Tag: Air Transat

Transat A.T. Inc. – Results for third quarter of 2019

Provided by Transat A.T. Inc/CNW

Third quarter results are up;
Acquisition of the Corporation is pending regulatory approvals

For the third quarter:

  • Revenues of $698.9 million.
  • Adjusted operating income of $21.8 million (operating loss of $7.6 million). *
  • Adjusted net income of $5.7 million (net loss attributable to shareholders of $11.0 million). * 
  • The Corporation took delivery of its first two Airbus A321neoLRs.

For the nine-month period:

  • Revenues of $2.2 billion.
  • Adjusted operating loss1 of $12.9 million (operating loss of $73.3 million). *
  • Adjusted net loss3 of $36.6 million (net loss attributable to shareholders of $53.5 million). * 

Potential transaction:

  • Arrangement plan with Air Canada to acquire the Corporation approved by 94.7% of the shareholders on August 23 and through the issuance of a final approval order by the Superior Court of Québec on August 28.
  • Transaction expected to close by the second quarter of the 2020 calendar year if the required regulatory approvals are obtained and conditions are met.

MONTRÉAL, Sept. 12, 2019 /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 third quarter ended July 31, 2019.

 “We’re very satisfied with the strong support received from our shareholders and the final approval of the arrangement plan. The planned transaction is good news for our shareholders, our employees, our clients and our community, and we’re currently working to obtain the required regulatory approvals to complete it,” stated Jean-Marc Eustache, President and Chief Executive Officer of Transat. “Meanwhile, we remain focused on our operations and note an improvement in our adjusted results for the quarter compared with last year.”

* NOTE: Figures in parentheses and not designated as adjusted on this page refer to IFRS financial measures for the current year

Third-quarter highlights

The Corporation posted revenues of $698.9 million for the quarter, up $34.3 million (5.2%) compared with 2018. This increase was attributable to the higher average selling prices and improved load factors across all markets. The number of travellers rose 4.3% in the transatlantic market, the Corporation’s main market for the period.

Operations generated adjusted operating income1 of $21.8 million, compared with $2.4 million in 2018, an improvement of $19.5 million. This increase was mainly driven by the higher average selling prices and improved load factors across all markets.

Net loss attributable to shareholders amounted to $11.0 million or $0.29 per share (diluted) compared with $5.0 million or $0.13 per share (diluted) in 2018. The net loss attributable to shareholders included professional fees of $6.0 million and compensation expenses of $7.7 million recorded in connection with the potential acquisition transaction of the Corporation by Air Canada. The compensation expenses are mainly related to the provisions recorded for stock-based compensation plans which include a change of control clause and to adjustments made to stock-based compensation plan provisions subsequent to the significant rise in the share price. Excluding non-operating items, Transat reported adjusted net income3 of $5.7 million ($0.15 per share) for the third quarter of 2019, compared with an adjusted net loss3 of $5.0 million ($0.13 per share) in 2018.

Nine-month period highlights

The Corporation recognized revenues of $2.2 billion, up $63.8 million or 2.9% from 2018. The higher revenues recorded during the winter season is mainly attributable to the increase in average selling prices across all markets, combined with a 2.8% rise in the number of travellers in the sun destinations market, resulting from the decision to increase capacity in that market. The increase in revenues was offset by a greater proportion of flight-only sales, which generate lower unit revenues than packages. For the summer season, the increase was attributable to the higher average selling prices and improved load factors across all markets. The number of travellers rose 4.3% in the transatlantic market.

For the nine-month period, operations generated an adjusted operating lossof $12.9 million compared with $14.3 million in 2018, an improvement of $1.4 million. This increase resulted from the higher adjusted operating income1 during the summer season, partly offset by the increase in adjusted operating loss for the winter season. The increase in fuel prices, combined with the weakening of the dollar against the U.S. dollar, and the additional costs incurred for the transition and optimization of the Corporation’s fleet exceeded the increase in the average selling prices of packages during the winter season.

Net loss attributable to shareholders amounted to $53.5 million or $1.43 per share (diluted) compared with $0.3 million or $0.01 per share (diluted) for the corresponding nine-month period of 2018. The net loss for 2018 included a $31.3 million gain on the sale of the Corporation’s subsidiary Jonview. Before non-operating items, Transat reported an adjusted net loss3 of $36.6 million ($0.98 per share) for the period ended July 31, 2019, compared with $37.7 million ($1.01 per share) in 2018.

Financial position

As at July 31, 2019, cash and cash equivalents amounted to $723.8 million, compared with $867.2 million on the same date in 2018. This change resulted primarily from the purchase of land in Mexico ($75.7 million), from the purchase of a replacement engine for the Airbus A321neoLR fleet ($16.8 million), from the change in the calculation of cash and cash equivalents to be held in trust following the adoption of the new revenue recognition standard IFRS 15 ($21.3 million), from the adjusted net loss for the past 12 months ($23.0 million) and from commissioning costs for aircraft added to the fleet ($13.8 million).

The working capital ratio was 1.19, compared with 1.41 as at July 31, 2018.

Deposits from customers for future travel amounted to $611.1 million, compared with $587.2 million as at July 31, 2018.

Off-balance-sheet agreements, excluding contracts with service providers, stood at $2.4 billion as at July 31, 2019, compared with $2.5 billion as at October 31, 2018. The $152.8 million decrease resulted primarily from repayments made during the nine-month period, partially offset by the weakening of the dollar against the U.S. dollar.

Outlook

2019 fourth quarter – The transatlantic market outbound from Canada and Europe accounts for a substantial portion of Transat’s business during the summer season. For the period from August to October 2019, Transat’s capacity is similar to that deployed on the same date last year. To date, 83% of the capacity has been sold, the load factors are lower by 0.9% compared with summer 2018 and selling prices of bookings taken are 2.1% higher than those recorded at the same date in 2018. The impact of currency variations, combined with lower fuel costs in U.S. dollars, will not result in a significant increase in operating costs if aircraft fuel prices remain stable and the dollar remains at its current level against the U.S. dollar, the euro and the pound.

On the sun destinations market outbound from Canada, for which summer is low season, 83% of capacity is sold and the load factors are 5.6% higher compared with 2018. Unit margins are currently higher compared with those recorded on the same date last year.

If the current trends hold, the Corporation expects its results for the fourth quarter to be slightly higher than those of last year.

2020 winter – On the sun destinations market, the Corporation’s main market during the winter season, Transat’s capacity is 9% higher than that deployed on the same date last year. To date, 27% of the capacity has been sold and load factors are 1.8% higher compared with 2019. The impact of lower fuel costs, combined with fluctuations of the Canadian dollar, will not result in a significant increase in operating costs if aircraft fuel prices remain stable and the dollar remains at its current level against the U.S. dollar.

The Corporation believes it is still too early to draw any conclusions regarding winter season results.

Discussions relating to the sale of the Corporation

On August 23, 2019, a significant majority of the Corporation’s shareholders voted in favour of the special resolution approving the plan of arrangement entered into on June 27 pursuant to which Air Canada is expected to acquire all of the issued and outstanding Class A variable voting shares and Class B voting shares of Transat for a cash consideration of $18.00 per share.

On August 29, 2019, the Corporation announced that the Superior Court of Quebec issued a final order approving the plan of arrangement with Air Canada. The arrangement remains subject to certain closing conditions, including regulatory approvals described in Transat’s management information circular dated July 19, 2019, as well as other customary closing conditions. In addition, a public interest assessment regarding the arrangement is being undertaken by Transport Canada with input from the Commissioner of Competition. If the required regulatory approvals are obtained and conditions are met, it is now expected that the transaction will close by the second quarter of the 2020 calendar year.

The management information circular dated July 19, 2019 contains additional information regarding the arrangement.

The Corporation has agreed to limit its undertakings and expenses related to the execution of its hotel strategy in the period leading up to the closing of the potential transaction.

Restatement

On June 27, 2019, the Corporation announced that it needed to restate its consolidated financial statements and management’s discussion and analysis (“MD&A”) for the year ended October 31, 2018 as well as for the first quarter ended January 31, 2019 and the second quarter ended April 30, 2019. Management has concluded that a restatement of its consolidated financial statements was necessary regarding the carrying amount of the non-controlling interest in the Trafictours Canada Inc. subsidiary.

The carrying amount of the non-controlling interest is related to the Trafictours Canada Inc. subsidiary and the right of the minority shareholder to require the Corporation to purchase the Trafictours Canada Inc. shares it holds at a price calculated in accordance with a pre-determined formula, subject to adjustment based on the circumstances, payable in cash. The estimated repurchase value of this option is taken into account in the carrying amount of the non-controlling interest. The difference results from the application of a different formula than as per the contract for the calculation of the purchase price of the minority interest. As a result, the Corporation restated its financial statements to increase the liability for the non-controlling interest reported under Trade and other payables in the consolidated statements of financial position which was undervalued by $25.9 million, $23.3 million and $20.5 million as at October 31, 2018, January 31, 2019 and April 30, 2019, respectively. The recording of these adjustments had no impact on the Corporation’s consolidated statements of income for the aforementioned periods as these adjustments are recorded as equity transactions in Retained earnings.

As part of the restatement of its consolidated financial statements as at October 31, 2018, the Corporation had to review subsequent events up to September 11, 2019, the new date of authorization to publish the financial statements for the year ended October 31, 2018. On June 5, 2019, the Corporation settled without admission of liability, for an amount of US$5.0 million [$6.7 million], a litigation whereby plaintiffs alleged misappropriation of confidential information and solicitation of employees. The amount was recorded under Special items in the restated consolidated statement of income for the year ended October 31, 2018. This adjustment is included under Trade and other payables and Retained earnings in the consolidated statements of financial position as at October 31, 2018. No provision was recorded in the financial statements as at October 31, 2018 as initially published as it was not possible to determine with any degree of certainty the extent of any financial liability that would have arisen had the Corporation been unsuccessful in its defence of this lawsuit.

Crackdown on Canadian airlines nothing more than a ‘token gesture’: advocate

News provided by CityNews1130.com – link to full story and updates

By TARRAH HARVEY AND THE CANADIAN PRESS, Sep 5, 2019

An airplane prepares to land at Pearson International Airport in Toronto, Thursday September 30, 2004. Air safety authorities say the runway setup at Toronto’s Pearson International Airport poses a serious risk of crashes. THE CANADIAN PRESS/ Adrian Wyld

SUMMARY

  • WestJet was fined $17,500, Air Canada was fined $12,500, Air Transat and Porter Airlines were fined $7,500 each
  • Air passenger protection regulations allow a fine of $25,000 per infraction

VANCOUVER (NEWS 1130) — A passenger rights advocate is calling the $45,000 fine imposed on four Canadian airlines a “token gesture,” saying regulations allow for them to be fined 10 times as much.

Gábor Lukács, founder of Air Passenger Rights, says the fine is a drop in the bucket for airlines and sends a clear signal to passengers.

“The message that this lousy fine is sending to the public and the airlines is that the regulator is not really wiling to enforce rights of passengers,” he says.

WestJet Airlines Ltd. was fined $17,500, Air Canada was fined $12,500, and Air Transat and Porter Airlines were fined $7,500 each for breaching federal regulations.

Air passenger protection regulations allow a fine of $25,000 per infraction, meaning the airlines could have been on the hook for a combined $450,000.

Lukácssays the announcement of the fines is nothing more than “smoke and mirrors,” strategically timed to try to convince Canadians that the current government cares about passenger right before the federal election.

The rule that the airlines violated was one that states airlines must display a notice at the check-in desk, self-service kiosks and departure gate that passengers who are denied boarding or whose luggage is lost or damaged may be entitled to compensation.

The regulator says airlines failed to alert travellers to their rights ahead of several flights out of Halifax, Quebec City, Calgary and Edmonton between July 22 and Aug. 7.

New rules came into effect July 15 beefing up compensation for passengers whose flights were delayed or luggage damaged, which have been met with criticism from both the industry and consumer advocates.

Under the new rules, airlines will now have to provide compensation — up to a maximum of $2,400 — to anyone bumped from a flight. Changes also mean airlines will have to compensate passengers if their flight is severely delayed, if their luggage is lost, or if flights are overbooked, as long as the situation is within the company’s control.

Airlines fined $45,000 for violating new passenger regulations

News provided by CTV News – link to full story

Vancouver International Airport
A Westjet Boeing 737-800, left, taxis past an Air Canada Rouge Airbus A319 at Vancouver International Airport in Richmond, B.C., on Monday, April 28, 2014. THE CANADIAN PRESS/Darryl Dyck

Ryan Flanagan, CTVNews.ca Writer Thursday, September 5, 2019

Four major Canadian airlines have been fined for not complying with the new passenger protections that came into effect earlier this summer.

The Canadian Transportation Agency says Air Canada, WestJet, Porter Airlines and Air Transat have all been penalized since the rules changed on July 15.

In all cases, the airlines were found to have failed to display required notices to passengers. Airlines are required to display information about passenger rights at check-in counters, self-service check-in machines and boarding gates.

WestJet was fined $17,500 for seven violations, Air Canada was fined $12,500 for three, and Air Transat and Porter Airlines were each fined $7,500 for three violations apiece.

The new regulations hold airlines to a higher standard of treatment for passengers during tarmac delays, including requiring them to allow passengers to deplane if they have spent three hours waiting to take off and a take-off is not imminent. Airlines are also now required to have clear policies explaining how they handle luggage containing musical instruments.

The Canadian Transportation Agency has not taken any other disciplinary action against airlines since the new regulations came into effect.

Another round of passenger rights protections will take effect in December. At that point, airlines will be required to compensate passengers for any delays or cancellations within the airline’s control, as well as rebook or refund passengers whose flights are delayed – even if that means they have to buy them a ticket for a competing airline.

Air passenger advocates have argued that this will do little to help passengers. They note that a broad array of issues ranging from airport problems to medical emergencies to weather conditions can be cited for delays without the compensation requirement being triggered.

A spokesperson for Porter Airlines told CTVNews.ca that the company corrected the “minor communication issues” as soon as they were notified of the fines.

“Porter has dedicated significant resources to implementing the regulations on very short notice and we are making every effort to comply with the rules,” the spokesperson said.

A group of 17 airlines, including Air Canada and Porter, has filed a legal challenge against the regulations, arguing that the Canadian Transportation Authority does not have the power to implement them. The Federal Court of Appeal has agreed to hear the appeal.

Hurricane Dorian has Florida in its sights; airlines, cruise lines make contingency plans

News provided by Travelweek – link to full story and updates

Friday, August 30, 2019 Posted by Travelweek Group

TORONTO — Transat is waiving change fees for flights to Ft. Lauderdale and Orlando and WestJet has extended its rebooking window for four Florida destinations as Hurricane Dorian churns towards Florida, potentially as a Category 4 storm by the time it makes landfall.

Cruise lines are keeping an eye on Dorian as well, with updates from Carnival, Royal Caribbean, NCL and more.

The latest forecast from the National Hurricane Center has the Category 2 storm strengthening into a ‘potentially catastrophic’ Category 4 with winds of almost 225 kph, making landfall along the U.S. southeast coast on Tuesday.

While the projected track shows the storm hitting near West Palm Beach, the ‘cone of uncertainty’ of Dorian’s potential path covers nearly all of Florida’s 800-kilometre coastline, with Miami, Fort Lauderdale and Orlando all within the danger zone.

Yesterday afternoon Transat said its air and cruise operations, as well as cruise operations, are still proceeding on schedule, but the company is monitoring the situation.

Transat passengers with tickets for flights to Fort Lauderdale or Orlando, booked before Aug. 27 and operating Aug. 31 – Sept. 2 inclusive, can take advantage of Transat’s flexible rebooking policy. Passengers on impacted flights can change their date and/or destination for trips completed by Oct. 31.

WestJet has extended its travel window for its flexible rebooking policy, for travel up to Sept. 3 for Nassau as well as Fort Lauderdale, Orlando, Fort Myers and Tampa.

As of 3 p.m. on Aug. 30 Air Canada had not added any Florida destinations to its Travel Alerts list.

More…

READ: complete story.

Superior Court of Quebec Approves Plan of Arrangement for Air Canada and Transat A.T. Inc. Combination

Provided by Transat A.T. Inc./CNW

MONTREAL, Aug. 29, 2019 /CNW Telbec/ – Transat A.T. Inc. (“Transat”) today announced that the Superior Court of Quebechas issued a final order approving the previously announced plan of arrangement with Air Canada (the “Arrangement”). The Arrangement was also approved by 94.77% of shareholders present in person or by proxy at the special meeting of Transat held on August 23, 2019.

The Arrangement is still subject to certain closing conditions, including regulatory approvals described in Transat’s management information circular dated July 19, 2019, as well as other customary closing conditions. In addition, a public interest assessment regarding the Arrangement is being undertaken by Transport Canada with input from the Commissioner of Competition.  If the required regulatory approvals are obtained and conditions are met, it is now expected that the transaction will be completed by the second quarter 2020.

Transport Canada to conduct a public interest assessment regarding proposed purchase of Transat A.T. Inc. by Air Canada

Provided by Transport Canada/CNW

OTTAWA, Aug. 26, 2019 /CNW/ – On July 17, Air Canada and Transat A.T. Inc. notified the Honourable Marc Garneau, Minister of Transport, of a proposed transaction whereby Air Canada would acquire Transat A.T. Inc. This notification was in accordance with the mergers and acquisitions provisions of the Canada Transportation Act.

The Minister of Transport has determined that the transaction raises public interest issues related to national transportation. As such, a public interest assessment of the proposed transaction will be conducted with input from the Commissioner of Competition, who will assess impacts on competition.

The public interest assessment will include targeted consultations with the air industry and other stakeholders, other levels of government and the public, as well as an analysis of the economic benefits or challenges resulting from the proposed transaction. Consultation will begin on November 4, 2019.

Under the Canada Transportation Act, Transport Canada has up to 150 days to complete this public interest assessment. However, the Minister has the authority to grant an extension should extra time be necessary. Considering the size and scope of the proposed transaction, an extra 100 days has been granted to both Transport Canada and the Commissioner of Competition, to ensure sufficient time for thorough analysis and assessment.

The Department now has 250 days (until May 2, 2020) to complete the public interest assessment and provide it to the Minister. The Minister would then provide a recommendation to the Governor in Council (Cabinet) concerning the proposed purchase. The Minister’s recommendation would incorporate the findings of the Commissioner’s report on competition considerations. There is no legislated timeline for the Minister to make his recommendation or for the Governor in Council to make a final decision.

Air Canada Welcomes Transat Shareholders Approval

Provided by Air Canada/CNW

MONTREAL, Aug. 23, 2019 /CNW Telbec/ – Air Canada is pleased by the announcement, earlier today, by Transat A.T. Inc. (“Transat”) of the approval, by a majority of nearly 95% of its shareholders, of its Arrangement Agreement with Air Canada under which Air Canada will acquire all its issued and outstanding shares.

“We are pleased with the outcome of Transat’s special meeting and grateful to Transat shareholders for this overwhelming show of support,” said Calin Rovinescu, President and Chief Executive Officer of Air Canada. “We will build a combined company greater than the sum of its parts that we can all be proud of.  We now look forward to engaging with Transport Canada and the Competition Bureau to secure the required approvals to complete the transaction and welcome the opportunity to demonstrate the many benefits it will bring.”

“This is the best possible outcome for all stakeholders,” added Mr. Rovinescu. “For shareholders of Transat and Air Canada, the combination delivers excellent value, while also providing increased job security for both companies’ employees through greater growth prospects. Air Canada plans to preserve the Transat and Air Transat brands and maintain the Transat head office and its key functions in Montreal. Travellers will benefit from the combined companies’ enhanced capabilities in the highly competitive, global leisure travel market and from access to new destinations, more connecting traffic and increased frequencies. Customers and the Quebec economy will derive maximum advantage of having a Montreal-based, growth-oriented global champion in aviation, the world’s most international business, spurring more employment and securing Montreal’s position as a leader among world aviation centres.”

Transat’s Shareholders Overwhelmingly Approve the Arrangement with Air Canada

Provided by Transat A.T. Inc./CNW

MONTREAL, Aug. 23, 2019 /CNW Telbec/ – Transat A.T. Inc. (“Transat”) is pleased to announce that, at the special meeting of its shareholders (the “Shareholders”) held today (the “Meeting”), a significant majority of Shareholders voted in favour of the special resolution (the “Arrangement Resolution”) approving the previously announced plan of arrangement under Section 192 of the Canada Business Corporations Act pursuant to which Air Canada will acquire all of the issued and outstanding Class A variable voting shares and Class B voting shares of Transat (together, the “Shares”) for $18.00 per Share in cash (the “Arrangement”).

Shareholders carrying an aggregate of 26,530,771 votes, representing approximately 70.28% of votes entitled to be cast at the Meeting, were represented in person or by proxy at the Meeting. The Arrangement Resolution was approved by 94.77% of the votes cast by Shareholders, voting together as a single class, as well as 94.69% of the votes cast by Shareholders, voting together as a single class, excluding the votes of Jean-Marc Eustache whose votes are required to be excluded in determining minority approval pursuant to Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions.

“We are delighted by the shareholder support for the arrangement that will create a Montreal-based travel leader, able to compete on a global scale” said Jean-Marc Eustache, President and Chief Executive Officer of Transat. “This transformative transaction will create long-term benefits for our employees, travellers and communities, all the while providing significant value for our shareholders.”

The Arrangement remains subject to certain closing conditions including the approval of the Superior Court of Québec and applicable regulatory approvals such as the approvals under the Competition Act (Canada), the Canada Transportation Act and the European Union Council Regulation (EC) No. 139/2004, as well as other customary closing conditions.

Transat shareholders have voted to approve sale to Air Canada

News provided by Montreal Gazette – link to full story and updates

Almost 95 per cent of votes cast ahead of Friday’s shareholder meeting were in favour of the deal with Air Canada, Transat said.

By FRÉDÉRIC TOMESCO Updated: August 23, 2019

Transat shareholders convenef in a special meeting Friday, Aug. 23, in Montreal to vote on Air Canada’s $720-million bid for the company. DAVE SIDAWAY / MONTREAL GAZETTE

Transat A.T. Inc. shareholders approved Air Canada’s offer to buy the Montreal-based travel company on Friday morning, putting the fate of the transaction in the hands of regulators.

Almost 95 per cent of votes cast ahead of Friday’s shareholder meeting were in favour of the deal with Air Canada, Transat said. This gives the company enough support to proceed with the transaction.

Air Canada and Transat will now wait for transport and competition authorities in Canada and the European Union to weigh in on the combination. That won’t happen for several months, with Air Canada saying earlier this month the transaction is unlikely to close before early 2020.

This story will be updated. 

Fonds de solidarité FTQ Voted in Favour of Plan of Arrangement for Transat A.T.

Provided by Fonds de solidarité FTQ/CNW

Air Canada’s positive intentions must translate into
concrete and lasting actions

MONTRÉAL, Aug. 23, 2019 /CNW Telbec/ – During the special meeting of shareholders of Transat A.T. (“Transat”) (TSX: TRZ) on August 23, 2019, the Fonds de solidarité FTQ (the “Fonds”) voted in favour of the plan of arrangement announced on June 27, 2019 and amended on August 11, 2019.

A partner of Transat since 1990, the Fonds has always supported the company in its growth. This is the second longest partnership in the Fonds’ history. Through thick and thin, Fonds shareholders’ savings supported Transat, particularly in the months following 9/11 and during the 2008-2009 financial crisis. Over the years, the executives and employees of this Québec flagship company have built a corporate culture that resonates with Québec consumers and has been recognized by its industry.

To preserve Transat’s socioeconomic spinoffs in Québec, the Fonds expressed its concerns to Air Canada about certain aspects of the proposed deal. In their discussions, the Fonds raised the issues of jobs and Transat’s headquarters in Québec, as well as maintaining and improving French-language services. Regional air service was also discussed. Air Canada’s positive intentions, made public during the arrangement process, are a step in the right direction. However, they must translate into concrete and lasting actions.

While imperfect, this transaction could allow Transat to be included in a larger group, thus allowing it to better deal with growing international competition. It is now up to Air Canada to seize the opportunity to increase jobs and economic spinoffs in Québec.

As of August 23, 2019, the Fonds beneficially owned 4,360,426 common shares of Transat, or 11.6% of the common shares outstanding.