End of the discussions for the acquisition of Transat

MONTRÉAL, June 21, 2021 /CNW Telbec/ – Transat A.T. Inc. (“Transat” or the “Corporation”) announces today that the ongoing discussions with Mr. Pierre Karl Péladeau concerning the potential acquisition of all of the shares of Transat through his company Gestion MTRHP inc. (“MTRHP”) have ended.

On April 7, 2021, Mr. Péladeau delivered to Transat a non-binding proposal contemplating a transaction pursuant to which MTRHP would acquire all of the shares of Transat for a consideration of $5.00 per share, payable in cash. Considering the current share price, the price offered no longer provides a reasonable basis to envision receiving the level of shareholder approval required in order to allow the transaction to proceed. Accordingly, MTRHP confirmed to the Corporation that it was withdrawing from the discussions.

In light of the foregoing, the work of the special committee charged of reviewing strategic alternatives will cease, and Transat intends to focus its efforts on the implementation of its strategic plan and on the upcoming restart of its operations and flights, on July 30.

As contemplated in its strategic plan, the outline of which was revealed publicly on June 10, Transat also intends to examine possibilities to optimize its financing structure, which could include the issuance of shares of its capital or bond financing on more favorable terms than those attached to a portion of the liquidities made available to Transat under the Large Employer Emergency Financing Facility (LEEFF).

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.

Canadian airlines return to Puerto Vallarta after 4-month hiatus

From Mexico Daily News – link to source story

Puerto Vallarta and the Riviera Nayarit are looking forward to the Canadians coming back. Puerto Vallarta and the Riviera Nayarit are looking forward to the Canadians coming back.

Canadian airlines return to Puerto Vallarta after 4-month hiatus

One airline has already reactivated flights, and three more have confirmed dates

Published on Thursday, June 17, 2021

Canadian airlines are reactivating flights to Puerto Vallarta after a four-month suspension.

Westjet reinitiated its flights to the Jalisco beach destination on June 5, and Air Canada will be next with the reopening of its Vancouver route on August 1.

Low cost airline Swoop plans to restart its Hamilton and Edmonton flights October 5, and its Abbotsford and Toronto routes on November 3. It will also inaugurate a new route from Winnipeg on November 4.

Transat will relaunch flights from Toronto and Montreal in November.

Sunwing is still yet to inform clients of its plans to reopen, but has previously announced it hopes to reestablish its Mexico routes in December.

Marc Murphy, lead of the Riviera Nayarit Visitors and Conventions Office, said Canadians would be happy for the change of climate. “Each year, thousands of Canadians travel to this region to escape the intense winter cold and find an enviable climate, the most beautiful beaches … and a great quality hotel offering,” he said.

With reports from Reportur

Air Transat unveils its winter 2021-22 program

Nearly 50 destinations on three continents will be offered, including two new ones: Miami and Fort Myers

MONTREAL, June 16, 2021 /CNW/ – Air Transat is proud to present its winter 2021-22 flight program. Starting November 1, it will offer flights to nearly 50 destinations throughout the CaribbeanMexicoCentral and South Americathe United States and Europe.

This program also features two new destinations in Florida—Miami and Fort Myers, with direct flights from Montreal—in addition to flights already scheduled for Fort Lauderdale and Orlando.

“We know that our clients are eager to travel, whether it’s to visit loved ones or for a change of scenery,” says Annick Guérard, President and CEO of Transat. “And we are sure to meet this strong, pent-up demand with the rich variety of destinations we are offering this winter. Plus, by adding Miami and Fort Myers to our program, we are consolidating our position in the United States, a popular sun destination for Canadian travellers.”

Starting December 2021, Air Transat will fly to Miami four times a week, and to Fort Myers twice a week.

Flights to three continents this winter

To quench Canadians’ wanderlust, direct flights will be offered from eight Canadian cities: Montreal, Quebec City, Toronto, Ottawa, Hamilton, London, Halifax and Moncton.

In addition to flights to the South, Air Transat will also offer vacationers a selection of South packages, featuring 290 properties and four collections: LuxuryOut of OfficeFamily and Solo.

From Montreal, Air Transat will operate direct flights to Colombia, Costa Rica, Cuba, the Dominican Republic, Guadeloupe, Haiti, Honduras, Jamaica, Mexico, Martinique, Panama, Puerto Rico, St. Maarten, El Salvador and the United States.

Travellers from Toronto will be able to fly direct to Colombia, Costa Rica, Cuba, the Dominican Republic, Honduras, Jamaica, Mexico, Panama, St. Maarten and the United States.

From Quebec City, seven sunny destinations will be accessible by direct flight to Cuba, the United States, Mexico and the Dominican Republic.

And lastly, to allow Canadians to travel across their country and to increase connecting opportunities to international destinations, Air Transat will also operate domestic flights between Montreal, Quebec City, Toronto and Vancouver.

As for Europe, Air Transat will gradually offer direct flights from Montreal to France, Portugal, Spain and Italy. There will also be direct flights from Toronto to the United Kingdom, Portugal, the Netherlands, Ireland and Italy, and from Quebec City to France.

It is important to note that, should the situation change and force the company to alter its flight schedule, clients affected by cancellations would be eligible for a refund.

For travel inspiration and details on routes offered, travellers are invited to visit the dedicated page on the Air Transat website.

About Air Transat

Air Transat is Canada’s number one leisure airline. It flies to some 60 international destinations in more than 25 countries in the Americas and Europe, offers domestic and connecting flights within Canada, and carries some 5 million passengers every year. Air Transat is a business unit of Transat A.T. Inc., a leading integrated international tourism company specializing in holiday travel and offering vacation packages, hotel stays and air travel. Transat was awarded Travelife certification in 2018 in recognition of its commitment to sustainable development. Its head office is located in Montreal.

Recent distinctions and awards

  • World’s Best Leisure Airline at the Skytrax World Airline Awards
  • Ranked 2nd Travel and Leisure Company 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

Many Canadian airline customers still awaiting refunds for flights cancelled amid pandemic

From The Globe and Mail – link to source story

ERIC ATKINS, TRANSPORTATION REPORTER | JUNE 13, 2021

Canada’s airlines gave credits – rather than cash back – to customers whose uninsured tickets were cancelled in the pandemic. FRED LUM/THE GLOBE AND MAIL

More than a year into the pandemic, some Canadian airline customers are still awaiting refunds on cancelled flights.

Unlike their global rivals, Canada’s airlines gave credits – rather than cash back – to customers whose uninsured tickets were cancelled in the pandemic. The airlines pointed to a statement from the Canadian Transportation Agency that said credits were an acceptable remedy given the financial hardships the airlines faced in the pandemic.

Financial aid from taxpayers unveiled by the government in April allowed Air Canada and Transat AT Inc. to give refunds for flights and tickets cancelled beginning in mid-March, 2020, when countries closed borders, told people not to travel to limit the spread of COVID-19 and imposed quarantines on people returning from abroad.

Canada’s airlines halted flights, cancelling billions of dollars worth of airfares.

But Porter Airlines and Sunwing Airlines have still not offered refunds for most cancelled flights, and WestJet Airlines has restricted its refunds to tickets the airline cancelled – not the customer.

The three airlines and government say bailout talks are taking place, but will not say when agreements will bereached, nor when customers will get their money back.

WestJet has said it would not take a government loan, but might agree to a government-backed line of credit that would pay for refunds, according to a person familiar with the matter whom The Globe and Mail is not naming because they are not authorized to speak publicly on the matter.

Margaret Jones of River John, N.S., is waiting for a refund worth $4,630 for a Sunwing Vacations trip she had planned to take with her husband in March, 2020. The trip included a Sunwing flight from Halifax to Montego Bay, Jamaica, and several days aboard a cruise ship.

She has a credit for the amount of the trip, but prefers to get her money back as she has no plans to travel. “My husband’s not in the greatest of health,” Ms. Jones said in a phone interview. “He’s 84 and I’m 78 – we definitely don’t want to go on a cruise in the future, and if we take a vacation we don’t want to go to a resort that is full of people from all over the world and you don’t know whether they have had vaccinations.”

Sunwing received a government loan worth as much as $375-million in February through a pandemic program called the Large Employer Emergency Financing Facility (LEEFF) – the same program Air Canada and Transat tapped to provide refunds to their customers.

But rather than offer refunds, the government allowed Sunwing to hold money in an account from customers whose flights were cancelled “until a policy is established for the treatment of these prepaid amounts,” the government said in February.

“Sunwing supposedly has all this money in an account somewhere – gaining interest, no doubt – and supposedly will be returning it at some point, but what we all need to know is: When?” Ms. Jones said. “We’re fed up with waiting.”

Sunwing spokesperson Melanie Filipp said talks with the government are continuing. “We look forward to continuing discussions on the issue of refunds for customers with non-refundable bookings who have received a future travel credit amid the pandemic,” she said.

Katherine Cuplinskas, a spokesperson for Finance Minister Chrystia Freeland, declined to comment on talks with Sunwing, Porter and WestJet, or when aid packages could be announced. Ms. Kuplinskas reiterated the government’s statement that any aid for airlines will come with conditions that include refunds for customers.

Brad Cicero, a spokesman for Porter Airlines, said the Toronto-based airline is in talks for a LEEFF loan, but added that details are confidential and a resolution date in unknown.

WestJet has yet to provide refunds for people who cancelled their own ticket, but in October became the first Canadian airline to offer refunds for uninsured seats on flights the carrier cancelled.

“WestJet took this step without having received government support, unlike many of our global competitors,” WestJet spokesperson Morgan Bell said.

Taxpayers gave Air Canada a loan worth as much as $1.4-billion to provide customer refunds, part of a $5.9-billion government bailout the airline received. The airline said on June 10 that 40 per cent of 1.8 million eligible customers had applied for a refund.

Transat received a government bailout worth $700-million, $310-million of which is to pay for refunds. Annick Guérard, Transat’s chief executive officer, said on June 10 that customers have applied for 64 per cent of the total amount.

Transat’s decision to withhold refunds and offer credits until the government provided a loan was necessary for the health of the airline, which has not flown since January, “but not one that we have made with a light heart,” Ms. Guérard said.

Transat continues takeover talks with Pierre-Karl Peladeau as losses mount

From The Globe and Mail – link to source story

Eric Atkins, Transportation Reporter | June 10, 2021

Transat AT Inc. said it lost $69-million in the three months ending April 30, or $1.84 a share. Bloomberg/Getty Images

Tour operator Transat AT Inc. TRZ-T +2.64%increase is pursuing takeover talks with Pierre-Karl Peladeau as the airline’s losses pile up amid a halt to operations that has reached the fifth month.

Montreal-based Transat said on Thursday morning it lost $69-million in the three months ending April 30, or $1.84 a share. For a quarter in which Transat’s planes were grounded, revenue fell by 98.7 per cent to $7.6-million.

The airline halted flights at the end of January after the federal government called for an end to service to Mexico and the Caribbean and imposed new travel restrictions.

“Following a quarter without revenues, progress made on vaccinations allows us to plan for a gradual resumption starting July 30,” said Annick Guérard, who in May replaced retiring founder Jean-Marc Eustache as Transat’s chief executive officer.

Ms. Guerard takes charge at a low point in Transat’s history. The pandemic halted its operations and sent plunging the value of Air Canada’s AC-T -1.29%decrease proposed takeover to $190-million from $720-million. The two airlines agreed in April to abandon the deal after the European regulator signalled it was unlikely to approve it.

Gestion MTRHP Inc., an investors group led by Mr. Peladeau, has made a cash offer to buy Transat for $5 a share. The talks are continuing, Transat said on Thursday, and might not lead to a deal.

Mr. Peladeau on May 13 said he had ended talks to buy Transat after his offer was dismissed by shareholder Letko Brosseau and Associates as too low. A spokeswoman for Mr. Peladeau declined to comment on Thursday.

Transat shares traded at about $5.70 on Wednesday on the Toronto Stock Exchange.

Meanwhile, the company said it has secured enough financing to restart its operations, but will take steps to slash costs, including terminating its hotel division and ending leases on three aircraft.

On a conference call with analysts on Thursday, Ms. Gerard laid out Transat’s “prudent” restart for the airline, adding routes gradually to capitalize on demand from travellers visiting families and friends.

She said shedding planes and the expected sale of the Mexican hotel property will leave Transat a simpler company focused on leisure air travel that enable it to be profitable with less revenue.

She said Air Transat will focus on Eastern Canada – Montreal in particular – and flights to the United States, as it builds a network fed by domestic connections to the western provinces while maintaining international destinations and alliances with other carriers. The airline has pared its fleet to two models from four, the Airbus A330 and A321, simplifying operations and reducing costs.

Transat will no longer lease seasonal planes in the winter, and will make more use of the aircraft it owns.

“It’s an exciting time for me to take over at Air Transat,” Ms. Guerard said.  “We have a solid plan for that. We have the team for it. And now we have the financing.”

Ms. Guerard expressed optimism demand for air travel will recover to 2019 levels more quickly than the industry forecast of 2024 or 2025. But 2022 will be another difficult year for Transat, Ms. Guerard said. “After that, we will be able to come back … and look for profitability.”

Benoit Poirier, a stock analyst at Desjardins Financial, said Transat’s slow restart means it will not benefit from any recovery in demand for air travel until late in 2021.

Transat has accepted a taxpayer bailout worth as much as $700-million, a deal that lets it refund $310-million in airfares for flights cancelled in the pandemic while allowing the federal government to own as much as 20 per cent of the company. Transat said it has drawn $220-million of a total available $820-million financing, and has $346-million in cash and equivalents.

Transat has idled more than 4,000 of its 5,000 employees and said it will continue to collect federal wage subsidies.

Porter Airlines and Sunwing Airlines have also grounded their planes in the pandemic, which caused the global industry to post deep losses amid travel bans and closed borders.

Peter Letko, vice-president of Letko Brosseau and Associates, Transat’s largest shareholder, said restarting an airline is an expensive, time-consuming venture that must be done carefully to ensure profitability.

“I think the challenge for all airline executives now is moving back toward some normalcy as people get vaccinated and they start to reactivate their business,” Mr. Letko said by phone. “My hat’s off to them – this is a big challenge. Get your pilots ready, the equipment, all the support staff including those on board and the whole chain of people that supply an airline. It’s a huge job.”

Mr. Letko has for years pushed underperforming Transat to boost profits by charging more for airfares, while urging management to turn away takeover offers he sees as too cheap. In April, he dismissed as too cheap the takeover from Mr. Péladeau.

Transat A.T. Inc. – Results for second quarter of 2021

Operations scheduled to resume on July 30 following a quarter without revenues

Transat now has the financing to implement its recovery plan

For the second quarter:

  • Revenues of $7.6 million
  • Adjusted operating loss1 of $51.0 million (operating loss of $86.5 million)
  • Adjusted net loss3 of $103.3 million (net loss attributable to shareholders of $69.6 million)

Financial position and financing:

  • Cash and cash equivalents of $346.1 million as at April 30
  • Agreement entered into with the Government of Canada for borrowing up to $700.0 million in additional liquidity, of which $310.0 million can be used to refund customers
  • Maturity for amounts drawn on existing facilities extended until April 29, 2023.
  • In total, the available financing will therefore represent a maximum of $820.0 million, of which $220.0 million was drawn as at April 30, 2021.

Resumption of operations:

  • Airline operations suspended since January 29, 2021
  • Partial resumption planned for July 30, 2021

Transaction

  • Termination of the arrangement with Air Canada by mutual consent
  • Implementation of strategic plan and continuing discussions with Gestion MTRHP

MONTRÉAL, June 10, 2021 /CNW Telbec/ – Transat A.T. Inc. (“Transat” or the “Corporation”), one of the largest integrated tourism companies in the world and Canada’s holiday travel leader, announces its results for the second quarter ended April 30, 2021.

“Following a quarter without revenues, progress made on vaccinations allows us to plan for a gradual resumption starting July 30. We hope that a safe travel recovery plan can be deployed as soon as possible and will lead to a lifting of restrictions in the near future. All indications are that our customers are eager to make use of some of their savings from recent months to travel. We’re excited about welcoming them back soon,” stated Annick Guérard, President and Chief Executive Officer, Transat.

“The financing we secured will allow us to roll out our plan over the coming years. Our strong brand, our employees’ commitment and the transformation we have undertaken and which will continue over the coming years will allow us to position ourselves again as our customers’ favourite leisure travel company and become more profitable than before the pandemic,” she added.

The global air transportation and tourism industry has faced a collapse in traffic and demand. Travel restrictions, uncertainty about when borders will reopen, both in Canada and at certain destinations the Corporation flies to, the imposition of quarantine measures and testing requirements both in Canada and other countries, as well as concerns related to the pandemic and its economic impacts are creating significant demand uncertainty, at least for fiscal 2021. For the first half of winter 2021, the Corporation rolled out a reduced winter program. On January 29, 2021, following the Canadian government’s request to not travel to Mexico and the Caribbean, and the introduction of new quarantine measures and COVID-19 testing requirements, the Corporation announced the complete suspension of all its regular flights and the repatriation of its clients to Canada. The Corporation currently expects to resume its operations on July 30. The Corporation cannot predict all the impacts of COVID-19 on its operations and results, or precisely when the situation will improve. The Corporation has implemented a series of operational, commercial and financial measures, including new financing and cost reduction measures, aimed at preserving its cash. The Corporation is monitoring the situation daily to adjust these measures as it evolves. However, until the Corporation is able to resume operations at a sufficient level, the COVID-19 pandemic will have significant negative impacts on its revenues, cash flows from operations and operating results. While the availability of a vaccine makes it possible to hope for the resumption of operations at a certain level during 2021, the Corporation does not expect such level to reach the pre-pandemic level before 2023.

Preserving cash is a priority for the Corporation; with respect to the COVID-19 pandemic, the Corporation has taken the actions discussed in the Overview section of the MD&A included in our 2020 Annual Report. Other opportunities are being evaluated to achieve this objective and the following additional actions in response to the COVID-19 pandemic were taken during the first half of 2021:

  • The Corporation completed its efforts to obtain long-term financing. As described in the Financial position section, the available financing therefore represents a maximum of $820.0 million, of which $220.0 million was drawn as at April 30, 2021.
  • During the quarter ended January 31, 2021, two Airbus A330s and one Boeing 737-800 were returned to lessors early.
  • The Corporation continuously adjusts its flight program as the situation evolves. Before the suspension of its airline operations on January 29, 2021, Transat offered a reduced winter program of international flights departing from Montréal, Toronto and Québec City.
  • The Corporation is negotiating with its suppliers, including aircraft lessors, to benefit from cost reductions and changes in payment terms, and is continuing to implement measures to reduce expenses and investments.
  • The Corporation is continuing to make use of the Canada Emergency Wage Subsidy (“CEWS”) for its Canadian workforce, which enabled it to finance part of the salaries of its staff still at work and to propose employees temporarily laid off to receive a part of their salary equivalent to the amount of the grant received, with no work required.
  • As at April 30, 2021, cash and cash equivalents totalled $346.1 million.

Second-quarter highlights

Since mid-March of 2020, restrictions on international travel and government-imposed quarantine measures have made travel sales very difficult. Due to the global COVID-19 pandemic, the Corporation suspended its airline operations on January 29, 2021 for the second time since March 2020. These factors caused the fall in revenues. As a result, the Corporation recognized revenues of $7.6 million during the quarter, a decrease of $563.7 million (98.7%) compared with 2020.

Operations generated an operating loss of $86.5 million compared with $29.6 million in 2020, a deterioration of $56.9 million. The decline in operating results was attributable to the suspension of airline operations for the second quarter of 2021. Despite the cost reduction measures implemented to deal with the COVID-19 pandemic, the Corporation had to maintain certain fixed costs; as a result, the fall in revenues was more pronounced than the decrease in operating expenses. Transat reported an adjusted operating loss1 of $51.0 million compared with adjusted operating income1 of $21.1 million in 2020, a deterioration of $72.1 million.

Net loss attributable to shareholders amounted to $69.6 million or $1.84 per share (diluted) compared with $179.5 million or $4.76 per share (diluted) for the corresponding quarter of last year. Excluding non-operating items, Transat reported an adjusted net loss3 of $103.3 million or $2.74 per share for the second quarter of 2021, compared with $38.8 million or $1.03 per share in 2020.

Six-month period highlights

As a result of the above factors, the Corporation experienced a significant deterioration in its performance for the winter season as a whole. For the six-month period as a whole, the Corporation recognized revenues of $49.5 million, a decrease of $1.2 billion (96.1%) compared with 2020, and operations generated an operating loss of $184.5 million, compared with $54.6 million in 2020, a deterioration of $129.9 million. Transat reported an adjusted operating loss1 of $104.6 million compared with adjusted operating income1 of $48.5 million in 2020, a deterioration of $153.1 million.

Net loss attributable to shareholders amounted to $130.1 million or $3.45 per share (diluted) compared with $213.4 million or $5.65 per share (diluted) for the corresponding six-month period of last year. In 2021, net loss attributable to shareholders included a $62.6 million foreign exchange gain resulting mainly from the remeasurement of lease liabilities, a gain on disposal of assets of $18.9 million following the termination of aircraft leases and a $8.6 million gain related to the favourable change in the fair value of fuel-related derivatives and other derivatives. In 2020, net loss attributable to shareholders included a $99.9 million charge for the change in the fair value of fuel-related derivatives and other derivatives due to the collapse in fuel prices, a $36.0 million foreign exchange loss mainly related to the remeasurement of lease liabilities and a $16.8 million charge to reduce the carrying value of deferred tax assets. Excluding non-operating items, Transat reported an adjusted net loss3 of $212.3 million or $5.63 per share for the first half of 2021, compared with $59.1 million or $1.57 per share in 2020.

Financial position

As at April 30, 2021, cash and cash equivalents amounted to $346.1 million, compared with $733.7 million on the same date in 2020. This decrease was mainly attributable to a significant decrease in business, partially offset by the $170.0 million drawdown on the credit facilities.

The Corporation entered into an agreement with the Government of Canada that allows it to borrow up to $700.0 million in additional liquidity through the Large Employer Emergency Financing Facility (LEEFF). To supplement the new financing, the amounts already drawn on the Corporation’s existing facilities remain in place and have been extended until April 29, 2023. The ratios applicable to the existing facilities will be suspended for a period of 18 months. The undrawn credit of $180.0 million under the short-term subordinated facility is cancelled. In total, the available financing will therefore represent a maximum of $820.0 million, of which $220.0 million was drawn as at April 30, 2021.

Deposits from customers for future travel amounted to $560.4 million, compared with $605.1 million as at April 30, 2020, a decrease of $44.7 million.

The working capital ratio was 0.85, compared with 0.99 as at April 30, 2020. This change was mainly due to the low business volume over the past 12 months, which led to a decrease in cash and cash equivalents and all the other items making up working capital.

As a result of this sudden, unpredictable and unprecedented health crisis and the resulting travel restrictions, the Corporation decided, like other Canadian carriers, to issue travel credits for cancelled trips. Customer deposits as at April 30, 2021 included these travel credits amounting to $504.6 million, 46% of which was placed in trust, with the difference representing deposits made directly with Air Transat or foreign subsidiaries. On April 29, 2021, the Corporation entered into an agreement with the Government of Canada that also allows it to borrow an amount of $310.0 million to issue refunds to certain travellers. Following this agreement, the Corporation had received requests for about 64% of the amount of credits issued and made refunds for more than 70% of amounts claimed, at the end of May 2021. Customers have until August 26, 2021 to submit their refund requests.

Off-balance-sheet agreements, excluding contracts with service providers, stood at $747.8 million as at April 30, 2021. This amount was mainly composed of commitments to take delivery of the ten A321neos undelivered as at that date.

Outlook

In the current situation, despite some encouraging signs such as the increase in the rate of vaccination, it remains impossible for the moment to predict the impact of the COVID-19 pandemic on future bookings, the partial resumption of flight operations and financial results.

The Corporation has implemented a series of operational, commercial and financial measures, including cost reduction, aimed at preserving its cash. The Corporation continues to monitor the situation daily to adjust these measures as it evolves. Please see the Risks and Uncertainties section of the Corporation’s MD&A for the year ended October 31, 2020 for a more detailed discussion of the main risks and uncertainties facing the Corporation.

Consequently, for now the Corporation is not providing an outlook for summer 2021

Strategic plan

The Corporation has developed its plan for future years, setting the following objectives:

  • During 2021, stabilize the business by streamlining operations and laying the foundations for a recovery that will ensure the Corporation’s long-term viability after the pandemic;
  • During the 2022-2026 period, make the Corporation profitable again and complete its transformation to achieve a level of profitability that exceeds pre-pandemic levels, as well as grow in new markets;
  • After 2026: leverage those achievements to propel Transat toward a new growth phase.

To that end, Transat will implement or continue certain changes:

  • Refocus airline operations and redefine the network by ensuring a greater presence in Eastern Canada and Montréal and forging alliances to strengthen the network;
  • Reduce costs and increase flexibility, particularly by renegotiating some commitments (fleet, real estate, etc.), by refocusing on airline businesses (discontinuation of the hotel division) and a significant simplifying of the organization;
  • Optimize financing structure over the long term;
  • Increase efficiency by streamlining the fleet and bringing its average age down, around two types of Airbus aircraft, improving aircraft usage, reducing seasonal fluctuations and enhancing revenue management practices.

And continue to rely on and leverage its strengths:

  • A leisure travel brand popular with travellers, at a time when vacations and visiting family and friends will be the driving factors for the rebound in air travel;
  • A strong commitment to the environment since many years;
  • Engaged teams with a history of strong sense of belonging to the Corporation;
  • Long-term roots in Québec.

Termination of the arrangement agreement with Air Canada and discussions relating to the sale of the Corporation

On April 2, 2021, the Corporation announced that the contemplated arrangement with Air Canada under the terms of the revised arrangement agreement between Transat and Air Canada dated October 9, 2020 (the “arrangement agreement”) had been terminated by mutual consent of Transat and Air Canada. The parties reached this agreement after having been advised by the European Commission that it would not approve the transaction. A copy of the termination agreement has been filed on SEDAR at www.sedar.com.

In connection with the termination of the arrangement agreement, Air Canada paid a $12.5 million termination payment to the Corporation and agreed to waive its entitlement to a $10.0 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.

Since the termination of the arrangement agreement with Air Canada, Transat is implementing its strategic plan. Besides, discussions with Mr. Pierre Karl Péladeau are continuing. There is no certainty that a transaction will result from them. On April 7, 2021, Mr Péladeau delivered to the Corporation a non-binding proposal contemplating a transaction pursuant to which his management company Gestion MTRHP inc. would acquire all of the shares of Transat for a consideration of $5.00 per share, payable in cash.

Discontinuation of the hotel division

On May 20, 2021, due to the decline in liquidity as a result of the COVID-19 pandemic, and in line with the objectives of the new strategic plan, the Corporation’s Board of Directors approved the discontinuation of the hotel division’s operations.

Transat, majority shareholder of TraficTours Canada Inc. since 2007, acquires the remaining 30% of the incoming tour operator

MONTREAL, June 1, 2021 /CNW/ – Transat A.T. Inc. (“Transat” or the “Corporation”), 70% shareholder of TraficTours Canada Inc. (“TraficTours”), announced today that it has acquired on May 31, 2021 the 30% minority interest in the incoming tour operator held by the minority shareholder, following a mutual agreement between the two parties. The purchase price is for an amount lower than the amount booked in Transat’s financial statements on account of the option to purchase such minority interest. The minority shareholder had the option to require Transat to purchase the minority interest since 2019. The manager of TraficTours and its subsidiaries remains in place to ensure the operations run regularly.

TraficTours offers excursions and other services to vacationers in Mexico, the Dominican Republic and Jamaica. By becoming sole shareholder, Transat is strengthening its inbound services in three of these key markets.

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).

Transat announces that Jean-Marc Eustache is retiring and handing over the leadership of the company – Annick Guérard appointed as President and Chief Executive Officer

MONTRÉAL, May 26, 2021 /CNW Telbec/ – Transat A.T. Inc. (“Transat” or the “Corporation“) announces today the implementation of the succession plan set up for Mr. Jean-Marc Eustache who is retiring and handing over the leadership of the Corporation.

Mr. Jean-Marc Eustache

Mr. Eustache has been one of the principal architects of the creation of Transat in 1987. With his avant-garde business vision focused on vertical integration, he helped make Transat a world leader in the tourism industry. The company he built has been the envy of many, as evidenced by the announcement in 2019 of the transaction for its acquisition by Air Canada valuing the company at more than $720 million before the pandemic came to thwart these plans.

“With the crisis resulting from the COVID-19, we were most happy to have been able to rely on all of Jean-Marc’s experience and wisdom to face the worse storm in the history of Transat and the tourism industry, until the implementation of the critical $700 million financing announced on April 29, 2021 which will provide Transat with the funds it needs to relaunch its operations on solid grounds once it emerges from the pandemic-induced restrictions” has indicated Mr. Raymond Bachand, the Lead Director of the Corporation.

“We are grateful to Jean-Marc for his contribution and his unwavering dedication throughout his tenure at Transat, and we now hope that he can fully enjoy his well-deserved retirement” he added.

Mrs. Annick Guérard

Mrs. Annick Guérard is appointed as President and Chief Executive Officer starting on May 27, 2021. Mrs. Guérard has been Transat’s Chief Operating Officer since November 2017.

“Jean-Marc has been a pillar of the company since its beginnings more than thirty years ago, and we want to continue to make this jewel that he leaves us shine for several decades to come” said Annick Guérard.

“I leave the company in the good hands of Annick Guérard, who has my full confidence as well as that of the rest of the management team and the Board of Directors. I have no doubt that, under her leadership, Transat will accomplish great things and once again become a formidable competitor admired by all. I am proud to have brought Transat to where it is now, and to have been able to secure the funding that allows it to face its future with confidence. It is now time to make room for new decision-makers, as Transat will deploy the plan that will once again make it a solid, profitable company and, for a long time to come, the symbol of leisure travel in the eyes of its many customers, in Quebec and elsewhere” mentioned Mr. Jean-Marc Eustache.

Mr. Eustache is also stepping down from his role on the board of directors. M. Bachand will succeed him as Chairman of the Board and Mrs. Guérard will join the Board of Directors. These changes will also be effective as of May 27, 2021.

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).

Transat unveils new refund tracking tool

From Travelweek Group – link to source story

Transat unveils new refund tracking tool

MONTREAL, 21 May 2021 — Transat has launched a new online tool to help travel agents and travellers track their refund requests.

Transat first announced last month that it will now be offering refunds to travellers who were issued a travel credit due to COVID-19, while at the same time protecting agent commissions.

With the new tracker tool, users simply enter the Transat booking number and full name to check the status of their request. Refund requests will have one of the following statuses: Received, Processing, or Review has been completed.

The tool does not provide tracking for group or GDS bookings.

Earlier this week during Travelweek’s ‘Future of Travel: Sunnier Days Ahead’ virtual conference, keynote speaker Joseph Adamo, Transat’s Chief Sales & Marketing Officer, said that the refund process is “going very well” and that the company is seeing a high opt-in rate from full-service agents. He also encouraged agents to get refund requests in early as they will be processed on a first come, first serve basis.

Frustration grows as Sunwing doesn’t give refunds for cancelled flights despite taking taxpayer aid

From CBC News – link to source story

Airline offers credit vouchers to affected passengers, but many just want their money back

Dianne Buckner · CBC News · May 14, 2021

Jillian Wilson’s wedding dress is still in a garment bag since her destination wedding was cancelled more than a year ago as COVID-19 brought international air travel to a halt. Wilson says she wants the roughly $70,000 her group spent on Sunwing airfare to be refunded. (Turgut Yeter/CBC News)

Glenn Waddingham can barely contain his frustration.

“This is a terrible way to do business,” he said. “How is this even allowed to happen?”

The 62-year-old from Victoria Harbour, Ont., is referring to the fact that unlike other large Canadian airlines, Sunwing is still not offering refunds for flights it cancelled due to the pandemic. Some of those flights were cancelled more than a year ago, leaving many customers in the same frustrating situation as Waddingham.

He and his wife had planned a “once-in-a-lifetime” trip to the Margaritaville resort on Grand Cayman Island for March 2020, but the airline cancelled the flight after Ottawa warned against non-essential international travel. 

Sunwing, a low-cost carrier based in Toronto that flies to the Caribbean, Mexico and Central America, has offered travel credit vouchers to affected passengers. But Waddingham said he doesn’t need a voucher; he needs the $3,600 he paid for the trip. 

“I want a refund. I’m unemployed. I could use the money,” he said. “I’m shocked that the Better Business Bureau and the federal government is allowing one tour operator to act in this manner.” 

Other airlines issue refunds

Hundreds of Sunwing customers who want refunds are part of a Facebook group called Sunwing Complaints. Many are angry that the airline has still not refunded its customers for flights cancelled because of the pandemic despite accepting federal loans that were contingent on such refunds. 

They point out that both Air Canada and Air Transat began issuing refunds as soon as they received hundreds of millions of dollars from Ottawa in April. But Sunwing is sticking to its credit-voucher-only policy despite having accepted a $375-million financing deal from Ottawa in February.

Like several other large Canadian employers, such as GoodLife Fitness, Gateway Casinos, Air Canada and Air Transat, the company was able to secure a loan through a special pandemic-related program called the large employer emergency financing facility (LEEFF).

Sunwing did not reply to the CBC’s email and telephone requests for comment. 

Glenn Waddingham and his wife had booked a trip to Grand Cayman Island for March 2020. Now unemployed due to the pandemic, Waddingham says he doesn’t want a travel voucher from Sunwing; he wants his money back. (Submitted by Glenn Waddingham)

Jillian Wilson, 30, of Stratford, Ont., isn’t impressed with the airline. 

“To hear that they’ve gotten a government fund or bailout and are still refusing to give refunds is very, very disappointing,” she said.  

She and her partner were married by a justice of the peace in February 2020 and planned to celebrate with friends and family at a beach wedding ceremony in the Dominican Republic a month later. They estimate their group of 40 guests is out of pocket about $70,000 altogether because their flights were cancelled. 

My husband likes to call it an interest-free loan to Sunwing,” she said. 

Wilson is as baffled as many other customers about why the airline hasn’t followed Air Canada and Air Transat in refunding customers for flights cancelled due to COVID-19.

Special loans for the other airlines

There is a difference, however, between the federal aid Air Canada and Air Transat have received and what Sunwing has negotiated so far. The other airlines arranged additional loans from the government specifically to fund passenger refunds, on top of their LEEFF loans.  

However, the government says it actually imposed conditions on Sunwing’s LEEFF loan: the airline had to agree to set aside the money it had received from customers for tickets to ensure they could eventually be refunded. No timeline was set for paying customers back.

The COVID-19 pandemic has taken a punishing financial toll on Canada’s airline industry. (Fred Hutton/CBC)

A statement sent to CBC News from the office of Finance Minister Chrystia Freeland says, “As part of the LEEFF loan that Sunwing received in February 2021, Sunwing committed to refunding its customers for pandemic-related cancellations.”

The email sent by press secretary Katherine Cuplinskas also says, “As an industry-wide refund process is now in place, the federal government fully expects Sunwing to uphold its commitment to refund customers and conversations continue with the airline to ensure this happens.”

Asked why it’s taking so long for customers to receive those refunds, especially since Sunwing was told to set the money aside, Cuplinskas said that’s a question for the airline.

The delay could be due in part to the fact Sunwing and the government are currently negotiating a separate refund loan.

The expectation is the airlines will start repaying the loans once travel picks up after the pandemic is under control.

Ian Jack, vice-president of public affairs with the Canadian Automobile Association (CAA), says he is sympathetic to the plight of all airlines, including Sunwing, but the carrier should offer refunds promptly to customers whose flights were cancelled due to the pandemic. (Stephane Richer/CBC)

Ian Jack, vice-president of public affairs with the Canadian Automobile Association (CAA), a retail leisure travel vendor, said the situation with Sunwing is unfair to customers.

“Arguably, Sunwing has had a bit of a double benefit here. They’ve got the government loans and they’ve got all that customers’ money,” said Jack, who serves as a consumer advocate for issues related to transportation.

He also acknowledges that Sunwing, like all airlines, is in a tough spot.

“Nobody would want to be trying to run an airline these days,” he said. “And certainly over the past year or so, we have to have some sympathy for a carrier that’s just been sideswiped and almost had its business shut down.”

Customer concerns

Even so, he said, Sunwing customers have had to wait far too long for refunds.

“It’s really unconscionable how long this has taken. It’s been over a year now since the skies were originally shut down due to COVID. The government needs to revisit this with Sunwing and say to them, ‘Look, get the money flowing.'”

Glenn Waddingham is nervous about whether that will happen.

“My fear is that Sunwing is going to go bankrupt and then we’re going to be part of their debtors and we’re getting nothing.”