Transat AT seeking additional government funding after reporting $114.3M Q1 loss

[777Aviate]

https://news.paxeditions.com/news/airli ... 3m-q1-loss

[Sharklasers]

The government needs to write off the LEEFF loans immediately. The interest alone against Transats 800 million (so far) draw is far higher than the profit of Transat pre pandemic. If by magic the industry returns to its second golden age of 2019 tomorrow Transat would not be able to make the minimum payment on that debt.

There can be no assurance that financial institutions, suppliers, lessors, credit card processors and other creditors will continue to support the Corporation. The COVID-19 pandemic significantly strained the Corporation’s ability to return to profitability. As a result, there can be no assurance that the Corporation will be able to generate positive cash flows from operating activities in the next twelve months.
The situation indicates material uncertainty casting significant doubt on the Corporation’s ability to continue as a going concern and, thereby, realize its assets and repay its debt in its normal course of business.

https://www.transat.com/getmedia/edd949 ... t.pdf.aspx

[altiplano]

The Quebec government will come through.

[Sharklasers]

The Quebec government will come through.

There will need to be a long term solution besides more government debt. A forced marriage between TRZ and AC ala AC/CND wouldn’t surprise me at all right now. It was widely believed that was Mike’s baby anyway.

[WellThatAgedWell]

Government bailouts for select private businesses? No thanks.

Let their stock tank and someone can buy/merge with them. Taxpayers should not be on the hook, let the share holders have their shares burn away.

[DanWEC]

The government's ongoing travel restriction is what's depressing Transat. As one of the only remaining countries with actual entry testing (Not just vaccine records) the Federal government should bear some accountabity for the damage done by their unilateral and poorly inplemented decisions.

[Latitude]

The Quebec government will come through.

There will need to be a long term solution besides more government debt. A forced marriage between TRZ and AC ala AC/CND wouldn’t surprise me at all right now. It was widely believed that was Mike’s baby anyway.

If WS acquisition of SW goes as planned, might very well be what's going to happen...

Either way, that 800m$ will be written off. Wait and see

[Sharklasers]

The Quebec government will come through.

There will need to be a long term solution besides more government debt. A forced marriage between TRZ and AC ala AC/CND wouldn’t surprise me at all right now. It was widely believed that was Mike’s baby anyway.

If WS acquisition of SW goes as planned, might very well be what's going to happen...

Either way, that 800m$ will be written off. Wait and see

Whatever’s going to happen will need to happen in the next couple quarters, Transat will need some cash to carry them through a restructuring if they head that way, they can’t wait until the bank account hits 0 dollars before pulling that trigger.

I don’t think you’d hear any complaints from the AC employee groups if they set up a merger TWA-AA style when AA purchased TWA in receivership with the expressed understanding from the TWA employees that in order to preserve their jobs the AA unions would be able to organize the merged lists as they see fit, not BOTL but an order that recognized the unique financial situation. AC will need the pilots as on the latest bid the NB left seat has fallen to 4 years again and there are rumours of growth.

[WellThatAgedWell]

The government's ongoing travel restriction is what's depressing Transat. As one of the only remaining countries with actual entry testing (Not just vaccine records) the Federal government should bear some accountabity for the damage done by their unilateral and poorly inplemented decisions.

Who are these tax payers that want to pay for this safety net that the federal government has set up? Do we just keep bailing out companies and at the same time make rules that will cause them to fail?

Why do we have any restrictions at all at this point? What is the benefit? Lots of people freaking out that kids will be maskless after March break. They say it’s a huge risk because families might travel across borders for vacation. Are these people retards? Seriously, since when did Covid give a shit what borders are crossed. You cross a border when you go between provinces, you cross a border when you leave your municipality, you cross a border when you enter a store, a hospital or a school. You cross a border when you enter your own home as far as Covid is concerned. Never mind that masks are not an effective mitigation of Covid spread. Even if masks were effective, what the hell does Covid testing at certain “borders” do for public health. Why not say Walmart is the defined border and mandatory Covid test every customer there.

For two years we have been pretending government policy is risk management, turns out it was just an IQ test and Canadians failed.

[Sharklasers]

The government's ongoing travel restriction is what's depressing Transat. As one of the only remaining countries with actual entry testing (Not just vaccine records) the Federal government should bear some accountabity for the damage done by their unilateral and poorly inplemented decisions.

Who are these tax payers that want to pay for this safety net that the federal government has set up? Do we just keep bailing out companies and at the same time make rules that will cause them to fail?

Why do we have any restrictions at all at this point? What is the benefit? Lots of people freaking out that kids will be maskless after March break. They say it’s a huge risk because families might travel across borders for vacation. Are these people retards? Seriously, since when did Covid give a shit what borders are crossed. You cross a border when you go between provinces, you cross a border when you leave your municipality, you cross a border when you enter a store, a hospital or a school. You cross a border when you enter your own home as far as Covid is concerned. Never mind that masks are not an effective mitigation of Covid spread. Even if masks were effective, what the hell does Covid testing at certain “borders” do for public health. Why not say Walmart is the defined border and mandatory Covid test every customer there.

For two years we have been pretending government policy is risk management, turns out it was just an IQ test and Canadians failed.

I mean your preaching to the choir here pal. Not too many people on this board will defend the governments actions during this pandemic.
But what is abundantly clear after 2 years is that no matter how you slice it the MP from Papineau isnt about to let the Quebec Air Force go bust. Itll either be a massive write down of debt or a forced consolidation or more likely both but those jobs will be secured by tax dollars.

Like it or not the Canadian Gov has been in the business of picking winners and losers with your dollars since long before Trudeau hit the scene.

If it makes you feel better you can think of it as an investment, prepandemic Transat had a payroll of 420 million per annum, assuming about a 30% federal tax rate that 800 million is back in government coffers in 5 years and paying dividends thereafter.

[fish4life]

Government loans are one thing but grants are another.

[DanWEC]

I don't know if an AA/TWA style hostile takeover is in the cards. Market cap is only $172M at $4.60, but not sure how many available shares there are, and a competitor would also have to sway LB to relinquish their holding.
That being said, if a competitor felt TRZ's market share was worth it, they probably would have moved into the last 2 years of sub 5 buck stocks. It's a relative bargain. The excluding reason is taking on that $1.2 B in debt.
Maybe they're waiting for the impending inevitable....

The fact is, as with all earning calls in publicly held companies, TRZ has the obligation to state their ability to continue for the next 12 months as a viable going concern.
For the first time ever, in Q1 2022, they've had to say "significant doubt".
So, only one thing is certain, and that's the fact that something major has to occur in the next year. Bankruptcy, takeover, loan writeoffs, something. Business as usual, even at the level of their best years simply isn't going to cut it. The big question is, which one(s) will it be?

[columbia]

I don't know if an AA/TWA style hostile takeover is in the cards. Market cap is only $172M at $4.60, but not sure how many available shares there are, and a competitor would also have to sway LB to relinquish their holding.
That being said, if a competitor felt TRZ's market share was worth it, they probably would have moved into the last 2 years of sub 5 buck stocks. It's a relative bargain. The excluding reason is taking on that $1.2 B in debt.
Maybe they're waiting for the impending inevitable....

The fact is, as with all earning calls in publicly held companies, TRZ has the obligation to state their ability to continue for the next 12 months as a viable going concern.
For the first time ever, in Q1 2022, they've had to say "significant doubt".
So, only one thing is certain, and that's the fact that something major has to occur in the next year. Bankruptcy, takeover, loan writeoffs, something. Business as usual, even at the level of their best years simply isn't going to cut it. The big question is, which one(s) will it be?

Yes. They could also issue a ton of shares if the price goes up after a good season. That would dilute shareholders but could improve their debt/equity ratio. Once that ratio comes down, whether it’s by any option you mentioned, TRZ will probably be bought out by either WJ or AC, will just be a matter of time. It’s the only way the market will get rid of us, no gvnmt will let TRZ fail.

[TFTMB heavy]

There will need to be a long term solution besides more government debt. A forced marriage between TRZ and AC ala AC/CND wouldn’t surprise me at all right now. It was widely believed that was Mike’s baby anyway.

If WS acquisition of SW goes as planned, might very well be what's going to happen...

Either way, that 800m$ will be written off. Wait and see

Whatever’s going to happen will need to happen in the next couple quarters, Transat will need some cash to carry them through a restructuring if they head that way, they can’t wait until the bank account hits 0 dollars before pulling that trigger.

I don’t think you’d hear any complaints from the AC employee groups if they set up a merger TWA-AA style when AA purchased TWA in receivership with the expressed understanding from the TWA employees that in order to preserve their jobs the AA unions would be able to organize the merged lists as they see fit, not BOTL but an order that recognized the unique financial situation. AC will need the pilots as on the latest bid the NB left seat has fallen to 4 years again and there are rumours of growth.

Keep dreaming.

[Sharklasers]

Yes. They could also issue a ton of shares if the price goes up after a good season. That would dilute shareholders but could improve their debt/equity ratio. Once that ratio comes down, whether it’s by any option you mentioned, TRZ will probably be bought out by either WJ or AC, will just be a matter of time. It’s the only way the market will get rid of us, no gvnmt will let TRZ fail.

You must have went to the Justin Trudeau School of Economics.

Forgetting for a moment that the LEEFF terms prohibit diluting the float like that an insolvent company can’t just print and sell shares and not expect it to crash the price. This isn’t some free money cheat.

Keep dreaming.

The crux of the issue with the TWA-AA merger was, what are the career expectations for a pilot who’s company has gone bankrupt and no long exists? I wish nothing but the best for the Transat in this dire situation and would support whatever government assistance needed. 2 years of fumbled government intervention has hurt all airlines and put Transat in such a hole that an organic recovery is out of the question. The MP from Papineau should reach into his costume box and put on his pilot hat and get to work solving how they will keep Transat a going and separate concern.

[columbia]

Yes. They could also issue a ton of shares if the price goes up after a good season. That would dilute shareholders but could improve their debt/equity ratio. Once that ratio comes down, whether it’s by any option you mentioned, TRZ will probably be bought out by either WJ or AC, will just be a matter of time. It’s the only way the market will get rid of us, no gvnmt will let TRZ fail.

You must have went to the Justin Trudeau School of Economics.

Forgetting for a moment that the LEEFF terms prohibit diluting the float like that an insolvent company can’t just print and sell shares and not expect it to crash the price. This isn’t some free money cheat.

Keep dreaming.

The crux of the issue with the TWA-AA merger was, what are the career expectations for a pilot who’s company has gone bankrupt and no long exists? I wish nothing but the best for the Transat in this dire situation and would support whatever government assistance needed. 2 years of fumbled government intervention has hurt all airlines and put Transat in such a hole that an organic recovery is out of the question. The MP from Papineau should reach into his costume box and put on his pilot hat and get to work solving how they will keep Transat a going and separate concern.

.

https://www.lapresse.ca/affaires/marche ... lution.php

They WILL sell shares, garanteed. They’ll have to.

[altiplano]

The Quebec government will come through.

There will need to be a long term solution besides more government debt. A forced marriage between TRZ and AC ala AC/CND wouldn’t surprise me at all right now. It was widely believed that was Mike’s baby anyway.

I was half way joking there... it's a tough spot politically for any Quebec politician, particularly Legault though given his history.

Here's another out there prediction, a Hail Mary ...

Transat restructures and Air Canada agrees to a new deal with concessions from the Feds and Quebec on the ACPPA restrictions.

AT shareholders will be liquidated, and AC will assume AT's debt obligations, it will remain a Quebec subsidiary under the AC umbrella.

Transat and ACV to combine as a new ACTV entity HQ'd in YUL, but Air Canada itself is relieved of the YUL HQ obligations and other parts of the Act that other Canadian Airlines aren't subjected to, ie. French mandates to a level it's getting sued when the seatbelt says "LIFT" in English only, or "EXIT" letters are bigger than "SORTIE" letters over the door because there's fewer of them to fit, or an FA on a Jazz flight brings a bilingual douchebag a Sprite instead of a 7up and he freaks out in French at a level she can't keep up with...

So they'll get rid of that, there will be protest from the French National Socialists in Quebec, but with the political alternative of full loss of Transat they will be quieted.

WJ will complain too, but the Sunwing transaction will get approved and so they can't say much... EU regulators will have a lighter touch as the industry carnage is clear, they'll be politically lobbied by Trudeau and Legault, and they're pragmatic, they will get their pound for appearances though with a chunk of AT slots/routes given up which mostly aren't viable today or being used anyway.

Then here on avcanada we will have a new 50 page SLI thread, habslover will come in with some more great quips, some guys will be upset about everything they're losing, and as usual I'll be the biggest asshole on the internet. I can't wait.

Flame away...

[JoeyBarton]

The Quebec government will come through.

There will need to be a long term solution besides more government debt. A forced marriage between TRZ and AC ala AC/CND wouldn’t surprise me at all right now. It was widely believed that was Mike’s baby anyway.

I was half way joking there... it's a tough spot politically for any Quebec politician, particularly Legault though given his history.

Here's another out there prediction, a Hail Mary ...

Transat restructures and Air Canada agrees to a new deal with concessions from the Feds and Quebec on the ACPPA restrictions.

AT shareholders will be liquidated, and AC will assume AT's debt obligations, it will remain a Quebec subsidiary under the AC umbrella.

Transat and ACV to combine as a new ACTV entity HQ'd in YUL, but Air Canada itself is relieved of the YUL HQ obligations and other parts of the Act that other Canadian Airlines aren't subjected to, ie. French mandates to a level it's getting sued when the seatbelt says "LIFT" in English only, or "EXIT" letters are bigger than "SORTIE" letters over the door because there's fewer of them to fit, or an FA on a Jazz flight brings a bilingual douchebag a Sprite instead of a 7up and he freaks out in French at a level she can't keep up with...

So they'll get rid of that, there will be protest from the French National Socialists in Quebec, but with the political alternative of full loss of Transat they will be quieted.

WJ will complain too, but the Sunwing transaction will get approved and so they can't say much... EU regulators will have a lighter touch as the industry carnage is clear, they'll be politically lobbied by Trudeau and Legault, and they're pragmatic, they will get their pound for appearances though with a chunk of AT slots/routes given up which mostly aren't viable today or being used anyway.

Then here on avcanada we will have a new 50 page SLI thread, habslover will come in with some more great quips, some guys will be upset about everything they're losing, and as usual I'll be the biggest asshole on the internet. I can't wait.

Flame away...

I really hope you are wrong but I suspect you are right..

[TFTMB heavy]

The Quebec government will come through.

There will need to be a long term solution besides more government debt. A forced marriage between TRZ and AC ala AC/CND wouldn’t surprise me at all right now. It was widely believed that was Mike’s baby anyway.

I was half way joking there... it's a tough spot politically for any Quebec politician, particularly Legault though given his history.

Here's another out there prediction, a Hail Mary ...

Transat restructures and Air Canada agrees to a new deal with concessions from the Feds and Quebec on the ACPPA restrictions.

AT shareholders will be liquidated, and AC will assume AT's debt obligations, it will remain a Quebec subsidiary under the AC umbrella.

Transat and ACV to combine as a new ACTV entity HQ'd in YUL, but Air Canada itself is relieved of the YUL HQ obligations and other parts of the Act that other Canadian Airlines aren't subjected to, ie. French mandates to a level it's getting sued when the seatbelt says "LIFT" in English only, or "EXIT" letters are bigger than "SORTIE" letters over the door because there's fewer of them to fit, or an FA on a Jazz flight brings a bilingual douchebag a Sprite instead of a 7up and he freaks out in French at a level she can't keep up with...

So they'll get rid of that, there will be protest from the French National Socialists in Quebec, but with the political alternative of full loss of Transat they will be quieted.

WJ will complain too, but the Sunwing transaction will get approved and so they can't say much... EU regulators will have a lighter touch as the industry carnage is clear, they'll be politically lobbied by Trudeau and Legault, and they're pragmatic, they will get their pound for appearances though with a chunk of AT slots/routes given up which mostly aren't viable today or being used anyway.

Then here on avcanada we will have a new 50 page SLI thread, habslover will come in with some more great quips, some guys will be upset about everything they're losing, and as usual I'll be the biggest asshole on the internet. I can't wait.

Flame away...

There is still the EU and their laundry list of request to consider, that was the deal breaker the first time around. We'll see if AC has the heart to take another stab at it. A bunch of new ULCC chipping away at the domestic, AT codeshare with Porter chipping away at some domestic and transatlantic and WS/SW being the biggest player on the sun destinations now. Not enough to take down AC but the bottom line is always the most important thing and this will hurt the bottom line.

[Sharklasers]

Yep, if there is one thing for certain it’s that Transat finally has AC right where they want them. Annik was just pleading for government money to keep the lights on in order to lull big red into a false sense of security.