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The parties having concluded that European Commission approval would not be obtained – The Arrangement Agreement between Transat and Air Canada is Terminated by Mutual Consent

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Transat actively pursuing negotiations to secure long-term financing as it plans for relaunch

Transat to consider other available strategic alternatives

MONTRÉAL, April 2, 2021 /CNW Telbec/ – Transat A.T. Inc. (“Transat” or the “Corporation“) today announced that the contemplated arrangement with Air Canada (the “Arrangement“) under the revised arrangement agreement between Transat and Air Canada dated October 9, 2020 (the “Arrangement Agreement“) has been terminated by mutual agreement of Transat and Air Canada, effective immediately. The parties have reached this agreement after having been advised by the European Commission that it would not approve the transaction.

In connection with the termination of the Arrangement Agreement, Air Canada has agreed to pay a $12.5 million termination payment to the Corporation and to waive its entitlement to a $10 million termination fee in the event of an acquisition of Transat by a third party in the twelve months following termination of the Arrangement Agreement.

“This transaction, first contemplated more than two years ago, was complicated by the pandemic, and, ultimately, Air Canada reached its limit in terms of concessions it was willing to provide the European Commission to satisfy their competition law concerns,” said Jean-Marc Eustache, President and Chief Executive Officer of Transat. “While both companies expected the proposed transaction to result in compelling benefits to shareholders, customers and other stakeholders, and even though we had received approval from the Canadian authorities, it has now become evident that we would not obtain the approval of the European Commission. Under these circumstances, Transat and Air Canada therefore mutually agreed that terminating the Arrangement Agreement was in our respective best interests. Now that Transat is no longer constrained by the limitations under the Arrangement Agreement, we are free to take the necessary steps to ensure a successful, long-term future, beginning by securing long-term financing to provide Transat with the flexibility to deliver on its strategic plan.”

“I would like to thank our employees for their unwavering dedication and commitment throughout this process,” added Mr. Eustache. “Although we are disappointed with this outcome, we are confident in the future of Transat and look forward to building back stronger as we exit the throes of the pandemic.”

Details of the Termination Agreement

The termination agreement signed today between Air Canada and the Corporation provides for, among other things, the immediate termination of the Arrangement Agreement and contains a mutual release pursuant to which the parties have agreed to release one another from claims arising from, or related to, the Arrangement Agreement. A copy of the termination agreement will be filed on SEDAR at www.sedar.com.

As stated above, Air Canada has agreed to pay a one-time $12.5 million termination payment to the Corporation and to waive its entitlement to a termination fee that would have been payable in the event of an acquisition of Transat in the twelve months following termination of the Arrangement Agreement by one of the parties. This agreement between the parties regarding the treatment of the termination fees entitlements contained in the Arrangement Agreement was reached after carefully considering all relevant facts and circumstances, and in the interests of moving forward from the termination of the parties’ relationship with no outstanding issues. Elements considered included the following, based on the terms of the Arrangement Agreement:

  • a $10 million reverse termination fee payable by Air Canada to Transat upon termination if the European Commission’s approval could not be obtained under any condition, meaning a full block of the Arrangement; or
  • a $30 million reverse termination fee payable by Air Canada to Transat if Air Canada or Transat would have unilaterally terminated the Arrangement Agreement prior to a decision by the European Commission not involving a full block of the Arrangement; and
  • a $10 million termination fee payable by Transat to Air Canada if, in the 12 months following the date of termination of the Arrangement Agreement, (A) an acquisition of Transat were to be consummated or effected, or (B) if Transat were to enter into an agreement for its acquisition and such acquisition were later consummated.

Finances

As previously stated, the Corporation requires new financing totalling at least of $500 million in 2021. The Corporation has been taking and will continue to take all measures available to it to preserve cash and, as previously announced, it has put in place a $250 million short-term subordinated credit facility, which matures on June 30 and will need to be replaced or extended before that date.

The Corporation is actively pursuing negotiations to secure long-term financing, including under the Large Employer Emergency Financing Facility (“LEEFF”) and via prospective support from the Canadian government for businesses in the travel and tourism sector. Discussions on both topics are at an advanced stage and Transat’s management is confident that a satisfactory financing will be secured in the coming weeks.

Strategic Plan

Now that Transat is no longer constrained by the limitations under the Arrangement Agreement, it is free to focus on relaunching operations under its strategic plan, including by leveraging its many competitive advantages.

As a smaller operator, Transat can be nimble and quickly adapt to ever-shifting market conditions. There is significant pent-up demand among customers in the Corporation’s primary segments of leisure travel and visiting friends and relatives (VFR), which are expected to recover sooner than business travel.

Transat’s smaller aircraft fleet provides greater flexibility and efficiency, and the Corporation benefits from a well-respected brand that customers love, as well as committed staff members and a strong distribution network.

Discussions with third parties

In addition, now that the Arrangement Agreement has been terminated, Transat is free to hold discussions with potential strategic and financial acquirers, including Mr. Pierre Karl Péladeau, whose investment company, Gestion MTRHP Inc., previously made (and since reiterated) a proposal to acquire all of the issued and outstanding shares of Transat for 5$ a share. The Board intends to examine available strategic alternatives, including the pursuit of the Corporation’s stand-alone business plan.

“The global air transportation and tourism industry has been among those most affected by the COVID-19 crisis. However, the arrival of vaccines brings us a light at the end of the tunnel, and Transat is well positioned to bounce back. In close to 40 years of existence, we have traversed numerous crises and each time, we emerged stronger than before, demonstrating our resilience as an organization. We look forward to a safe and healthy future, as we hopefully put this pandemic behind us,” concluded Mr. Eustache.

About Transat

Transat A.T. Inc. is a leading integrated international tourism company specializing in holiday travel. Under the Transat and Air Transat banners, the Corporation offers vacation packages, hotel stays and air travel to some 60 destinations in over 25 countries in the Americas and Europe. Transat is firmly committed to sustainable tourism development, as reflected in its multiple corporate responsibility initiatives over the past 14 years and obtained Travelife certification in 2018. 

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Source: https://canadianaviationnews.wordpress.com/2021/04/02/the-parties-having-concluded-that-european-commission-approval-would-not-be-obtained-the-arrangement-agreement-between-transat-and-air-canada-is-terminated-by-mutual-consent/

Aviation

Covid Crisis Decimates Indian Airline Seat Capacities

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As the second wave continues to spread, airlines have sharply cut their seat capacities. The move comes as domestic flights see fewer passengers and India remains banned by countries globally. Let’s find out more about the impact of the second wave on airlines.

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Passenger numbers have crashed over the last month as cases remain high. Photo: Getty Images

Slashed

According to an OAG report, seen in the Times of India, India has slashed the number of monthly seats on sale. For May 2021, airlines in South Asia have cut capacity by a massive 15.1%, or 2.4 million seats. This drop has been due to reduced domestic demand and international traffic all but gone due to travel bans.

Data shows that daily domestic passengers fell below 100,000 for the first time in over six months. Sunday (May 9th) saw just 87,372 travelers take to the skies across India, the lowest point since last August, just months after domestic flights resumed. Airlines, in kind, have reduced their flying schedules and frequencies across once-popular routings.

Air India Dreamliner Boeing 787 Arrives Into Sydney
Indian airlines are reeling from the impact of the second wave, which has decimated any recovery made over the last year. Photo: Getty Images

Internationally, the situation is even worse. Travel from India has been restricted by every major market, such as the US, UK, EU, UAE, Saudi Arabia, Maldives, and dozens of others. This has deeply impacted carriers like Air India, for whom long-haul flying is crucial, and further reduced available seat capacity.

Overall

Unlike the first wave, some aviation markets around the world are actually beginning their recovery thanks to vaccine campaigns and falling caseloads. US carriers dominate the top 10 list of biggest airlines (with five spots on the list), while China comes in second (with four spots on the list). Traffic in Europe is also expected to pick up in the coming months as borders reopen.

Meanwhile, IndiGo has slipped from being the 6th biggest airline in the world to the 10th by flights operated in May. The low-cost giant cut flights by 25% due to the second wave and only operated 26,060 flights. This figure will likely continue to fall until cases in India see a substantial drop, which could take weeks, if not more.

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IndiGo has fallen from the 6th to 10th largest airline in the world due to the crisis. Photo: Getty Images

Other carriers have been struggling even more, forcing them to defer salaries and decimate capacity. As the financial impact of COVID-19 grows, airlines will have no choice but to cut costs in the near future, which includes reducing employee and operational costs.

Reversed

Perhaps the most disconcerting about the aviation industry’s woes is how quickly the situation has changed. Just two months ago, Indian airlines were on a high, getting nearer to pre-pandemic levels every day. International services were also slowly resuming, as countries planned to reopen their borders to Indian tourists.

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However, the second wave has erased any gains made by the aviation industry over the last year. More importantly, the healthcare infrastructure and critical supplies have been dwindling, forcing India to import emergency oxygen and fly in other supplies. For now, aviation seems unlikely to recover in the short term.

What do you think about the impact of India’s second wave? How long will airlines take to recover? Let us know in the comments!

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Source: https://simpleflying.com/india-seat-capacity-cut/

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Air Canada cancels flight to Israel amid fighting

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From CP24 – link to source story

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An Air Canada flight makes its final approach as it lands in Ottawa on July 3, 2019. (THE CANADIAN PRESS/Adrian Wyld)

CP24.com, Staff | Wednesday, May 12, 2021

Air Canada has cancelled a flight that was scheduled to depart for Israel on Tuesday amid violence in the region and says it is monitoring the situation to determine any further changes to its flight schedule. 

The flight had already been delayed for 24 hours and the airline said Wednesday it has now been cancelled, along with a flight that was set to return from the country today.

Another flight is scheduled to depart from Toronto over the weekend, however Air Canada said that it will “continue to monitor events and will adjust our schedule further if warranted.”

Militants have rained down hundreds of rockets into Israel over the past few days, including some fired toward the main airport in Tel-Aviv, while the Israeli military has carried out airstrikes in Gaza.

American Airlines, United Airlines and Delta Air Lines have also cancelled or suspended some flights into the country amid the fighting.

Air Canada said affected customers have been notified and a goodwill policy will be offered to them.

With files from AP

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Source: https://canadianaviationnews.wordpress.com/2021/05/12/air-canada-cancels-flight-to-israel-amid-fighting/

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Qantas ground staff blindsided by COVID passenger, say reports

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Qantas A330-202 departs from Brisbane after sunset as QF597 to Perth (Michael Marston)

Qantas ground staff at Brisbane Airport were reportedly blindsided by the news that a COVID-positive passenger from Papua New Guinea was about to land last week, according to reports.

The Courier Mail claimed employees involved felt that they were “put at risk”, particularly as aviation workers are yet to be prioritised in the current vaccine rollout in the same way as quarantine and border workers.

However, Qantas downplayed the story, saying that “there are a number of strict procedures in place for managing aircraft arriving from overseas” and adding that the ground staff in question “followed all procedures”.

Speaking with the Courier Mail, the staff involved called the incident “an absolute cock-up”, after they were informed 30 minutes prior to landing that an incoming flight, Air Niugini flight PX003, had a passenger onboard who tested positive for COVID-19 before boarding.

“No one could believe it,” the employee told the Newscorp publication, “We were put at risk, with no explanation of how an infected passenger flight could have been allowed to land.”

Despite his positive COVID test results, the man had an exemption letter allowing him to travel to Australia.

The source said that staff were already wearing gloves and masks at the arrivals gate, and were then told to “open the [aircraft’s] door and run” back to the terminal.

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The Courier Mail confirmed that a Qantas supervisor did instruct staff to open the aircraft’s doors and return to the terminal to reduce any risk of transmission, as is standard procedure for international arrivals during the pandemic.

“The last we saw of the COVID passenger, he was sitting on the floor of the arrivals concourse looking very, very unwell, with officials from border force, quarantine and Queensland Health flapping about him,” the staffer said.

“We’ve been kept in the dark, and are extremely concerned because this thing spreads like wildfire.”

Later, Queensland’s Chief Health Officer Jeannette Young confirmed that Australian authorities were aware that the man had tested positive for COVID-19, however were confident that he was not infectious and was instead shedding the virus.

“This gentleman was a fully recovered case, he was a historical case,” she said.

“And that was why he was given permission by Australian Border Force to travel to Australia.”

A spokesperson for Air Niugini confirmed the passenger was initially scheduled to fly from Port Moresby to Brisbane on 6 May, however was “denied uplift as his paperwork was not in order”, due to his positive test result.

He returned to the airport the following day, 7 May, with the appropriate paperwork that allowed him to fly despite the positive result.

“The passenger had previously been diagnosed with Covid-19 and had undergone 14 days’ quarantine as per normal procedures,” the spokesperson said.

“After that he kept getting positive results. He received a doctor’s certificate advising he was considered non-infectious, and that he had been symptom free in the previous 72 hours.

“Air Niugini had been in touch with the Australian High Commission in Port Moresby in relation to this case and they in turn liaised with the Australian Border Force which approved the uplift.

“There were questions upon the passenger’s arrival into Brisbane as to the correct processes to follow, but we understand they have now been identified and addressed.”

According to the Courier Mail, the passenger in question is an Australian passport holder.

A spokesman from the Australian Border Force said: “There are a number of categories in which the traveller is automatically exempt from the travel restrictions and can enter Australia (without obtaining an individual exemption), including if they are an Australian citizen,” he said.

“Quarantine arrangements are a matter for each state and territory.”

Peter Biagini, QLD Branch Secretary for the Transport Workers Union (TWU), stated the incident highlights the high-risk environment that aviation frontline workers face each day.

“Aviation workers are on the frontline and are at a high risk of interacting with positive COVID cases,” he said.

“So far the Federal Government has refused to prioritise aviation workers in the vaccine rollout, leaving workers vulnerable when situations like this arise.”

“While this passenger had an exemption, the fact remains that aviation workers were potentially in contact with a positive case, and despite PPE precautions we know that this is a very contagious virus that can spread very quickly,” Biagini added.

“This virus is primarily appearing from flights coming to Australia, and we need to ensure that the workers who are interacting with international flights are protected.”

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Source: https://australianaviation.com.au/2021/05/qantas-ground-staff-blindsided-by-covid-passenger-say-reports/

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Rex Has No Plans To Retire The Saab 340

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Rex’s new Boeing 737 between Australia’s big cities have grabbed the headlines lately. But the airline’s core business is regional flying to small towns. Rex’s turboprops link the country to the city and are a familiar sight at Australian airports. But those turboprops are not getting any younger. Nonetheless, it seems like Rex will stick with them for a while yet.

REX-Saab-340
Rex’s John Sharp says there are 10 to 15 years left in their Saab 340s. Photo: Andrew Curran/Simple Flying

Rex’s fleet of 60 Saab 340 planes have an average age of over 26 years. But according to Rex’s Deputy Chairman John Sharp, the Saabs have a lot of life left in them yet.

“They are the most brilliant aircraft,” Mr Sharp told a CAPA Live event on Wednesday. “They are very cost-effective. They are very strong, robust aircraft, and they will put up with a lot.”

Rex’s Saab 340s provide a vital service

Rex’s Saabs fly into big airports like Sydney, Melbourne, Brisbane, and Perth. But of the 60 plus airports Rex flies to, most are fairly quiet airstrips that only see a few commercial flights a day. Or sometimes, only a few commercial flights a week.  Rex fills its Saabs with city-based professionals, public servants, and medicos heading out to the country for some fly-in-fly-out work. In the other direction, country residents head to the city on Rex for appointments and medical matters.

These flights crisscross the country and provide a vital public transport service. But many passengers say the Saabs are old, noisy, and like taking a bus. There has been speculation for several years about Rex replacing its Saabs.

REX-Saab-340
Rex flies to a lot of small airports, including St George (pictured) in southwest Queensland. Photo: Andrew Curran/Simple Flying

Rex signed an MOU with ATR in 2020 to investigate fleet renewal

In mid-2020, Rex and ATR signed a memorandum of understanding regarding renewing and complementing Rex’s fleet of Saab 340s.

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We are delighted to be able to cooperate with such a great and well-proven company as Rex,” said ATR’s Fabrice Vautier at the time. “It is vital that communities and businesses can continue to prosper thanks to regional routes, and we believe ATR aircraft range provides a sustainable and dependable transportation system to airlines and the regions that they serve.”

But it is quite a leap from a 34 seat Saab 340 to an ATR 72-600 that comfortably seats double that number. While an ATR 72-600 might work nicely on some of Rex’s busier regional routes – say to Port Lincoln or Port Macquarie, it is much too big for many of Rex’s thinner regional routes.

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REX-Saab-340
A Rex Saab 340 at Sydney Airport. Photo: Andrew Curran/Simple Flying

Nothing wrong with the Saab 340, says Rex’s Deputy Chairman

According to John Sharp, Rex’s Saabs may be old, but there is nothing wrong with them, and he doesn’t see them leaving the fleet for some time.

“They are brilliant for regional flights, flights from one to two hours, they’re really good at that. We’re good at maintaining and operating them. Theoretically, we could go another 10 to 15 years with the Saabs because they’ve got enough life left in them.

“Like all these things, it will come down to the cost of maintaining them versus the cost of buying new ones. The second part will be demand. If we actually find these routes grow so much that we need to put on larger aircraft, then we will.

“The Saab offers small, cost-effective flights that give frequency and frequency gives convenience and convenience brings more passengers.”

Judging John Sharp’s comments, the Saabs aren’t going anywhere for a while. While fleet renewal is inevitable, it doesn’t appear to be a short to medium-term priority at Rex. With more Boeing 737-800s coming into the fleet, the Deputy Chairman suggests they could use them on some flights on some busier regional routes in the future. But for most of Rex’s country-based passengers, the Saab 340 will be flying them for some years to come.

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Source: https://simpleflying.com/rex-saab-340/

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