elsewhere so I'm good. I didn't want the merger. Transat was a better place to work. Period. But the writing was on the wall so I did want the merger for job security. Nothing else. If it happens, it happens. If not, so be it. But if it does, I'll spend the next 30 years laughing my way into the cockpit telling every AC guy how much better Transat was and how I'd rather still be there just to watch your big red heads explode. I wonder how long I could get away with a blue star on my flight bag?

No back tracking now

[TFTMB heavy]

11. Maintenance in Canada
Within one year following Closing, Air Canada shall negotiate, in good faith, and agree to enter into the agreements contemplated in the letter of intent between Air Canada and Avianor dated September 10, 2019 and the letter of intent between Air Canada and AAR dated February 17, 2020, regarding the construction and operation of facilities in the Province of Quebec for all airframe overhaul maintenance for all Air Canada and Air Canada Party Airbus A330, A320 family and A220 aircraft, providing that airframe overhaul maintenance shall, subject to the terms of the agreements to be entered into and consistent with the provisions of this paragraph 11, commence within four years after Closing. In particular, Air Canada shall provide its available volumes of A330, A320 and A220 airframe overhaul maintenance to support the construction and operation of A330 and A220 airframe overhaul maintenance facilities in Québec by Avianor and AAR; it being understood, however, that the decision of the independent suppliers to construct such facilities will be made based on, among other considerations, commercially reasonable volume projections, which will themselves be heavily dependent on when the Canadian airline industry is no longer substantially affected by the COVID-19 pandemic.

Looks like some things were already in motion with two letters of intent. Anyone have some insight on those two deals?

[altiplano]

I've paid very little attention over the past months. Working elsewhere so I'm good. I didn't want the merger. Transat was a better place to work. Period. But the writing was on the wall so I did want the merger for job security. Nothing else. If it happens, it happens. If not, so be it. But if it does, I'll spend the next 30 years laughing my way into the cockpit telling every AC guy how much better Transat was and how I'd rather still be there just to watch your big red heads explode. I wonder how long I could get away with a blue star on my flight bag?

You'll be lucky if it works out. But show up here with the grand plan of being ignorant for the next 30 years? And you call me an asshole!

You didn't want a merger?

You were crying about families and the livelihoods of thousands of other people less than a year ago...

Or what? Now the writing was on the wall... but it was "better" there...

And 30 years? You still have 30 years? Good for you whatever happens. But you're a baby. And you don't have any idea how good it is here - despite all the bullshit, the constant defense from the top and bottom, despite all the representational fuckups, despite how much better it could be...