How Annick Guerard is leading the fightback at Canada’s Air Transat

From Flight Global – link to source story

By Pilar Wolfsteller | 28 September 2021

With a little help from new partners and a determination not to dwell on a punishing 18 months for the business, Annick Guerard is plotting a secure future for Air Transat

Montreal winters are painfully, unspeakably cold. Within minutes of exposure, uncovered skin could succumb to frostbite and wet hair freezes into icicles. Canadians know that it is unwise to spend long periods outdoors in such conditions.

But on a ridiculously frigid day back in 2001, a young Annick Guerard found herself on the apron of a Montreal-area airport, shadowing Air Transat maintenance professionals who were about to inspect and repair the wing of an aircraft. The temperature was -35°C (-31°F), and Guerard was bundled up in the warmest clothes she could find.

“I was dressed to go to the North Pole, and the mechanics began to remove their gloves to work,” she says. “I couldn’t believe it.”

She was there as a senior consultant for Deloitte, and Transat was her client. A civil engineer who had earned a degree at Polytechnique Montreal, and who holds a master’s degree in business administration from HEC Montreal, Guerard had specialised in logistics management and implementing continuous-improvement programmes in the transportation and manufacturing sectors.

OBVIOUS PASSION

During two weeks embedded in Transat’s line maintenance department, she watched in astonishment as mechanics forged on in the sub-zero climate, day after day. And despite the brutal, surreal weather, she felt an immediate connection with the workers and their company. Their passion for the airline was tangible, several even sporting tattoos of the carrier’s star logo.

Barely a year later, perhaps in part as a result of her grit on that icy assignment, Air Transat hired her as its senior director for strategy and customer experience. Two decades on, she’s now the chief executive.

Air Transat

Source: Benedicte Brocard

Guerard laughs at the story of her first encounter with the airline that would propel her to the top of her profession. But it is clear she holds deep respect for the employees who made Air Transat the company it is today.

“I love this company. I love everything about it. I love the people, and I love to come to work every day,” she says.

Guerard, now 50 years old, took the controls at the airline in May, as it faced twin crises, either of which could have signalled the end of the 35-year-old brand: a global coronavirus pandemic that seemed to never end, and the termination of a blockbuster deal with cross-town rival Air Canada that had been conceived to rescue the ailing carrier.

“It has been very tough these past few months,” she says, reflectively. “Sometimes we didn’t know if we would make it to the end of the day.”

The worst part, she says, was making the painful decision to shut down temporarily and lay off workers.

From the beginning of the pandemic through to August of this year, Canada had some of the strictest and longest-running pandemic-driven travel restrictions anywhere. Federal entry requirements for passengers arriving from outside Canada – including a required quarantine period in a government-authorised facility at the travellers’ cost – and regional regulations made travelling to or within Canada a complex undertaking.

Transat was forced to suspend flight operations twice since the beginning of the global health crisis. It first ceased operations from 1 April until 23 July 2020, joining numerous other airlines that quickly and radically slashed costs, battening down hatches as the still-little-known virus portended disaster for the global aviation industry.

IMPOSSIBLE TASK

“Trying to forecast demand at one point was just impossible. Our teams were redesigning the programme week after week, adapting to the new border restrictions and requirements,” she says.

Transat shut down again in February 2021, this time at the government’s request, in an attempt to quash any chance of infected passengers entering from abroad.

The de facto cancellation of Canada’s all-important spring-break travel season, when many Canadians seek out sunny destinations and warmer weather, hit the holiday specialist particularly hard. And still, the federal government declined to provide the industry with financial relief.

On Guerard’s first earnings call as chief executive in June, she reported an entire quarter without revenue.

In addition to dealing with the biggest industry crisis of our time, Transat spent much of the past two years attempting to close a deal with Air Canada that promised to strengthen and stabilise the brand. The timeline of the planned marriage, announced in 2019 and originally expected to close by mid-2020, was thrown off by the pandemic. Covid-19 also forced a radical rework of terms.

The legacy carrier initially offered to buy Transat for C$18 ($14.26) per share, making the deal worth about C$720 million. But following the precipitous decline in air travel demand, Air Canada slashed the price to C$5 per share. Transat’s shareholders overwhelmingly approved the new offer in December 2020, seeing it as a last-ditch means to salvage the company.

The Canadian government approved the transaction in early February, subject to conditions including job assurances, a commitment to maintain a significant presence in French-speaking Canada, the launch of new destinations within five years and what the government called “a price-monitoring mechanism”.

But two months later, after significant foot-dragging, the European Commission effectively nixed the deal because of competition concerns on European routes, leading the companies to call it off completely.

At the time, both airlines expressed frustration at the drawn-out process and the Commission’s conditions, which Air Canada called “onerous”, and “beyond commercially reasonable”.

A separate offer from an independent investor was also retracted, and negotiations ended shortly thereafter.

Canada’s number three airline was left to founder, and figure out how to go it alone.

Guerard does not look back, and does not spare a word for the deal that might have been. The company finally received C$700 million in federal financial aid in April – C$390 million to keep it operational, and C$310 million to reimburse customers whose flights had been cancelled.

Air Transat

Source: Benedicte Brocard

“Honestly, we wish the government had shown more concern for the industry from the beginning of the crisis, like we saw early on in Europe and the USA,” she says. “But we are grateful for the financial support that we got in the spring. It gave us the breathing space we needed to move forward.”

Transat’s speciality is selling package tours and operating flights to popular tourist destinations, particularly those in Mexico, the Caribbean and Europe. Before Covid-19, the company had 5,200 employees. At the height of the crisis it had laid off up to 85% of the workforce, and currently has just 1,300. Guerard says that the airline is targeting to grow back to 4,300 employees by the end of 2023.

The pauses forced the carrier to critically review its processes and structures, and to do more with less. In 2018, Transat had launched a transformation project that saw it begin moving away from its tour operating business and travel agency network, and investing more in its airline. In the past year and a half, the company accelerated the project’s key initiatives, which include simplifying the fleet, flattening workforce hierarchies, centralising functions and implementing other cost-saving measures.

Transat, which had been one of the last airlines operating Airbus A310-300s, retired the last of the widebody twinjets in 2020. It also stopped operating Boeing 737NGs, leaving it with just two Airbus types: A321s and A330s.

After restarting flight operations on 30 July and spooling up in August, the airline had nine of its 10 4,000nm (7,410km)-range A321LRs in operation by September. Transat holds orders for seven more of the type, which it expects will enter the fleet in the next two years. The carrier also has seven A321ceos, which it hopes to reactivate by November, helping ensure the airline has enough jets to serve a network expected by winter to encompass 50 destinations

COCKPIT COMMONALITY

In addition, the airline has 12 widebody A330s – all are currently in storage, but Transat anticipates returning them to service in December.

“With this mix, we have attained cockpit commonality which provides several advantages, including that pilots have the ability to be current on more than one aircraft type at a time,” Guerard says.

Of course, the return of those aircraft depends on the return of Transat’s customers. And customers will come back only when movement becomes easier, and virus mitigation strategies are co-ordinated, especially across national borders.

“Today, it takes a PhD with a speciality in ‘travel restrictions’ to understand how to travel between countries,” she says. “Even if we are all vaccinated, the demand won’t come back because it will still be too complicated for people to travel.”

And with Canada’s federal election coming up in October, the tourism industry is currently not the government’s top priority.

In five years, though, Transat hopes to grow to 55 aircraft. Guerard is eyeing the 4,700nm (8,704km)-range A321XLR, which she calls a “superstar single-aisle” that is best suited for the routes Transat operates.

“Fifty-five aircraft is still a small fleet… We don’t want to go back to where we were, with a complex and not-well-adapted fleet, which in the past caused us many efficiency and utilisation problems,” she says.

So it is natural that in this new post-pandemic, post-failed-merger normalcy, Transat is looking to optimise its resources, to punch above its weight. Guerard alludes to something more ambitious than existing as just another low-cost leisure airline ferrying winter-weary Canadian snowbirds to sun-soaked Caribbean beaches.

“Our network was designed to serve point-to-point traffic, and we have clearly understood the limitations of operating in isolation,” she says.

“We want to offer more destinations and options to our clients. So we are looking at partners to do that, and alliances are a key part of our network development strategy,” she adds.

Airbus

Source: Liner/Shutterstock.com

A321LRs have re-entered service as Air Transat ramps up its operations

For the moment, she declines to name names. What she does reveal is that both North American and European airlines are in the mix.

“We have a strong asset to offer to potential partners, [and are] looking to increase our footprint between America and Europe and sun destinations. So, our approach right now is to start with simple bilateral agreements, which will give us some quick wins,” she says. “And these partnerships may evolve into something more important and strategic in the near future.”

Guerard says she was well prepared for her promotion to chief executive after spending more than three years as the company’s chief operations officer alongside now-retired former chief and airline co-founder Jean-Marc Eustache. During that time, she got a good look at the top job and spearheaded the fleet modernisation plan, digital and IT upgrades and revenue- and cost-management improvement efforts.

“There were no real surprises,” she says of the transition. “And it’s always great when the succession comes from within [the company]. It shows that the talent development management has worked well.”

STRONG RESOLVE

The past 18 months have steeled her resolve to lead the carrier out of the coronavirus disruption as a stronger, leaner and more-focused airline.

“We have always excelled in adversity. We are fighters, and we have gone to war together,” Guerard says of the company. “At the beginning, we felt comfortable to be able to deal with this kind of crisis, but of course we never expected that we would remain in crisis mode for so long.

“Over the past year and a half decisions needed to be co-ordinated very efficiently, whether it was managing cash flow, paying the bills, co-ordinating the layoffs, organising the recall, parking the airplanes or repatriating our clients. Everything had to be executed perfectly and fast.”

She says Transat’s employees rose to the challenge.

Just like the tattooed mechanics, peeling off their winter gloves on the ice-cold airport tarmac 20 years ago, ready to repair a wing. 

All Airbus: Air Canada Rouge Goes Full Narrowbody

From Simply Flying – link to source story – Thanks CW

by James Pearson | September 20, 2021

Air Canada Rouge, the lower-cost subsidiary and leisure airline of the Canadian flag carrier, took to the skies again in September. With the B767-300ER gone, its 39-strong fleet is now exclusively Airbus. They’re used on 60 routes until the end of the year as it rebuilds its network.

C-FJOK_Air_Canada_Rouge_Airbus_A321-211
The A321 is crucial to Air Canada Rouge, with this example delivered directly to the carrier in 2015. Photo: Liam Allport via Flickr.

Air Canada Rouge has resumed flying

Air Canada Rouge relaunched with an initial three routes from Toronto: Las Vegas, Orlando, and Regina, in the distant province of Saskatchewan. These were joined by Toronto to Cancun and Tampa a few days later, with all five routes using 200-seat A321ceos.

These were its first flights since February, with the seven-month grounding due to Canada’s non-essential travel ban and the suspension of all flights to the Caribbean and Mexico – two of its essential markets – at the request of the Canadian government. Rouge’s resumption coincided with Canada reopening its borders on September 7th to fully vaccinated foreigners.

Air Canada Rouge A321
Most international routes are by the A321 with stronger economics than the A319/A320. Remember, it is a lower-cost airline, i.e. about the cost of production rather than fares. Photo: Air Canada.

Now exclusively Airbus

Rouge’s fleet is now entirely narrowbody, ch-aviation.com shows, with 20 A319s, 14 A321s, and just five A320s. This follows the retirement of its B767-300ERs, of which it had 25 at one point.

Its 767s were, of course, mainly used long-haul, including across Europe and South America, and the type’s routes had an average of 2,378 miles, OAG indicates. At 5,063 miles, Toronto-Athens was its longest-ever 767 route, but Toronto to Las Vegas had the most flights.

Air Canada Rouge A319
Air Canada Rouge has 20 A319s, with an average age of 23.5 years. Photo: Air Canada.

Currently, five aircraft are active

According to Planespotters.net and confirmed by Flightradar24, only five of its 39-strong fleet – some 13% – is currently active, all A321s. Its A321 fleet has an average age of just 6.1 years, far younger than its A319s (23.5 years; to be retired) and A320s (14.2 years). The younger A321s were delivered directly to Air Canada Rouge.

No widebodies go hand-in-hand with Rouge previously saying that it’ll concentrate on routes within narrowbody range. Air Canada will instead operate suitably good-performing long-haul routes – many have already switched – in a rejigging of networks and focusing on relative strengths.

One of many examples is Toronto to Edinburgh, which was by Rouge’s 767s and from 2022 will instead be by its parent’s Boeing 737 MAX 8s from June 1st. It’ll compete directly with WestJet. Another: Toronto to Bogota, in Rouge’s hands from 2016, is now by Air Canada’s B787s and A330-300s.

Air Canada Rouge
Air Canada Rouge had up to 25 B767-300ERs. Photo: Tomás Del Coro via Flickr.

What’s the plan to the end of the year?

Between September 20th and December 31st, Rouge has scheduled 60 routes. Thirty-nine of these are to/from Toronto, with most of the rest from Montreal. With over 2,700 outbound flights planned, the domestic market has almost four in ten departures, comprising eight routes from Toronto.

Air Canada Rouge's network Sept 1st to Dec 31st
This is Air Canada Rouge’s network between September 20th and December 31st. Image: OAG Mapper.

Toronto to Québec City has the most flights

Some 13 international countries will welcome Rouge’s flights, with the US the most-served, followed by Cuba, Mexico, Dominican Republic, and the Cayman Islands. Toronto to Miami has the most international flights, as shown below, although the 456-mile domestic link from Toronto to Québec City (YQB) is the most-served, with 28 weekly departures from November.

  1. Toronto-Québec City
  2. Toronto-Moncton
  3. Toronto-Thunder Bay
  4. Toronto-Miami
  5. Toronto-Las Vegas
  6. Toronto-Tampa
  7. Toronto-Fort Myers
  8. Toronto-Fredericton
  9. Montreal-Orlando
  10. Montreal-Miami

Air Transat inaugurates its first direct flight between Vancouver and Quebec City

VANCOUVER, BC, Aug. 2, 2021 /CNW/ – Air Transat celebrates the launch of its brand-new direct service between Vancouver and Quebec City, becoming the first and only airline to operate this route. Flights will be offered once a week, on Mondays from Vancouver and on Sundays from Quebec City, until October 25.

From left to right: Charles Thivierge – Captain; Linda Lancup – Flight Attendant; Marie-Josée Paiement – Flight Attendant; Mario Blais – Captain; Sonia Renaud – Flight Director; Ghislain Charette – Flight Attendant (CNW Group/Transat A.T. Inc.)
From left to right: Charles Thivierge – Captain; Linda Lancup – Flight Attendant; Marie-Josée Paiement – Flight Attendant; Mario Blais – Captain; Sonia Renaud – Flight Director; Ghislain Charette – Flight Attendant (CNW Group/Transat A.T. Inc.)

“It was only natural for us to add this route to our summer schedule,” says Joseph Adamo, Transat’s Chief Sales and Marketing Officer. “As we predicted, travellers are showing a strong interest in domestic destinations, so we are pleased to offer them this new route linking two of Canada’s most important tourist hubs.”

This morning, to mark the inauguration of this new route, the 163 passengers of the very first TS969 flight from Vancouver were welcomed in a festive manner at the Vancouver International Airport (YVR). This comes a day after 185 passengers boarded the inaugural TS968 flight from Quebec City’s Jean Lesage International Airport (YQB).

“We are thrilled to welcome Air Transat back to Canada’s skies with its new service connecting YVR to beautiful Quebec City,” says Tamara Vrooman, President and CEO of Vancouver International Airport. “The addition of this seasonal flight provides travellers with more options when flying domestically from YVR and is a strong signal of confidence from Air Transat as it rejoins Canada’s airlines in the effort to reopen travel and tourism across the country, safely and in a measured approach. At YVR, we are ready to welcome back all passengers to the airport and are committed to delivering a safe and seamless experience to our passengers who, thanks to Air Transat, now have another great destination to visit direct from Vancouver.”

“Now that we can start travelling again, Air Transat is inviting people from Quebec City to discover Western Canada starting this summer,” says Stéphane Poirier, President and CEO of Quebec City’s Jean Lesage International Airport. “The addition of flights to Vancouver meets a demand expressed by the population for many years and is aligned with our objective to improve air service from Quebec City. We welcome Air Transat’s confidence in our market. We hope that passengers will choose YQB as their departure point for their next trip.”

The route will be operated by next-generation Airbus A321neoLR aircraft, which feature spacious cabins and state-of-the-art in-seat entertainment systems and have the lowest fuel consumption and greenhouse gas (CO2 and NOx) emissions in their class.

This summer, from Vancouver, Air Transat will also offer direct flights to Montreal and Toronto. 

About Air Transat
Air Transat is a leading leisure travel brand established nearly 35 years ago that offers domestic and connecting flights within Canada as well as international flights to destinations of choice in the Americas and Europe. Air Transat and its personnel strive to serve travellers with enthusiasm and friendliness, emphasizing safety at all stages of their travel experience. The carrier’s multiple initiatives aimed at reducing its carbon emissions include operation of a fleet of new-generation Airbus aircraft and development of sustainable aviation fuel (SAF). Air Transat has been voted World’s Best Leisure Airline by passengers at the Skytrax World Airline Awards.

Air Transat is a business unit of Transat A.T. Inc., an integrated international tourism company headquartered in Montreal that was awarded Travelife certification in 2018 in recognition of its sustainability commitments. Visit airtransat.com or follow us on Instagram, Twitter, LinkedIn and Facebook.

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

Air Canada’s Fleet In 2021

From Simple Flying – link to source story

As Canada’s largest airline, Air Canada has a diverse fleet based across its four hub airports. The network airline has a mix of both widebody and narrowbody aircraft coming from both Airbus and Boeing. The carrier has gone through some changes in the past few years, with more significant upheaval taking place during the global health crisis. Let’s take a look at Air Canada’s fleet as it stands in 2021.

The Boeing 787 is Air Canada’s flagship aircraft. Photo: Air Canada

Air Canada’s fleet composition

According to data from Planespotters.net, Air Canada has the following aircraft in its fleet. The quantities are noted in parentheses.

Aircraft from Airbus*:
  • A220-300 (22)
  • A320 (18)
  • A321 (15)
  • A330-300 (16)

*We should note that the airline ordered the A220 when it was still known as the Bombardier CSeries.

Aircraft from Boeing:
  • 737 MAX 8 (24)
  • 777-200LR (6)
  • 777-300ER (19)
  • 787-8 (8)
  • 787-9 (29)
The average age of Air Canada’s A330-300s is 16 years. Photo: Air Canada

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Outside of regular passenger service

There are aircraft within the Air Canada fleet that are outside of the airline’s passenger operations.

Notably, we have the airline’s private/charter subbrand, Air Canada Jetz. This sub-group consists of four Airbus A319s. This fleet traditionally consisted of three A319s, but it appears a fourth was added in December 2020.

Used to transport touring musicians, sports teams, or private groups, these aircraft have an all-business configuration of 58 seats. With the exception of a short pandemic run, these aircraft tend to stay out of Air Canada’s regular passenger operations.

The Jetz jets flew an all-business-class service during the Winter of 2020 but are typically reserved for special charter operations. Photo: Ken Fielding via Wikimedia Commons 

As we will mention further in this article, Air Canada retired its 767s at the start of the health crisis. However, some of these are slated for a full conversion to freighters. The airline says that two freighters are expected to be in service in time for this year’s fourth-quarter peak airfreight season.

With seven 767s on the list for conversion, it looks like the remaining five will be converted next year, in 2022. This was confirmed by the carrier’s current Chief Financial Officer and future Chief Executive during the earnings call in which Simple Flying attended:

“We’d love to have all seven up and operating by the end of next year. These are typically little bit of a longer process and slots are not really available, but we are certainly working on having all seven up and running by Q4 of next year.” – Michael Rousseau, Chief Executive Officer, Air Canada

Coming and going

On the outgoing side of things, it was in May 2020 that Air Canada announced the early retirement of 79 aircraft. 

Retirements included five 767-300ERs, 16 A319s, and 14 E190s in the mainline fleet. Another 25 767-300ERs and 22 A319s that made up Air Canada Rouge were also retired.

Air Canada took delivery of its first A220 back in January 2020. Photo: Air Canada

Looking at future aircraft, Air Canada has a decent number of Boeing 737 MAX 8s and Airbus A220-300s yet to be delivered. There was a little bit of a back-and-forth when the carrier announced it would be canceling some of its orders last November. The plan would have seen the airline cancel orders for 12 A220s and 10 737 MAX 8s.

However, one condition of the carrier’s government rescue package was that it would proceed with its planned orders for both aircraft types. As it stands, 16 737 MAX 8s and 23 A220-300s are still on the way.

As you can see from the list of aircraft, Air Canada has a fairly diverse fleet- which is quite typical of a large network carrier that operates both short-haul and intercontinental service.

Air Canada Eyes The A321LR As More A220s Set To Be Delivered

From Simple Flying – link to source story

by Jake Hardiman | May 7, 2021

While Air Canada does fly the Boeing 737 MAX series, most of its narrowbody aircraft belong to Airbus families. These include the five-abreast A220 series, of which the airline is set to receive a further 15 examples by the end of 2022. Interestingly, the Canadian flag carrier has also revealed an interest in Airbus’s long-range A321LR model.

Air Canada Airbus A220
The A220 has become popular among Air Canada’s passengers. Photo: Vincenzo Pace | Simple Flying

Four A220s delivered in Q1

Air Canada announced today at its first-quarter earnings call that it has continued its short-haul fleet modernization despite the industry’s present challenges. The Airbus A220 is leading the way in this regeneration, with Air Canada favoring the A220-300 variant.

This next-generation narrowbody has won favor among both employees and passengers for its enhanced efficiency and comfort levels. According to Planespotters.net, Air Canada presently has 19 137-seat A220-300s in its fleet, of which 17 are active. Of these, more than 20% arrived in Q1 of 2021. Indeed, the airline confirmed on the aforementioned call that “we took delivery of four Airbus A220 aircraft in the first quarter.”

Air Canada TCA A220 Retrojet
C-GNBN sports a stunning retro TCA livery. Photo: Air Canada

These four first-quarter arrivals came in the form of the following aircraft.

Next 15 deliveries also secured

The introduction of the A220 has played a significant role in the regeneration of Air Canada’s short-haul fleet. The type will replace its remaining A319s, which have an average age of 24 years. Amid the pandemic, it has not been unusual to see carriers defer orders. However, regarding its remaining A220s, the airline confirmed that:Advertisement:

“In March 2021, Air Canada concluded a committed secured facility totaling US$475 million to finance the purchase of the next 15 Airbus A220 aircraft scheduled for delivery in 2021 and 2022.”

Air Canada A220
Air Canada will receive its remaining A220s by the end of 2022. Photo: Vincenzo Pace | Simple Flying

Potentially a place for the A321LR as well

In the longer term, Air Canada will be hoping that it can resume its longer-haul services to transatlantic destinations such as the UK and mainland Europe. However, ongoing uncertainty remains regarding different countries’ restrictions and vaccination rates.

As such, it may not see the demand levels that it had become accustomed to before coronavirus. With this in mind, the airline is open to trying new aircraft types in order to adapt to market fluctuations. For example, it stated that:Advertisement:

We’ve done a pretty good job covering ourselves for growth beyond our expectations, but certainly also for even further fine tuning. (…) That gives us the opportunity to then potentially step into new types of aircraft. Like the A321LRs, for example, that we like, and that certainly have a potential place in Air Canada’s fleet as we go forward.

Air Transat Airbus A321
Air Transat operates both first-generation (pictured) and ‘neo’ variants of the A321, including the latter’s ‘LR’ version. Will Air Canada follow suit in this respect?  Photo: Vincenzo Pace | Simple Flying

Of course, the carrier would not be the first Canadian airline to deploy this long-range version of the Airbus A321neo series. Indeed, Air Transat, whose merger with Air Canada was recently canceled, has operated the type since 2019. Last October, Air Transat even set the record for the world’s longest flight using the aircraft.

This saw it fly non-stop from Montréal, Canada to Athens, Greece. This represented an impressive distance of 7,600 km (4,100 NM), although it has since been beaten by Azores Airlines. Nonetheless, with the aircraft being an ideal fit for ‘long thin’ transatlantic markets, Air Canada’s interest is understandable. 

Transat ponders ‘plan B’ should Europe reject Air Canada takeover

From Flight Global – link to source story

By Pilar Wolfsteller | 11 March 2021

Transat AT, parent of Canadian holiday-focused airline Air Transat, is working on a “plan B” in case its planned acquisition by Air Canada falls through.

The Montreal-based low-cost carrier, which has suspended operations due to Canada’s coronavirus mitigation measures, on 11 March says it has developed plans that will allow it to stand alone if the European Commission (EC), the last regulatory body to decide on the transaction, declines to green-light its deal with Air Canada.

The deal could also collapse if either company decides to back out.

The marriage of Canada’s number one and number three airlines, announced the transaction in 2019 and delayed several times due to the coronavirus pandemic, is currently in a state of limbo after a deadline expired on 15 February. Since that date has now passed, it can be terminated by either party at any time.

AIr Transat Airbus A321neo
Source: Shutterstock

An Air Transat Airbus A321neo taking off from Montreal in December 2020

“The agreement lives on with each party being able to walk away from the deal at any time as long as the EC approval has not been obtained,” says Transat’s chief executive Jean-Marc Eustache during the carrier’s fiscal first-quarter earnings call. “The clock on the Commission’s investigation has been stopped for a while but we expect it to restart very soon.”

“A decision will come before the first half of the year is over,” he adds. “We are fast approaching a resolution, whichever it is.”

The airlines had initially expected the deal to close by mid-2020. But the coronavirus pandemic and ensuing industry crisis threw that plan off track and forced a rework of terms.

The precipitous decline in air travel demand prompted Air Canada last October to slash the price it was willing to pay for its Montreal-based competitor to C$5 ($3.98) per share from its original offer of C$18 per share. Transat’s shareholders overwhelmingly approved the new offer in December, seeing it as a lifeline for the ailing company.

The Canadian government approved the merger in early February, subject to several conditions, including job assurances, a commitment to maintain the airline’s aircraft in Canada (preferably in Quebec), the launch of new destinations within five years and what the government called “a price-monitoring mechanism”.

In January, Canadian billionaire investor Pierre Karl Peladeau made another takeover bid for Transat, allegedly for more than Air Canada’s offer. At the time, Transat rejected it outright, calling it a public relations ploy.

“The transaction with Air Canada is still active, and prevents us from having discussion with any other parties. But should the agreement with Air Canada come to an end, we will actively consider all other options,” Eustache says.

“There is no need to worry about the plan B, a lot of work is being done in the background and all of it will come into the foreground if and when the time is right,” he adds.

’LEANER AND MEANER’ 

Executives did not disclose details about Transat’s contingency plan, but chief operations officer Annick Guerard says the company is reviewing its long-term strategy, to “fix what might have hindered us in the past”.

“We are constantly updating and fine-tuning a restart plan for a leaner and meaner Transat that will be in a position to play its best cards in a post-pandemic world,” Eustache says. “There is still no certainty as to exactly when and how fast this recovery will happen, but it will. The vaccine is there, we can now expect to have hit the bottom and we can move up now.”

Eustache adds that Transat has used the pandemic-driven pause to improve operations and processes, and to streamline its fleet to reduce cost and complexity.

The airline retired its six widebody Airbus A310s last year and accelerated retirement of Boeing 737s, as it transitions to an all-Airbus fleet.

Transat is acquiring A321neos, a type Guerard calls efficient and well-suited to Transat’s network. A321neos have “spectacular performance” on long-haul routes, she adds.

The airline anticipates accepting seven of those jets this year. Transat has 17 A321neos on order with Airbus and may order more, Guerard says.

”This choice of aircraft is by far the best fleet decision we have made in years,” she adds.

CANADIAN RESTRICTIONS

Transat’s recovery – and that of Canada’s broader air transport industry – has been severely hampered by Canadian travel restrictions imposed to mitigate the spread of the highly-contagious virus. Travellers inbound to Canada must test negative for Covid-19 and, upon arrival, are subject to 14-day quarantines. Those, and province-specific rules, have made domestic and international travel difficult and complicated.

Canada’s federal government has not offered sector-specific pandemic-relief aid to airlines. In response to the pandemic, airlines have shed thousands of jobs and repeatedly trimmed their networks.

In January, the government asked all major carriers to suspend operations to so-called “sun destinations” through 30 April, meaning airlines have been unable to capitalise on demand for flights to warm winter holiday destinations.

Transat is unsure if those routes will resume at the end of next month, making long-term planning difficult.

“We expect to restart our operations in mid-June, which marks the start of summer demand,” says Guerard. Depending on travel restrictions, Transat plans to ramp up a “modest” operation that would include domestic routes, flights to some US cities and routes to “a few medium-haul sun destinations and some key European destinations”.

“We are ready to increase capacity in a short period of time,” she adds.

Transat’s revenue during the fiscal-year first quarter (which ended on 31 January) fell 94% year-on-year to C$41.9 million, down from C$692.8 million one year earlier. The company posted a first-quarter loss of C$109 million.

“These results are for a quarter where it was once again impossible to operate our business in a sustainable manner,” Eustache says.

“Our priority for the current quarter, while continuing to work on obtaining EU approval, is to secure financing, finalise our recovery plan and review all our options in the event the transaction with Air Canada will not take place,” Eustache adds.

Future of travel: these five planes could change everything

From the National News – link to source story

Patrick Ryan, Dec 29, 2020

Supersonic speeds and less fuel consumption could become the norm for air travel

The future of airline travel is set to change forever with the advent of a new era of high-powered jetliners.

Travelling further distances at higher speeds while burning less fuel has long been seen as a pipe dream for the industry – but that could all be about to change.

With travel habits expected to change, not least because of the Covid-19 pandemic, The National looked at some of the new planes that are expected to be at the forefront of the next generation of flight.

Boom Supersonic Overture

The Oregon-based company Boom Supersonic is set to release the Overture in 2026. The aircraft can fly at twice the speed of sound at Mach 2.2 but is expected to be limited to subsonic speeds of around 1,125kph over land.

It will be the first civilian supersonic jet since Concorde was retired almost 20 years ago.

The company has promised that prices would not be much higher than a typical seat in business class.

How the interior of the Boom Supersonic Overture is expected to look.  Courtesy: Boom Supersonic
The planned interior of the Boom with a distinctive 1+1 single aisle configuration. Courtesy: Boom Supersonic

The Overture will be able to fly from Tokyo to Seattle in four and a half hours, cutting four hours off the usual time.

A trip from Los Angeles to Sydney could be completed in eight and half hours with the Overture, instead of the standard 14.5 hours.

The Overture also has a range of 8,300 km.

Maveric by Airbus

The suggestion that Airbus has created a plane that looks like it belongs in a futuristic version of Top Gun will not be allayed by its name – Maveric (Model Aircraft for Validation and Experimentation of Robust Innovative Controls).

The plane, which is 2 metres long and 3.2 metres wide, has the potential to reduce fuel consumption by up to 20 per cent in comparison to current single-aisle aircraft.

The Maveric is designed to hold hundreds of people but experts predict we could have to wait until 2035 before we see aircraft using this design in regular use.

It is currently in the development phase but a remote controlled prototype took flight for the first time in June last year.

The “blended wing body” opens up new possibilities for propulsion systems as well as resembling a giant bat.

“Airbus is leveraging emerging technologies to pioneer the future of flight. By testing disruptive aircraft configurations, Airbus is able to evaluate their potential as viable future products,” said Jean-Brice Dumont, executive vice president of engineering with Airbus.

“Although there is no specific time line for entry-into-service, this technological demonstrator could be instrumental in bringing about change in commercial aircraft architectures for an environmentally sustainable future for the aviation industry.”

Airbus A220-500

The Airbus A220-500 is expected to make travelling in economy class a whole lot more comfortable.

Expected to be released in the second half of this decade, the A220-500 boasts seats at least 46cm wide, has a 2×3 seating layout, and can hold 150 passengers – a significant increase from the existing A220s, which hold 100.

The new model also offers larger windows as well as spacious overhead lockers for storage.

The A220-500 will consume less fuel than other regional planes, which will make shorter flights more appealing to environmentally conscious passengers.

Boeing 777X

Boeing claims its new 777X will be the “world’s largest and most efficient twin-engine jet, unmatched in every aspect of performance”.

Lufthansa will launch the jet into service in 2022, two years after it was delayed because of the Covid-19 pandemic.

Inside the Boeing 777X. Courtesy: Boeing
Inside the Boeing 777X. Courtesy: Boeing

The 777X will carry between 384 and 426 passengers in a multi-class layout.

The aircraft will also feature dimmable windows, wider cabins and bigger sized overhead lockers.

Expect to see this plane become a regular feature at Dubai International Airport as Emirates has ordered 150 777Xs, worth more than $83 billion. The aircraft are expected to seat 426 passengers and has a range of 13,500 km.

Airbus A321XLR

Airbus’ A321XLR will be able to fly just under 8,700km nonstop. A third fuel tank means it can fly for up to 10 hours without needing to refuel – which is almost double that of other narrow bodied planes.

Airbus also claims the aircraft, which is expected to be released in 2023, operates with a 30 per cent reduction in fuel burn per seat.

The A321XLR has a top speed of 876kph.Updated: December 29, 2020 04:08 PM

Transat A.T. Inc. – Results for third quarter of 2020

Third quarter reduced to one week of operations
Approval of transaction with Air Canada still pending

For the third quarter:

  • Revenues of $9.5 million
  • Adjusted operating loss1 of $79.9 million (operating loss of $132.0 million)
  • Adjusted net loss3 of $139.8 million (net loss attributable to shareholders of $45.1 million)

Resumption of operations:

  • Partial resumption of flights and tour operations since July 23, 2020
  • 23 international routes and a summer domestic program operated mainly during the fourth quarter

Financial position:

  • Cash and cash equivalents of $576.4 million as of July 31
  • Advanced discussions to set up additional financing
  • Air Canada’s consent may be required

Transaction with Air Canada:

  • Canadian approval process still underway to obtain a decision from the government
  • In-depth investigation by the European Commission since August 20; decision expected by December 11
  • If the required regulatory approvals are obtained and conditions are met, it is expected at the present time that the arrangement will be completed during the fourth quarter of the 2020 calendar year

MONTRÉAL, Sept. 10, 2020 /CNW Telbec/ – Transat A.T. Inc., 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, 2020.

“The reduction of operations to just one week for this quarter is unprecedented for Transat and for the industry as a whole. Given the dynamic measures we took to protect the Corporation and its cash flow, we’re ready for the recovery,” stated Jean-Marc Eustache, President and Chief Executive Officer, Transat. “However, with Canada maintaining some of the most stringent border restrictions and still requiring quarantine for people returning from abroad, it’s time for the government to provide targeted support for the airline sector to ensure the existence of a competitive industry in Canada over the long term.”

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 the destinations the Corporation flies to, and the need for quarantine and physical distancing measures create significant demand uncertainty for the remaining part of fiscal 2020 and at least for fiscal 2021. For the moment, the Corporation cannot predict all the impacts of COVID-19 on its operations and results, or when the situation will improve. Until the Corporation is able to resume operations at a sufficient level, the situation will affect its cash position. However, the Corporation has implemented a series of operational and commercial as well as financial measures, including cost reduction, aimed at preserving its cash flow. The Corporation is monitoring the situation daily to adjust these measures as it evolves.

The Corporation has taken the following measures regarding the COVID-19 pandemic:

  • From April 1, and through July 22, the Corporation suspended all its flights and constantly monitored demand and constraints by destination in order to gradually return to operations;
  • In March, as a precautionary measure, the Corporation drew down on its $50.0 million revolving credit facility agreement. It is now in advanced discussions to set up additional financing. As at July 31, the Corporation’s cash and cash equivalents totalled $576.4 million;
  • Senior executives and the Board of Directors agreed to a voluntary reduction in their compensation from 10% to 20%;
  • In March, the Corporation decided to early retire all of its Airbus A310s from its fleet;
  • In order to protect its cash and allow recovery after the restrictions have been lifted, the Corporation has granted its customers transferable travel credits with no expiry date for flights cancelled due to the exceptional situation and including travel restrictions imposed by governments;
  • Since March, the Corporation has been renegotiating with aircraft lessors, as well as with owners of premises it occupies, to defer a number of monthly lease payments. The Corporation has also been negotiating with its suppliers to benefit from cost reductions and changes in its payment terms, and has implemented measures to reduce expenses and its investments. Preserving cash is a priority for the Corporation and other opportunities are being evaluated to achieve this objective;
  • As of the end of March, the Corporation proceeded with the gradual temporary layoff of a large part of its personnel, reaching approximately 85%; for the resumption of operations, the Corporation recalled to work approximately 1,000 employees, but two thirds of its personnel remains laid off;
  • In April, the Corporation made use of the Canada Emergency Wage Subsidy (“CEWS”) for its Canadian workforce, which enabled it to finance a portion 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, without work counterpart;
  • The Corporation currently anticipates that it will be forced to lay off at least 2,000 employees or 40% of its workforce in the future.

Third Quarter Highlights

Since mid-March, restrictions on international travel and government-imposed quarantine measures have made travel sales very difficult. The Corporation suspended all of its flights as of April 1 and therefore had no more sales from that date, until the partial resumption of airline operations on July 23, 2020. As a result, these factors caused the fall in revenues. The Corporation recognized revenues of $9.5 million during the quarter, a decrease of $689.4 million (98.6%) compared with 2019.

Operations generated an operating loss of $132.0 million compared with operating income of $1.7 million in 2019, a deterioration of $133.7 million. Despite the absence of revenues up to July 23 and despite the cost reduction measures implemented to deal with the COVID-19 pandemic, the Corporation was obliged to maintain certain fixed costs during the suspension of airline operations; as a result, the fall in revenues was more pronounced than the decrease in operating expenses. The decline in operating results was accentuated by the unfavourable settlement of fuel-related derivative contracts. Transat reported an adjusted operating loss1 of $79.9 million compared with an adjusted operating income1 of $62.1 million in 2019, a deterioration of $142.0 million.

Net loss attributable to shareholders amounted to $45.1 million or $1.20 per share compared with $1.5 million or $0.04 per share in 2019. Net loss attributable to shareholders for the quarter includes a $67.7 million gain for changes in the fair value of fuel-related derivatives and other derivatives due to the significant recovery in fuel prices during the quarter, a $28.5 million foreign exchange gain mainly related to the remeasurement of lease liabilities. These gains reversed a very large portion of losses of the same nature included in the loss attributable to shareholders for the second quarter announced last June. Excluding non-operating items, Transat reported adjusted net loss3 of $139.8 million ($3.70 per share) for the third quarter of 2020, compared with adjusted net income3 of $6.2 million ($0.16 per share) in 2019. 

Nine-Month Period Highlights

As a result of the above factors, the Corporation experienced a significant deterioration in its performance for the nine-month period ended July 31. The impact of the pandemic annihilated a very good start to the fiscal year, as the adjusted operating income1 for the first four months of the year was up $63.3 million compared with 2019, due to a significant improvement in the profitability of the sun destinations program, our main program during the winter season.

Considering the impacts of COVID-19, the Corporation recognized revenues of $1.3 billion, a decrease of $970.3 million (43.2%) compared with 2019, and operations generated an operating loss of $186.6 million, compared with $50.7 million in 2019, a deterioration of $136.0 million. Transat reported adjusted operating loss1 of $31.4 million compared with adjusted operating income1 of $94.9 million in 2019, a deterioration of $126.3 million.

Net loss attributable to shareholders amounted to $258.5 million or $6.85 per share compared with $55.4 million or $1.47 per share for the corresponding nine-month period of last year. Net loss attributable to shareholders for the quarter includes a $29.3 million charge for changes in the fair value of fuel-related derivatives and other derivatives due to the collapse in fuel prices in the second quarter, a $21.7 million charge to reduce the carrying value of deferred tax assets and a $7.4 million foreign exchange loss mainly related to the remeasurement of lease liabilities. Before non-operating items, Transat reported adjusted net loss3 of $198.9 million ($5.27 per share) for the first nine months of 2020, compared with $39.5 million ($1.05 per share) in 2019.

Financial position

As at July 31, 2020, cash and cash equivalents amounted to $576.4 million, compared with $723.8 million on the same date in 2019. This change was mainly attributable to a significant decrease in profitability, the acquisition of one replacement engine for the A321neo LR fleet ($16.6 million), and to costs related to the transaction with Air Canada ($15.3 million), partially offset by the $50.0 million drawdown on its revolving credit facility agreement.

The working capital ratio was 0.93, compared with 1.10 as at July 31, 2019. This change was mainly attributable to the increase in the current portion of lease liabilities and the decrease in cash and cash equivalents.

Deposits from customers for future travel amounted to $638.1 million, compared with $611.1 million as at July 31, 2019, an increase of $27.0 million.

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 July 31, 2020 included these travel credits amounting to $564.0 million, 43% of which was placed in trust, with the difference representing deposits made directly with Air Transat or foreign subsidiaries. This exposes the Corporation to litigation and enforcement measures by legislative and regulatory authorities, including class action suits, which the Corporation intends to contest in good faith and with good reason.

Following the adoption of the IFRS 16 accounting standard, leases with terms of more than 12 months are now recorded as right-of-use under assets and as lease liabilities under liabilities. As at July 31, 2020, lease liabilities amounted to $909.2 million.

Off-balance-sheet agreements, excluding contracts with service providers, stood at $847.1 million as at July 31, 2020. This amount was composed of commitments to take delivery of the 11 undelivered A321neos.

As it is impossible to assess the pace of recovery or the possible evolution of the pandemic and its effects, the Corporation, similarly to the vast majority of air carriers and other travel industry players in the normal course of their operations following the impacts of COVID-19, is currently reviewing various opportunities to increase its cash flow. In particular, the Corporation is continuing discussions initiated in the second quarter with its financiers and the various levels of government to improve its cash flow.

IFRS update

The Corporation adopted IFRS 16, Leases, on November 1, 2019. The 2019 comparative figures have been restated to reflect these changes.

To sum up, the adoption of this standard resulted in increases of $748.4 million in assets, $716.9 million in liabilities and $22.7 million in equity, respectively, as at October 31, 2019. For the year ended October 31, 2019, the adoption of this standard resulted in an increase in net income attributable to shareholders of $0.8 million. The main changes related to the adoption of IFRS 16 are described in note 3 to the interim condensed consolidated financial statements for the quarter ended July 31, 2020.

Resumption of operations

Having partially resumed its flights and tour operator activities on July 23, 2020, Transat is currently operating a condensed flight schedule for the summer with 17 destinations. It serves 11 European destinations (in France, the United Kingdom and Portugal) and three destinations in the South (Mexico, Dominican Republic and Haiti) from Montréal or Toronto, as well as a domestic program linking the main Canadian airports (Montréal, Toronto, Calgary and Vancouver). The Corporation will continue to adjust its programs based on border restrictions and health measures in place.

The Traveller Care program aims to ensure the safety and peace of mind of the Corporation’s customers with new health measures at check-in, at boarding, on board and at destination.

On August 4, 2020, the Corporation announced a winter program including, at the height of the season, flights to many destinations to the Caribbean, Mexico, Central America and South America, the United States, Europe and Canada. A selection of hotel packages in the South and in Europe will also be offered.

Outlook

In the current situation, it is 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 and 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 third quarter of fiscal 2020 (and that of October 31, 2019) 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 2020 or winter 2021.

Discussions relating to the sale of the Corporation

On August 23, 2019, Transat’s shareholders approved the arrangement agreement with Air Canada, under which it is provided that Air Canada will acquire all issued and outstanding shares of Transat for a cash consideration of $18.00 per share [the “arrangement”]. The arrangement remains subject to certain customary closing conditions, including regulatory approvals, particularly those of authorities in Canada and the European Union.

Notably, a public interest assessment regarding the arrangement is being undertaken by Transport Canada. On March 27, 2020, as part of this assessment process, the Commissioner of Competition released the report provided to Transport Canada summarizing his assessment of the impacts on competition. On May 1, 2020, Transport Canada in turn provided its assessment report to the Minister of Transport.

On May 25, 2020, the European Commission decided to open an in-depth (“Phase II”) investigation to assess the transaction with Air Canada. This extension is part of the European Commission’s normal process of assessing the impact of transactions submitted for its approval, which is currently complicated by the COVID 19 pandemic and the impact it is having on the international commercial aviation market. On September 1, 2020, with retroactive effect to August 20, 2020, the European Commission ended the suspension of the deadline decided on June 9, 2020 and set a new provisional deadline of December 11, 2020 for its decision.

While the Corporation remains firmly committed to completing the transaction with Air Canada, certain factors beyond its control and related to the COVID-19 pandemic could influence the outcome of the proposed arrangement. The market conditions of the global industry have been completely transformed. Among other things, the vast majority of North American, European and international air carriers have requested financial assistance measures, but have had to implement reductions in capacity (as the Corporation did). This context could impact the obtaining of approvals from regulatory authorities, especially regarding the appropriate package of remedies aimed at obtaining those approvals.

Moreover, owing to the pandemic and the continued restrictions on non-essential travel, the Corporation is actively looking to obtain additional sources of financing. The covenants undertaken under the arrangement agreement with Air Canada restrict and govern the Corporation’s capacity to obtain additional sources of financing and may require Air Canada’s prior consent. Although the agreement provides that Air Canada’s consent may not be unreasonably withheld, there is no certainty that Air Canada will consent to the obtaining of additional sources of financing by the Corporation.

If the required approvals are obtained and the conditions are met, it is now expected that the arrangement will be completed during the fourth quarter of the 2020 calendar year. Under the arrangement agreement, the deadline for obtaining the regulatory approvals cannot be extended beyond December 27, 2020. This date, initially set for June 27, 2020, may be deferred, to the extent that the regulatory approvals are not obtained, for three one-month periods upon notification by one of the parties, and subsequently for three additional one-month periods under certain conditions. The Corporation has successively informed Air Canada of its decision to activate the first three initial one-month periods, which defers, for now, the June 27 deadline to September 27, 2020.

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

Air Transat makes its first two delivery flights with a sustainable aviation fuel (SAF) blend, a first for the Airbus plant in Hamburg, Germany

Delivery of two new Airbus A321neoLRs to Air Transat

MONTREAL, July 17, 2020 /CNW Telbec/ – Air Transat is making its first two delivery flights today and tomorrow with its new jets fuelled by a kerosene blend containing 10% sustainable aviation fuel (SAF), a first for the Canadian carrier. It is also a first for the Airbus plant in Hamburg, Germany, which produces these aircraft, because until today delivery with SAF was offered only to Airbus customers at its plants in Toulouse, France, and Mobile, Alabama. The first aircraft took off at 2:04 p.m. (local time) from Hamburg Finkenwerder Airport (XFW) and will land at approximately 4:00 p.m. (local time) at Montreal–Trudeau International Airport (YUL). The second will depart the next day, Saturday, July 18.

First delivery of an Airbus A321LR for Air Transat with sustainable aviation fuel (left to right): Damien Imbert, Head of Contracts Delivery, Airbus Hamburg; Capt. Manuel Chabot, Air Transat; Gunnar Gross, Project Leader Sustainable Air Fuel Airbus Hamburg; Jürgen Kuper, General Manager Air bp Continental Europe; Capt. Andrew Gordon, Air Transat; Ronny Stelter, Consultant Manager New Aircraft Acceptance and Delivery, AerCap (CNW Group/Transat A.T. Inc.)

“It is an honour for us and a sign of confidence from Airbus to be, together with AerCap, its first customer to take advantage of this new delivery option at its Hamburg plant,” said Jean-François Lemay, President and General Manager, Air Transat. “This initiative is part of our commitment to reducing our own carbon footprint while contributing to the achievement of the airline industry’s ambitious decarbonization targets.”

Christian Scherer, Chief Commercial Officer Airbus, commented: “Sustainability and efficiency are essential for our customers and for Airbus. Sustainable aviation fuel developments will play a key role in reducing the environmental footprint of the aviation industry. By using sustainable aviation fuels on delivery flights with partners like AerCap and Air Transat, who are flying the aircraft from Hamburg to their Canadian home base non-stop, we take concrete action to contribute to a more sustainable aviation future.”

And Philip Scruggs, President and Chief Commercial Officer of AerCap, stated: “We are very pleased to be a part of this historic milestone, working together with our partners at Airbus and with our long-time customer, Air Transat, to help them meet their sustainable growth ambitions. The A321neoLR will allow Air Transat to generate significant fuel savings while reducing the environmental impact of its operations.”

Both delivery flights are carbon-neutral because the kerosene fossil fuel portion was offset by the purchase of carbon credits. “We are proud to be the first Canadian carrier to operate carbon-neutral flights, and we will continue to pursue our commitment to providing our passengers with a travel experience that takes account of our environmental footprint,” Mr. Lemay continued.

Produced by the Hydroprocessed Esters and Fatty Acids (HEFA) process by Neste and supplied by AirBP, the sustainable fuel for both flights is certified by the International Sustainability and Carbon Certification (ISCC) system and meets the sustainability requirements of the European Union’s Renewable Energy Directive.

Air Transat and Airbus have a long-standing and productive partnership on environmental matters. Since its inception, Air Transat’s Environment department, with the technical support of the Airbus team, has implemented several projects aimed at improving fuel efficiency and environmental management of its flight operations and facilities, including the fuel management program and ISO14001 certification.

These two aircraft, which are the fifth and sixth Airbus A321neoLRs that Air Transat is adding to its fleet, are part of an agreement with AerCap for the long-term lease of 17 A321neos (16 in LR version). These new-generation aircraft consume 15 percent less fuel than the previous generation of Airbus jets.

Air Transat recently announced another important SAF initiative. The carrier has reached an agreement with the SAF + Consortium of Montreal to purchase a large portion of its SAF production, which will be made from CO2 produced by large industrial emitters. Using a process called Fischer Tropsch (FT), the CO2 will be captured and converted into synthetic aircraft fuel, which is estimated to have an 80% lower carbon footprint than conventional jet fuel.

Air Canada Warms To A321LR After Cancelling 737 MAXs

News from Forbes – link to story

Will Horton Senior Contributor, Aerospace & Defense | 20 May 2020

The Airbus A321LR may have an opening to replace Air Canada’s cancelled Boeing 737 MAX 9 aircraft.

Air Canada cancelled 11 737 MAXs in March so it could have flexibility to order other aircraft, according to CFO Michael Rousseau. The change reduced Air Canada’s firm MAX order from 61 to 50.

“It gave us some optionality on potentially some other planes we might want to look at in the middle of the decade,” Rousseau told the Wolfe Global Transportation Conference. “Those 11 were basically being delivered in the middle of this decade.”

Air Canada Registration number C-GEHV which had just come in as Flight AC 758, from San Francisco, a 737 Max 8, is rolled out of the gate after being grounded,
TORONTO, ON- MARCH 13 – Air Canada Registration number C-GEHV which had just come in as Flight AC … [+] TORONTO STAR VIA GETTY IMAGES

Rousseau did not specify the candidates to replace the MAX 9, but he was upbeat when asked about the A321neo.

“The LR would be more interesting to us than the neo,” he said. The A321LR has been increasingly out-performing the 737 MAX 9 on payload and range. “We’ll see how the market evolves.”

Air Canada operates 15 A321s. “They’re good, cost-efficient planes for us,” Rousseau said. “We like A321s.”

Air Canada’s 2013 selection of the 737 MAX over the A320neo family was a major win for Boeing BA since Air Canada never operated the 737 NG and has no A320neo family aircraft on order.

08/26/08 - MISSISSAUGA, ONTARIO - Ahmad Shah, 21, a serviceman with Consolidated Aviation Fueling of
08/26/08 – MISSISSAUGA, ONTARIO – Ahmad Shah, 21, a serviceman with Consolidated Aviation Fueling of … [+] TORONTO STAR VIA GETTY IMAGES

Rousseau is positive about the 737 MAX 8, of which it has received 24. “We still like the plane,” he said. “It’s very good for Air Canada.”

The 737 MAX can help re-build traffic after COVID-19, Rousseau said.

“We think North American markets come back first,” he said. “Planes like the Airbus A220 and the MAX are the two most efficient planes to support that market.”

Air Canada expects the 737 MAX grounding to be lifted later this year, improving financing options.

“Once ungrounded, we believe the market will finance the MAX,” Rousseau said. “Also EXIM is back in business.” Air Canada will finance future MAX deliveries via EXIM, EETC or sale and lease back.

737 MAX customer Southwest Airlines LUV noted it is hard to argue for MAX grounding compensation while COVID-19 grinds most traffic to halt. This dilemma is not applicable for Rousseau.

“We’ve come to terms with Boeing already,” he said. “There won’t be any more adjustments from what we had already negotiated.”

The MAX reduction was not because of the start of the coronavirus outbreak, Rousseau said. “It was a purely independent fleet decision we made to give ourselves a little more fleet flexibility.”

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