Westjet/Air Canada merger on the horizon?

[Doctor Evil]

This quote is from the Globe and Mail a few weeks ago .

"One of ACE Aviation Holding Inc.'s options for unwinding itself as a holding company could be finding a buyer for Air Canada, says RBC Dominion Securities Inc. analyst Nick Morton. ''One logical, if controversial, outcome could be a merger of WestJet and Air Canada,'' Mr. Morton wrote in a research report yesterday."


Any thoughts??

[Czar]

Anybody who suggests this idea needs to lay off the bottle. But seriously, this type of merger wouldn't benefit any of the parties involved. Thus it will never happen.

[Conquest Driver]

Any thoughts??

$995 return, Vancouver to Calgary with a required Saturday night stay.

[the_professor]

This quote is from the Globe and Mail a few weeks ago .

"One of ACE Aviation Holding Inc.'s options for unwinding itself as a holding company could be finding a buyer for Air Canada, says RBC Dominion Securities Inc. analyst Nick Morton. ''One logical, if controversial, outcome could be a merger of WestJet and Air Canada,'' Mr. Morton wrote in a research report yesterday."


Any thoughts??

What a perfect fit for Westjet's business model!

- A fleet that, inexplicably, consists of virtually every aircraft type manufactured within the last thirty years [provides for ease of maintenance, training costs, and scheduling logistics];

- A unionized work force across the board;

- A general hatred for the company among a large percentage of the population;

- Etc...

Get me some of whatever Morton was smoking, because it must be damn good to come up with an idiotic statement like that (if true).

[Liquid Charlie]

Wonderful idea. I always wondered how westjet would finally turn into a "real" airline. What is missing is over booking of flights. Cancellations out of the blue - grumpy counter staff - pilot in fighting over seniority - yep lets open that can of worms -- I always wondered when westjet would finally evolve into the airline models we love and respect.

They one thing they can do is lose the jokes - stand-up comics they are not.

[Nark]

Where does the money come from to aquire what ACE has to offer?

Doesn't Westjet share profits?

Or is it also on the market?

Its been a while.

[Conquest Driver]

There isn't the proverbial "hope in hell" that any government would allow this.

[Highflyinpilot]

As everyone else thinks, It will never happen(Voluntarily anyways)

[flyinphil]

Where does the money come from to aquire what ACE has to offer?

Public share offerings for the most part. Risk sharing partners. Stock trades with current AC shareholders.

Doesn't Westjet share profits?

Yes, but a small percentage of profits.

Or is it also on the market?

Every publicly traded company is "on the market".

[Main Gear]

Yeah...also heard that the Leafs and Canadiens are talking merger ( has if the Leafs would touch that)

[flyinphil]

Not that I am a proponent of a merger between AC and WS but lets just replay dialogue I have heard over the years...

"I heard PWA is buying CP Air!" "No way man, never happen. PWA is tiny"

"I heard Canadian is buying Wardair!" "Nah, why would they do that?"

"I heard AC is buying Canadian!" "What a waste man. Let em go broke! Government will never allow it anyways!"

"I hear WS is buying AC!" ....don't know but never say never

[Liquid Charlie]

Ever think of what Canadian aviation would look like if the airlines hadn't pissed money into the wind trying to establish the "connector" airlines. Money was spent to the point of absurd. I'm not saying that connectors weren't viable but doing it the way Air Canada and Canadian approached it was the beginning of their demise. The failure of Canadian and the near collapse of Air Canada can be traced back to these roots. The debit load incurred by this drunken spending spree shaped what we have today. It should have been all done through commercial agreements and code share with level 2 carriers. The only ones laughing all the way to the bank were people like Stan and Max.

Would the government allow such a merger -- not likely - Air Canada/Jazz has risen from ashes and WJ is doing well. They need the competition to keep voters happy. It would be political suicide to allow the elimination of competition.

[C-FABH]

- A general hatred for the company among a large percentage of the population

and employees.

[Conquest Driver]

Anybody who suggests this idea needs to lay off the bottle. But seriously, this type of merger wouldn't benefit any of the parties involved. Thus it will never happen.

That was my previous opinion as well. There is one possible exception. If Air Canada was about to full out "crater" then Westjet might be pressured by the Government to buy them.

All I can think about is the pictures on Discovery Channel of a Python trying to swallow a far too large piece of prey

[Alex YCV]

I think that the Canadian Government might actually have something to say about this too. When Air Canada and Canadian merged, the end results were not good for anyone. The public, the airline itself, and the employees all pretty much got hosed on the deal, and AC ended up in deep financial doo-doo.

Canada needs at least 2 reasonable sized airlines (and Jazz doesn't count as a second airline) to keep things reasonable for the flying public, to offer choice, and to keep at least passing pressure on things like prices and service levels.

[Rockie]

I've been around long enough to not be surprised by anything in this industry. And I stopped using the word "never" years ago.

[xsbank]

Rockie, exactly (feels good to agree occasionally, no?).

This sort of thing is a business/political/social/economic possibility and we would never know the whole story anyway. Probably depends a lot on who owns the stock and who has the most to gain.

Nothing is unbelievable in this industry. Nothing.

[ez4u2say]

When I first saw this post it brought back memories of what happened some years ago with companies like EPA, Nordair,Air BC, Wardair, CP Air, PWA, Canadian, and yep finally where did they, any possibly some that I missed, all end up....big RED (Air Canada) not to mention if I go back even more years how Canadian Pacific Airlines and Air Canada both swallowed up many other smaller companies. Folks this has been going on for years and years. I have had the pleasure/displeasure of going through these mergers/takeovers at least 6 times. Yep there were all kinds of problems. Fleet similarity, unions, non unions, etc.... The bottom line is, if you think the government really gives a rat's as# about what is good for the flying public you had better think again. Can't recall them getting too excited about oil companies merging or how about any mineral company, financial institutes etc etc....Sure they put up a good front and make you feel like they are working and doing all they can to serve YOU, however in my opinion, the bottom line is, if a public company or any other for that matter see any benefit in doing what it takes it will have certainly done it's homework. From a purely personal perspective I, like so many of you can't see this happening, however having said that I cetainly do not have the insight required to say nay or yeh....anyway that's my nickel's worth (inflation)

[flyinphil]

Good to see wisdom still looks to the past before looking to the future.

In the current business climate, I can't see it either. Unfortunately, that climate can turn on a dime as many of us senior folks have experienced.

[ez4u2say]

Merger with Westjet or outright sale cited as possibilities for Air Canada
Posted: December 06, 2007, 10:49 AM by Jonathan Ratner
Market Call, Industry
While ACE Aviation Holdings Inc.’s $1.5-billion share buyback plan announced earlier this week may have no direct effect on Air Canada, it does signal ACE is serious about its timely unwinding. It is possible, however, that unwinding will put Air Canada in play for a private equity player or even open the door for an unlikely merger with WestJet Airlines Ltd., according to Nick Morton, RBC Capital Markets analyst.

There are three possibilities for ACE to deal with its 75% ownership interest in Air Canada as part of its eventual unwinding, Mr. Morton said in a note to clients.

ACE could sell shares in the market, though he cautioned that it may be hard to realize an adequate return with the airline trading around $12.50 a share as opposed to the $22 target price Mr. Morton has on the stock.

Another scenario would see ACE buying back the remaining 25% interest in Air Canada in a move that other analysts have said would be a tax-effective way of unwinding the company.

Finally, ACE may sell Air Canada to an “industry or financial buyer,” with possible interested parties including a private equity group in conjunction with a foreign airline.

“Or, a purely made in Canada offer could emerge,” he noted. “Canadian law limits non-Canadians to 25% of the vote as a group. One logical, if controversial, outcome could be a merger of WestJet and Air Canada.”

It’s an unlikely scenario, however, with only two major players in the Canadian market. In order for such a merger to get the go-ahead from the Competition Bureau, there would have to be a change to the current cabotage rules in Canada, Mr. Morton said.

“For this to be allowed foreign airlines would likely have to be allowed to fly between points in Canada,” he added.

Scott Deveau

Thought I would go to the source for all to read.......

[2R]

Considering you only have to live here for three years to considered Canadian .That little loophole should not be to hard to get around.