WAA continues to focus on serving community while navigating pandemic

WINNIPEG, Manitoba – April 29, 2021 – As Winnipeg Airports Authority continues to navigate the COVID-19 pandemic, the organization updated the community earlier today during its virtual Annual Public Meeting on how the global health crisis will impact the future of Winnipeg Richardson International Airport.

Credit to Winnipeg Airports Authority

2020 started off well with passenger volumes in the first two months of the year exceeding forecasts and the airport providing direct access to 43 destinations across North America. In March, the air travel industry immediately began to feel the impacts of the pandemic as borders closed, airlines reduced service and non-essential travel advisories came into effect.

Winnipeg Richardson International Airport witnessed passenger traffic plummet 95 per cent almost overnight. The year finished with a total of 1.3 million passengers travelling through the airport, the lowest since 1971, compared to 4.5 million in 2019. By the end of December, just 15 routes remained out of Winnipeg with service to in-demand destinations completely cut.

“The impact of the pandemic will be generational,” said Barry Rempel, President and CEO of WAA. “It will take years to rebuild routes and get back to a place where we can think about facilities required by future growth. We are continuing to provide a safe environment for essential travel today but will need government support to rebuild our community’s connectivity and get Canadians moving once the country is ready to re-open.”

The Government of Canada provided support in the form of rent relief and wage subsidy programs, however, it fell short of the sector-specific support seen in other countries. WAA continues advocating for the return of the rights to receive international flights in our community while seeking to stimulate travel by leveraging vaccination levels and increased testing capabilities.

WAA’s diversified model, including the benefits of being well placed in the emerging cargo environment, positioned the company well in helping to offset some of the impact of reduced passenger travel. WASCO and Airport City Winnipeg helped keep the airport competitive and financially secure by exploring new opportunities both in Winnipeg and beyond.

“We’ve experienced some successes in a difficult environment and we’re not done yet,” said Rempel.“What has been accomplished this past year could not have been done without everyone working together, prioritizing public health and safety above all else. WAA remains the steady hand on the stick, navigating the crisis and living our values in support of our why – serving our community.”

A recording of WAA’s Annual Public Meeting can be viewed on our YouTube channel.

WAA’s Annual Report for 2020 can be found on the Publications & Stats section of our website.

About Winnipeg Airports Authority Inc.
Winnipeg Airports Authority serves the community by leading transportation innovation and growth. As a non-share capital corporation, all net revenue is reinvested back into delivering on our mission of providing excellent airport services and facilities in a fiscally prudent manner. WAA does this through a group of companies that work together toward a common vision. Airport operations support over 18,500 jobs in the community and generate $4.3 billion in economic impact. WAA is proud to be recognized as one of Manitoba’s Top Employers for 2021, the tenth year in a row.

Winnipeg airport lost $40M in 2020

From the Toronto Star – link to source story

By Temur Durrani, Local Journalism Initiative Reporter, Winnipeg Free Press | Thu., April 29, 2021

The Winnipeg Airports Authority revealed a particularly grim outlook of its consolidated financial statements at its annual public meeting Thursday.

After a year marred by COVID-19, executive members from the airports authority said urgent support is needed from the federal government to save it. They outlined the many ways in which Ottawa has failed regional airports like Winnipeg’s.

Nicole Stefaniuk, vice-president of finance and administration, said 2020 was the worst year in the local airport’s history — mostly because passengers typically make up about 90 per cent of airport revenue and because almost 80 per cent of costs are fixed, such as utilities, personnel employment and taxes).

Passenger traffic fell from an average of 12,300 travellers per day to less than 250 on a good day for Winnipeg’s airport — a symptom of mandated lockdowns, border closures and pandemic travel restrictions across Canada.

That translated into a $73.5-million decrease in revenue, which was 52.6 per cent lower than 2019. The airport ended 2020 with a net loss of $40.3 million compared to a net income of $3.5 million in 2019.

“We’ve tried to cut down wherever we could just to make due,” said Stefaniuk.

“We assessed every light, thermostat, piece of equipment and process to find efficiencies and even delayed all non-safety related capital projects to make cuts. There were a lot of unfortunate decisions and we’re still at a hefty loss.”

Part of those cuts involved saying goodbye to almost 20 per cent of the airport’s 150-person staff, who were either laid off or decided to retire in 2020.

Pay reductions were implemented for non-unionized employees, and the airport even accessed the Canadian Emergency Wage Subsidy to pay out some salaries.

“But what are you supposed to do when no one is travelling and when your federal government just isn’t helping you out like other countries?” Barry Rempel, CEO and president, told the Free Press in an interview.

Canada has provided its aviation and air transportation industry the most minimal support compared to other G7 countries, he said.

That’s going to cause a much costlier recovery for the sector in this country and also result in much higher airfares with fewer route options, said Rempel.

“In reality, we were aviation leaders before this pandemic,” he said.

“This lack of aid continues to hurt our country’s competitive edge in the whole world, especially when you see the U.S. handing out billions of dollars through several legislative packages to their airports.”

Earlier this month, the Trudeau government announced $1.5 billion in targeted support from the federal budget for pandemic-battered travel and tourism industries.

“Canada clamped down on travel to keep Canadians safe, but we will be providing support where COVID has struck hardest,” Finance Minister Chrystia Freeland told reporters, touting the $465 million dollars earmarked under that budget item for air travel and airports.

However, Rempel said none of those details have yet been identified.

The emergency funding is “quite little to begin with, because it’s intended to be for all airports all across the country,” he said. “Certainly, I can say none of us know at this stage where it’s going and if any of that will be coming to Winnipeg.”

Winnipeg’s airport isn’t so keen about support or lobbying from the Manitoba government either. “Have they successfully vocalized our plight on our behalf?” said Rempel.

“You can look at our finances and obviously see the answer.”

Winnipeg began last year with direct service to 43 destinations across Canada, the U.S., Mexico and the Caribbean. That number has drastically reduced to 14 domestic connections and direct service to only one U.S. destination: Minneapolis-St. Paul.

On top of that, four airlines — Sunwing, Air Transat, Swoop and United Airlines — have stopped servicing the airport altogether.

Since the federal wage and rent subsidy programs were the only supports provided to the airport in 2020, the company is now exploring alternative methods for relief. They commenced a bondholder consent solicitation process in December and have secured short-term financial relief for the next two years, with a year-end issuing $100 million of bonds.

“I know there is light at the end of this because in all my years in this industry, I’ve seen the desire to go places always returns,” said Rempel.

“But this isn’t just about Winnipeg’s airport. This whole process of building back and recovery will take years and years without the right policies or government support.”

AirSprint Releases White Paper on What to Expect From a Career in Business Aviation and Why Now is the Perfect Time to Get Started

TORONTO, April 30, 2021 /CNW/ — AirSprint Inc., the Canadian authority in Fractional Jet Ownership, has published a new white paper examining business aviation’s future and key considerations when exploring a pilot career with this alternative to commercial aviation. ‘Your Future In Private Aviation: What to expect from a career in business aviation and why now is the perfect time to get started’ provides information, career case studies and salary ranges to help educate future pilots about the world of private aviation.

With the plethora of bad news stories from the commercial aviation sector, seeds of doubt have been planted for pilots and travellers alike. If there’s one thing industry experts agree upon, it’s that aviation is a cyclical business. Its highs and lows have been tied to significant world events throughout history, and it has suffered or prospered accordingly. And as commercial aviation plans its eventual recovery from the COVID-19 pandemic, private aviation is already filling the void.

“Currently, we have a tale of two stories. On the one hand, airlines have become less appealing as people look for safer travel alternatives due to COVID-19,” said James Elian, President & CEO of AirSprint. “On the other, airlines have contracted, decreasing frequency and cutting routes – essentially driving people to investigate private aviation.”

For those considering a career as a pilot or other aviation professional, the outlook is bright for private aviation. The sector offers stable employment, steady advancement, and diverse flying experiences. “Job security is remarkable at AirSprint. I’ve been through the slowdown of the late 2000s, and now COVID. Job security is not on my mind, and that is exclusive to this company,” said David Brickell, Embraer Praetor 500/Legacy 450 Captain with AirSprint.

Without doubt, aviation is a cyclical business, and the next upswing is already underway – led by private aviation. It’s a good time to get on board.

About AirSprint
AirSprint Private Aviation is a privately held company with offices in Toronto, Montréal and Calgary. AirSprint maintains the largest fractional fleet of private aircraft in Canada, a jet collection of Embraer Praetor 500s, Embraer Legacy 450s, Cessna Citations CJ3+ and Cessna Citations CJ2+. AirSprint proudly flies Canadians from coast-to-coast including service from Vancouver, Calgary, Edmonton, Winnipeg, Toronto, Ottawa, Montréal and the Maritimes. AirSprint provides discerning Canadians with a better choice for optimizing their time by enhancing the private jet ownership experience with industry leading safety standards, exceptional turn-key service and increased flexibility; everything personalized for the Owners’ individual travel needs. All at a fraction of the cost. AirSprint.com

Bombardier’s Health and Safety Practices During COVID-19 Pandemic Recognized with Prestigious Mercure Award

  • Award recognizes Bombardier’s leading Health and Safety preventive culture
  • Bombardier’s pandemic preparedness ensured its ability to keep employees and other stakeholders safe while continuing to operate
  • Bombardier further contributing to curb the COVID-19 pandemic through the YUL vaccination hub with ADM Aéroports de Montréal, Air Canada and Biron Health Group

MONTRÉAL, April 30, 2021 (GLOBE NEWSWIRE) — Bombardier today announced it has been selected by the Fédération des chambres de commerce du Québec (FCCQ) as one of the Grand Laureate winners of the 2021 Mercure Award in the Health and Safety category. This year, the winners of one of the most prestigious business contests in Quebec, Les Mercuriades, were honoured during a live virtual ceremony (in French only) on April 29, 2021.

Bombardier was awarded a 2021 Health and Safety Mercure for its innovative health and safety program. At the outset of the pandemic in 2020, Bombardier adapted quickly and proactively to put rigorous preventive safety measures in place to protect its employees and its operations. In addition to working from home protocols for office staff, Bombardier also implemented physical distancing practices through the use of “work bubbles” for essential employees supporting the continuing manufacture and customer delivery of business aircraft. Other measures included extensive training, testing trailers set up at all of its manufacturing sites, physical distancing protocols, tool disinfecting stations, and personal protective equipment (PPE) requirements among others – all of which ensured the safety and well-being of Bombardier’s employees and operations. As a result, the company’s entire prevention program benefited from a greater focus on health and safety.

“We are very proud that this important award recognizes our health and safety program,” said Paul Sislian, Executive Vice President, Operations and Operational Excellence, Bombardier. “Given the extraordinary circumstances surrounding the pandemic, this award is a testament to the resilience and innovative spirit that is embedded in the Bombardier DNA. I commend the work and collaboration that took place between the public health system, our unions and our dedicated employees, which helped us to strengthen our HSE leadership within the aviation industry.”

This prestigious award adds to Bombardier’s track record of excellence and innovation, as the company continues to be an industry leader in preventive culture and occupational health and safety.

As part of Bombardier’s effort to support the Public Health strategy, it was also announced recently that the company was partnering with Montreal’s aviation community and actively contributing to the vaccination drive in Quebec with the creation of the YUL vaccination hub in collaboration with ADM Aéroports de Montreal, Air Canada and Biron Health Group. Starting in May, Bombardier is dedicating one of its hangars located in Dorval, Quebec, as a vaccination site, while providing logistics expertise and resources to speed up mass vaccination in the workplace.

About Bombardier
Bombardier is a global leader in aviation, creating innovative and game-changing planes. Our products and services provide world-class experiences that set new standards in passenger comfort, energy efficiency, reliability and safety.

Headquartered in Montréal, Canada, Bombardier is present in more than 12 countries including its production/engineering sites and its customer support network. The Corporation supports a worldwide fleet of approximately 4,900 aircraft in service with a wide variety of multinational corporations, charter and fractional ownership providers, governments and private individuals.

Transat stock soars after winning $700 million in government aid

From the Financial Post – link to source story

Will use a portion of the funds to reimburse customers whose travel plans had to be cancelled

Bloomberg News, Sandrine Rastello  •  Apr 29, 2021

Air Transat aircraft sit on the tarmac at Toronto Pearson International Airport.
Air Transat aircraft sit on the tarmac at Toronto Pearson International Airport. PHOTO BY COLE BURSTON/BLOOMBERG FILES

Transat AT Inc., the Montreal-based vacation operator that Air Canada gave up trying to buy earlier this month, obtained $700 million (US$570 million) in emergency aid from the Canadian government to stay afloat during the pandemic.

The company took loan facilities of $390 million for operations and another $310 million to finance customer refunds for flights canceled during the pandemic. Transat will also issue 13 million warrants to the government to buy shares at $4.50 each.

Transat shares jumped on the news, rising as much as 13 per cent in Toronto, before paring some of the gains. They were up 4.4 per cent to $4.73 as of 12:59 p.m.

The deal follows a $5.9-billion rescue package for Air Canada two weeks ago, reflecting Prime Minister Justin Trudeau’s case-by-case approach in supporting the industry. It helps Transat, which announced the suspension of all regular flights on Jan. 29, buy some time in the hope that COVID-19 vaccinations can salvage the summer travel season.

“With this support, we now look forward to resuming operations as soon as safe travel is possible and travel restrictions can be lifted,” Chief Executive Officer Jean-Marc Eustache said in a statement. “We will then be able to implement our plan to make Transat a solid and profitable company once again, one that will continue to symbolize leisure travel for its many customers in Quebec and elsewhere.”

Unlike the Air Canada bailout, the government isn’t buying shares right away. Transat Chief Financial Officer Denis Petrin told journalists that wasn’t on the table during negotiations. But the warrants may still mean dilution of as much as 25 per cent for existing shareholders.

The government doesn’t get all the warrants immediately. They’ll vest as the company draws down the loans. If Transat can repay the money in full in the first year, half of the warrants will be cancelled.

Still, Transat would like to improve its borrowing costs and is planning to seek help from the Quebec government, which wanted to see federal aid come first before intervening, executives said.

Peladeau offer

Canada has barred most foreign travellers from entering the country since last March and has quarantine rules for non-essential workers. Transat, which sells vacation packages to Canadians visiting sun spot destinations in winter and European cities in summer, was hit particularly hard in January when Trudeau asked carriers to halt travel to Mexico and the Caribbean to slow the spread of new variants of the virus.

The plan includes restrictions on dividends, stock repurchases and executive compensation and a pledge to keep active employment at current levels. It comes in addition to $120 million in existing credit facilities.

As of April 22, government financing for the airline industry globally, including loans and equity stakes in exchange for cash, has totalled more than $189 billion, according to Ishka Ltd., a London-based aviation finance and investment consultancy.

Sudbury airport gets increase to city line of credit for post-pandemic planning

From CBC News – link to source story

‘We wanted to be prepared … our recovery could be long and tedious,’ airport CEO says

CBC News · Apr 29, 2021

The COVID-19 pandemic has put pressures and constraints on the Greater Sudbury Airport. Council has approved the airport’s request for a line of credit increase. (www.flysudbury.ca)

The Greater Sudbury Airport is preparing for change, once the pandemic is over and people start travelling again.

The development corporation that oversees the northern Ontario airport was approved by city council for a $5-million line of credit increase, bringing its total to $12.5 million.

Airport chief executive officer Todd Tripp told Sudbury city council Tuesday night that COVID-19 has added operational pressures.

“We just want to be prepared as we believe that we are a key economic driver for the city of Sudbury and the Greater Sudbury region,” he said.

Todd Tripp, CEO of the Greater Sudbury Airport, says the line of credit increase will help it deal with any uncertainty once travel picks up. (Casey Stranges/CBC)

The airport’s original borrowing limit was $7.5 million, meant for capital improvements and expansion projects. Although that total hasn’t been used up, according to Tripp, the $5-million approval will provide a cushion.

“We’re uncertain as to what industry is going to ask of us coming out of COVID, for the aviation industry,” he said. 

“We wanted to be prepared because we believe — and as some of the experts in the industry have said — our recovery could be long and tedious for us to come out of this.”

Preparing for unknown

Some modifications have already been made to the airport terminal to keep travellers safe, but Tripp is unsure what more will have to be done once travel picks up. 

“Some experts, if you can believe them, they’re saying that the pent-up demand to travel is going to be quite severe, especially in the leisure market.

“We may need these dollars to prepare our terminal building for a greater onslaught than we saw before,” he told councillors.

Ed Stankiewicz, executive director of finance, assets and fleet, told council the airport funds would not impact the city’s financial position, as it would come from the investment portfolio.

Other travel needs met

The Greater Sudbury Airport has kept going with essential travel, private flights and other services, despite the pandemic. 

“We also have been maintaining a full-on service and supporting of the medical facilities in Sudbury with bringing in new patients and everything else through the airport,” said Tripp.

“We’ve also had increased cargo, as many people have been buying online through Amazon and others.”

The airport has not received any government relief over the past year, but is awaiting responses to federal funding applications.

YQB reveals its 2020 financial results – Remaining steady through the storm

QUÉBEC CITY, April 29, 2021 /CNW Telbec/ – The airline industry is certainly one of the most vulnerable, and the financial results released by Québec City Jean Lesage International Airport (YQB) today do reflect the harsh consequences of the pandemic. However, they also reflect the hard work of its teams and their determination to transform the pandemic into a lever for growth and repositioning.

Despite reducing its fixed costs by one third, YQB will have absorbed losses of $26.7 million in 2020; it estimates that those losses will amount to some $100 million by the time it returns to profitability. In terms of passenger traffic, the reality proved even more brutal than the worst-case forecast. YQB ended 2020 with a total of 535,111 passengers, compared to 1,789,005 in 2019. What’s more, the airport authority predicts that passenger levels will actually hit rock bottom in 2021, when barely 100,000 passengers are expected to pass through the airport’s doors. Based on forecasts by industry experts, traffic at YQB likely won’t return to 2019 levels for at least five years.

“This pandemic has clearly affected every area of our business. The airport has needed to tighten its belt and make difficult decisions. It’s true that we have little control over our industry’s trajectory as we emerge from the global pandemic. However, we were—and are—in the best position to think about how we can emerge from this ordeal stronger than ever, equipped with levers to generate growth,” stated Lise Lapierre, outgoing Chair of YQB’s Board of Directors.

Bouncing forward
Last December, YQB unveiled a plan to revive airport operations and diversify its activities and revenues while strengthening its role as a driver of regional economic development. This plan, which is based on five key projects, has the potential to strengthen and improve the economy of not just the Québec City area, but all of northern and eastern Québec. The five key projects involve:

  1. Optimizing the catchment area
  2. Consolidating regional air services
  3. Setting up an intermodal logistics platform
  4. Developing an airport industrial park
  5. Opening an American Customs pre-clearance centre

“The air transportation industry is probably one of the hardest hit by the current crisis. We were the first to be grounded and will likely be the last to take off again. In the meantime, we are working tirelessly to prepare for recovery so that our airport can quickly regain the momentum that was so abruptly brought to a halt. Until we know when recovery will be possible, we will be actively working on the how,” added President and CEO Stéphane Poirier.

During the airport’s annual general meeting (AGM), the Board of Directors nominated former Vice-Chair André Boulanger as the new Chair. Mr. Boulanger has been a director since 2019. He is replacing Ms. Lapierre, the first woman to hold the position, as she has completed the last of the three terms permitted by the governance rules. YQB would like to sincerely thank Ms. Lapierre for her unwavering dedication and attention to detail.

“Over the past year, our organization has been doing everything in its power to turn challenges into opportunities. We rolled up our sleeves in 2020 to ensure we had a successful recovery plan for our region, and the coming months will be critical to ensure that the plan is funded and comes to fruition. We will need to continue relying on teamwork and the region’s driving forces to support a sustainable recovery,” concluded Mr. Boulanger.

Highlights

  • 70% decrease in passenger traffic in 2020 (535,111 passengers compared to 1,789,005 passengers in 2019)
  • Barely 100,000 passengers expected at YQB in 2021
  • At least five years needed to reach 2019 passenger traffic levels
  • 59.7% decrease in revenues in 2020, resulting in a $26.7M deficit
  • Losses expected to reach $100M before profitability is restored

About Québec City Jean Lesage International Airport (YQB)
YQB is managed by Aéroport de Québec Inc., a non-profit, non-share capital corporation responsible for the airport’s management, operation, maintenance, and development since November 1, 2000. Around a dozen carriers offer flights from YQB to destinations in North America, Central America, the Caribbean, Mexico, and Europe, and daily flights to the main hubs in eastern North America.

Transat offers refunds for travel credits issued due to COVID-19

MONTREAL, April 29, 2021 /CNW Telbec/ – Transat is pleased to announce that a funding agreement with the Canada Enterprise Emergency Funding Corporation (CEEFC) now allows it to offer refunds to travellers who were issued a travel credit due to COVID-19 for a trip scheduled to start on or after February 1, 2020. This policy applies to flights and packages booked by April 29, 2021. Going forward, should Transat make changes to its flight program, affected customers would also be eligible for a refund.

“We’ve been impatiently waiting for this moment, and we know our customers have been, too,” says Annick Guérard, Chief Operating Officer of Transat. “Now that a funding agreement has been reached and the eligibility criteria have been established by the Government of Canada, we are delighted to be able to provide our customers with this long-awaited aid.” 

Among the parameters set by government authorities, those who have a travel credit must submit their refund request to Transat by August 26, 2021. This is why they are invited to complete the request form available at airtransat.com/refunds as soon as possible. If they originally booked with a travel agent or online travel agency, they should contact them directly.

“Travel agents have shown unwavering resilience and support since the crisis began,” adds Guérard. “That’s why we’re pleased to confirm that commissions earned by agents will not be recalled if their customers opt for a refund.”

Customers and travel agents are invited to visit airtransat.com/refunds to consult our frequently asked questions or learn about the refund eligibility criteria.

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. The Corporation is based in Montréal (TSX: TRZ).

Recent distinctions and awards

  • World’s Best Leisure Airline at the Skytrax World Airline Awards
  • Ranked 2nd in the Travel and Leisure category and 57th overall on Forbes World’s Best Employers list
  • Best Tour Operator and Favourite Overall Supplier at the Agents’ Choice Awards presented by Baxter Travel Media

Voyageur Aviation awarded contract to upgrade Canada’s National Aerial Surveillance Program (NASP) fleet

HALIFAX, NS, April 29, 2021 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) is proud to announce that its subsidiary, Voyageur Aviation Corp. (‘Voyageur’), has been awarded a 3-year contract to upgrade and modify Transport Canada’s National Aerial Surveillance Program (NASP) fleet of three Dash 8-100 and one Dash 7 aircraft with new surveillance equipment.

Since 1991, the iconic red planes of NASP have played an integral role in keeping our country safe by helping prevent pollution in Canadian waters, protecting the marine environment and endangered marine life, and ensuring a safe and efficient transportation industry along Canada’s massive and varied coastlines.

The contract involves the entire NASP fleet and includes the installation of surveillance equipment provisions for an electro-optical and infrared (‘EO/IR’) sensor, infrared and ultraviolet (‘IR/UV’) scanner for pollution monitoring, observation windows, mission crew seats, and other modifications to existing system installations. Additionally, one Dash 8-100 aircraft will receive Voyageur’s Long-Range Fuel System installation to enable missions requiring significant range and endurance.

“This contract demonstrates Voyageur’s unique engineering capabilities to support customers requiring innovative special mission solutions.” said Scott Tapson, President, Voyageur. “We are excited to expand our relationship with Transport Canada and look forward to working together on this project.”

All work for this contract will be completed at Voyageur’s 200,000 square foot maintenance and engineering facility located at its company headquarters in North Bay, Ontario.

About Voyageur Aviation Corp.

Voyageur Aviation Corp. is a wholly-owned subsidiary of Chorus Aviation Inc. Voyageur is an integrated provider of specialized aviation services, including contract flying operations both internationally and domestically, and offers advanced engineering and maintenance capabilities. Headquartered in North Bay, Ontario, Voyageur delivers innovative solutions to customers with unique aviation requirements and operates under the core principles of comprehensive safety management, quality assurance, and client-dedicated solutions.   www.voyav.com

About Chorus Aviation Inc.

Chorus is a global provider of integrated regional aviation solutions. Chorus’ vision is to deliver regional aviation to the world. Headquartered in Halifax, Nova Scotia, Chorus is comprised of Chorus Aviation Capital – a leading, global lessor of regional aircraft, and Jazz Aviation and Voyageur Aviation – companies that have long histories of safe operations with excellent customer service.  Chorus provides a full suite of regional aviation support services that encompasses every stage of an aircraft’s lifecycle, including aircraft acquisitions and leasing; aircraft refurbishment, engineering, modification, repurposing and preparation; contract flying; and aircraft and component maintenance, disassembly, and parts provisioning.

Transat secures $700 million in funding from the Government of Canada

Refund process of trips cancelled due to the pandemic to begin immediately

MONTRÉAL, April 29, 2021 /CNW Telbec/ –  Transat A.T. Inc. (“Transat” or the “Corporation“) announced today that it has reached an agreement with the Government of Canada to borrow up to $700 million in additional liquidity through the Large Employer Emergency Financing Facility (LEEFF).

“The agreement reached with the Government of Canada provides us with an additional $700 million in liquidity, which is the amount we needed to move forward with confidence. Our strong balance sheet prior to the pandemic and the aggressive actions we have taken since have enabled us to weather this unprecedented crisis so far. With this support, we now look forward to resuming operations as soon as safe travel is possible and travel restrictions can be lifted. We will then be able to implement our plan to make Transat a solid and profitable company once again, one that will continue to symbolize leisure travel for its many customers in Quebec and elsewhere,” declared Jean-Marc Eustache, President and Chief Executive Officer.

“The funds obtained will also enable us to reimburse our customers whose travel had to be cancelled due to the pandemic under conditions that are sustainable for the company, which we welcome.”

The new fully repayable credit facilities made available by the Canada Enterprise Emergency Funding Corporation under the Large Employer Emergency Financing Facility, which Transat would use only on an as-needed basis, are as follows:

  • An amount of $390 million, representing the liquidity needed to support Transat until its business has recovered to a level where it can generate cash once again, broken down as follows:
    • An amount of $78 million in the form of a non-revolving and secured credit facility bearing interest at CDOR (Canadian Dollar Offered Rate) plus 4.5% and maturing in 2 years; the facility is secured by a first-ranking charge on the assets of Transat A.T. Inc.
    • A $312 million non-revolving and unsecured credit facility with a 5-year maturity, loaned at a rate of 5% in the first year, increasing to 8% in the second year, and by 2% per annum thereafter, with the possibility of capitalization of interest in the first two years.
    • In the context of the financing arrangement, Transat issued a total of 13,000,000 warrants for the purchase of an equivalent number of shares of Transat (subject to certain limitations described below), with customary adjustment provisions, at an exercise price of $4.50 per share (representing the volume-weighted average trading price for the five trading days preceding the issuance of the warrants) over a 10-year period, representing 18.75% of the total commitment available under the above non-revolving and unsecured credit facility. The warrants are to vest in proportion to the drawings that will be made, and 50% would be forfeited if the loan were to be repaid in full in the first year.
  • An amount of $310 million consisting of an unsecured credit facility to provide reimbursement to travelers who were scheduled to depart on or after February 1, 2020, for whom a travel credit was issued as a result of COVID–19. This amount is repayable over a 7-year term and is loaned at the current 7-year Canada Bond rate of 1.2%.

The number of shares issuable upon exercise of the warrants may not exceed 25% of the current number of issued and outstanding shares, nor may it result in the holder owning 20% or more of the outstanding shares upon exercise of the warrants. In the event of an exercise of warrants that surpasses these thresholds, the excess will be payable in cash on the basis of the difference between the market price of Transat’s shares and the exercise price. Finally, in the event that the credit facility is repaid in full by its maturity, Transat will have the right to redeem all of the warrants for a consideration equal to their fair market value. The warrants will not be transferable prior to the expiry of the period giving rise to the exercise of such redemption right. In addition, the holder of the warrants will benefit from registration rights to facilitate the sale of the underlying shares and the warrants themselves (once the transfer restriction has been lifted).

In connection with the establishment of these credit facilities, Transat has made certain commitments, including:

  • The reimbursement of travelers who were scheduled to depart on or after February 1, 2020, to whom a travel credit has been issued due to COVID-19. Refunds will begin immediately, with terms to be communicated separately. As per the agreement, to be eligible, customers will need to expressly indicate their desire for a refund;
  • Restrictions on dividends, stock repurchases and executive compensation;
  • Maintaining active employment at the level of April 28, 2021.

In addition to the new funding, the amounts already drawn on the existing facilities will remain in place and will be extended for a period of two years from the implementation of the new financing. The ratios applicable to the existing facilities will be suspended for a period of 18 months. The undrawn credit under the short-term subordinated facility will be cancelled.

In total, the available financing will therefore represent a maximum of $820 million. This includes the newly issued LEEFF funding, as well as existing funding of $120 million divided into $50 million under the secured revolving credit facility with National Bank of Canada and the Bank of Nova Scotia and $70 million under the subordinated credit facility with National Bank of Canada and Export Development Canada.

If all of the available facilities were to be used, it would be at an average rate of approximately 6%, plus the warrants.

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. The Corporation is based in Montréal (TSX: TRZ).