Category Archives: Air Transat

Air Canada acquires Transat, Air Transat to be merged into Air Canada

Air Transat Airbus A321-211 WL C-GTXV (msn 6526) YYZ (TMK Photography). Image: 946807.

Air Canada and Transat A.T. Inc. announced today that they have concluded a definitive Arrangement Agreement that provides for Air Canada’s acquisition of all issued and outstanding shares of Transat and its combination with Air Canada. Under the terms of the binding agreement, unanimously approved by the Board of Directors of Transat, Air Canada will acquire all outstanding shares of Transat for $13 per share. The value of the all-cash transaction is approximately $520 million.

Air Canada and Transat A.T. Inc. Conclude Definitive Arrangement Agreement for Combination of the Two Companies (CNW Group/Air Canada)

The transaction remains subject to regulatory and shareholder approvals and other closing conditions usual in this type of transaction. If such approvals are obtained and conditions are met, the transaction is expected to be completed in early 2020.

Unanimous approval of the Transat Board of Directors

Following an approach from Air Canada in the Fall of 2018, Transat and Air Canada commenced discussions in late 2018 to explore a possible combination. Transat formed a Special Committee of independent directors to evaluate the proposal with the assistance of financial and legal advisors, consider, and if deemed advisable, undertake a process for the formal review of strategic alternatives, consider any alternative proposal, and make recommendations to the Board of Directors in the best interests of the Corporation and all its stakeholders. The Special Committee of the Board of Directors of Transat and its Board of Directors have since then met multiple times in connection with all expressions of interest received by Transat, including Air Canada’s proposal.

On April 30, 2019, the Corporation announced having received expressions of interest and being in preliminary discussions with more than one party concerning a potential transaction involving the acquisition of the Corporation.

On May 15, 2019, Air Canada and Transat entered into a Letter of Intent with an exclusivity period to complete due diligence and to finalize definitive documentation reflecting the agreed terms. After that date, other parties continued to express unsolicited, non-binding interest in Transat.

On June 26, 2019, after an extensive review, the Special Committee of Transat’s Board of Directors concluded unanimously that combining with Air Canada and entering into the Arrangement Agreement are in the best interests of Transat and its stakeholders, including its employees, clients, shareholders, partners and suppliers, and has provided its unanimous recommendation to the Transat Board of Directors to that effect.

On June 27, 2019, the Transat Board of Directors, having among other considerations, received and considered the recommendation of the Special Committee, unanimously determined that the transaction is in the best interests of Transat and its stakeholders, approved the Arrangement Agreement and recommended that Transat shareholders vote in favour of the transaction. In addition, each of the directors and executive officers of Transat has entered into a voting support agreement pursuant to which each of them has committed to vote in favour of the transaction.

Each of National Bank Financial and BMO Capital Markets has provided the Transat Board of Directors with an opinion to the effect that, as of the date thereof, the consideration to be received by holders of Transat shares with respect to the transaction was fair, from a financial point of view, to such holders, in each case subject to the respective limitations, qualifications, assumptions and other matters set forth in such opinions.

The terms of the Arrangement Agreement provide for a break fee of $15 million payable by Transat in case of termination of the agreement in certain circumstances, including upon acceptance of a Superior Proposal that is not matched by Air Canada. Under the Arrangement Agreement, a Superior Proposal is defined, in part, as an unsolicited bona fide written acquisition proposal, that is made at a firm price per share equal to or exceeding $14 in cash, that has fully committed financing from a financial institution or similar organization (or is made by a person with adequate cash on hand), and that the Board of Directors of Transat determines in its good faith judgment, after receiving legal and financial advice, would result in a transaction that would be in the best interests of Transat and its stakeholders and be more favourable, from a financial point of view, to Transat shareholders. The terms and conditions for the making of a Superior Proposal and its complete definition are contained in the Arrangement Agreement.

The Arrangement Agreement also provides for the payment by Air Canada of a reverse break fee of a maximum of $40 million in the event that the agreement is terminated because regulatory or governmental approvals are not obtained, subject to certain conditions.

Further details regarding the terms of the transaction are set out in the Arrangement Agreement. The acquisition will proceed by way of a court-approved plan of arrangement pursuant to the Canada Business Corporations Act. Additional information regarding the terms of the Arrangement Agreement and the background of the transaction will be provided in the information circular for the special meeting of Transat shareholders. Copies of both the Arrangement Agreement and the information circular will be made available on SEDAR at www.sedar.com.

Air Canada has retained Morgan Stanley as its financial advisor and Stikeman Elliott LLP as its legal advisor. Transat has retained National Bank Financial as financial advisor and Fasken as legal advisor. BMO Capital Markets and Norton Rose Fulbright are acting respectively as financial and legal advisors to the Special Committee of Transat’s Board of Directors.

Air Canada Head Office in Montreal.

Headquartered in Montreal since 1949, Air Canada maintains one of the largest global head offices in Quebec and has been named one of Montreal’s top employers in each of the last six years. Air Canada employs 36,000 employees globally, with approximately 10,000 in the province of Quebec where it has created over 2,600 new jobs over the last five years. Air Canada’s President and Chief Executive Officer and other Executive Committee members are all based at the Montreal Headquarters.

Air Canada serves 11 airports across Quebec. Montreal-Trudeau Airport is a strategic hub for Air Canada connecting its Quebec and Atlantic Canada domestic network, with its U.S. trans-border, Caribbean, European, North African, Asian and South American flights. To the U.S. alone, Air Canada connects Montreal-Trudeau to some 24 cities.

Since 2012, Air Canada has launched 35 new routes from Montreal-Trudeau to global markets including Shanghai, Beijing, Tokyo, Tel Aviv, Lima, Sao Paulo, and Casablanca. This growth has allowed Montreal to rank amongst the top 50 most internationally connected cities in the world and to become one of the largest North American hubs.

Air Canada served more than 10 million passengers in Montreal in 2018.

Top Copyright Photo (all others by the airline): Air Transat Airbus A321-211 WL C-GTXV (msn 6526) YYZ (TMK Photography). Image: 946807.

Air Transit aircraft slide show:

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Air Transat announces its winter schedule including New Orleans

Air Transat Airbus A321-211 C-GEZN (msn 4103) YUL (Gilbert Hechema). Image: 946579.

Air Transat has announced the new features of its flight program for winter 2019–2020, effective November 1, and is continuing to develop its service to the Caribbean, Mexico, Central and South America, Florida and Louisiana, offering over 30 Sun destinations as well as several European regions. In addition, the carrier will add new Airbus A321neoLR aircraft to its operations this winter.

Even more new routes and destinations

This winter, the airline will introduce new destinations and routes out of several regions of the country. Air Transat will now be the only airline to offer a direct flight from Montreal to New Orleans, Louisiana, with two direct flights per week beginning in November.

In the West, Air Transat will refocus a significant portion of its operations on Vancouver, becoming the only carrier to serve Fort Lauderdale/Hollywood, Florida (two direct flights a week). In addition, the airline will offer new flights to San José and Liberia, Costa Rica (two flights a week), and reintroduce a direct flight to Punta Cana, Dominican Republic.

In Ontario, the carrier will increase its presence, including a new direct flight to Puerto Plata, Dominican Republic, from London. A new direct flight to Santa Clara, Cuba, from Hamilton will also be added, as well as an additional direct flight to Punta Cana, Dominican Republic, for a total of two direct flights a week.

More flights to Florida and sustained frequency to the Dominican Republic and Mexico

Air Transat will be investing in Florida, with a focus on Fort Lauderdale/Hollywood. Daily direct flights will now be offered from Montreal during peak season as well as an increased frequency from Quebec City (five direct flights a week).

Air Transat will enhance its program with an additional direct flight to Puerto Plata out of Montreal (five direct flights weekly). Punta Cana will also benefit from an additional direct flight out of Hamilton (two direct flights a week), in addition to existing daily direct flights out of Montreal and Toronto.

To Mexico, Air Transat will be offering an additional direct flight to Puerto Vallarta out of Calgary, for a total of four direct flights a week, in addition to its daily direct flights to Cancun/Riviera Maya from Montreal and Toronto.

Winter in Europe

Beginning in winter 2019–2020, Air Transat will fly year-round to Madrid and Malaga, Spain, out of Montreal (two direct flights a week, respectively) as well as out of Toronto and Vancouver through connecting flights in addition to its daily direct flight from Montreal to Paris, France.

Out of Toronto, the airline will offer its two weekly direct flights to Glasgow and Manchester, United Kingdom, year-round and will extend the flight season until mid-January for Barcelona, Spain (two flights a week), and Rome, Italy (two direct flights a week), in addition to offering daily flights to London, United Kingdom.

Domestic and connecting flights for more options

Air Transat’s domestic flights program, which connects several of Canada’s major cities, will offer a wider choice of transatlantic destinations through connecting flights and will also give Canadians a chance to discover their own vast country. The carrier will continue its daily flights between Montreal and Toronto, in addition to its seven direct flights a week between Vancouver and Toronto and its three weekly direct flights between Montreal and Vancouver.

Top Copyright Photo (all others by the airline): Air Transat Airbus A321-211 C-GEZN (msn 4103) YUL (Gilbert Hechema). Image: 946579.

Air Transat aircraft slide show:

Transat A.T. acknowledges Group Mach Inc.’s efforts to privatize Transat

Transat A.I. Inc. issued this statement:

Transat A.T. Inc. confirms that it has taken note of the press release issued earlier by Group Mach Inc. regarding its expressed interest to privatize Transat.

Transat would like to reiterate that it has entered into an agreement with Air Canada, pursuant to which it has agreed to a 30-day binding period of exclusive negotiations, beginning upon the commencement of a formal due diligence review. During this exclusivity period it is contemplated that Air Canada will complete its due diligence review and the parties will finalize the negotiation of a definitive agreement regarding the acquisition of all of the shares of Transat. This exclusivity period expires towards the end of June 2019 .

Transat does not intend to provide further updates or comments with respect to the foregoing except as required by law.

There is no assurance that a definitive agreement will be reached in relation to any proposed transaction.

The operations of Transat continue in their normal course and there will be no change for its clients, suppliers and employees. In particular, travellers and clients of Transat can continue to travel and book their flights and vacation packages with Transat as usual.

An update by Air Canada on the Transat AT acquisition

Air Transat Airbus A321-211 C-FTXW (msn 1921) YYZ (TMK Photography). Image: 946081.

Air Canada issued this update statement on the Air Transit acquisition:

Air Canada on June 4 said that it is in the process of finalizing its binding agreement to purchase all of the issued and outstanding shares of Transat AT Inc. and its combination with Air Canada to create an industry leading, Quebec-based leader in the global leisure travel industry. Air Canada announced on May 16, 2019 that it had entered into an exclusive agreement with Transat regarding the proposed transaction and that the agreement was subject to Air Canada completing a 30-day due diligence period now expected to be complete towards the end of June.

Air Canada’s acquisition will result in job creation and economic growth in Quebec, given the travel and tourism opportunities. Moreover, Air Canada has all necessary funding to complete the transaction and therefore it is not subject to financing conditions and does not require government or taxpayer assistance.

The transaction, valued at $520 million, remains subject to the finalization of definitive agreements, confirmatory due diligence, regulatory and shareholder approvals and other closing conditions usual in this type of transaction. There is no assurance that the transaction will be completed as described in this news release or at all.

Air Canada serves 11 airports across Quebec. The international reach of Air Canada’s network makes Quebec a gateway to the world and is an important tool for economic development, including tourism.

Montréal-Trudeau Airport is a strategic hub for Air Canada connecting its Quebec and Atlantic Canada domestic network, with its U.S. transborder, Caribbean, European, North African, Asian and South American flights. To the U.S. alone, Air Canada connects Montreal-Trudeau to some 24 cities.

Since 2012, Air Canada has launched 35 new routes from Montréal-Trudeau to global markets including Shanghai, Beijing, Tokyo, Tel Aviv, Lima, Sao Paulo, and Casablanca. This growth has allowed Montreal to rank amongst the top 50 most internationally connected cities in the world and to become one of the largest North American hubs.

Air Canada served more than 10 million passengers in Montreal in 2018.

Top Copyright Photo: Air Transat Airbus A321-211 C-FTXW (msn 1921) YYZ (TMK Photography). Image: 946081.

Air Transat aircraft slide show:

 

Transat AT gives Air Canada 30 days of exclusive negotiations to acquire Air Transat

First Airbus A321neo, delivered as C-GOIE on May 3, 2019

Transat AT Inc. has made this announcement:

Transat AT Inc. has announced that it has agreed to a 30-day period of exclusive negotiations with Air Canada pursuant to a letter of intent contemplating a transaction by which Air Canada would acquire all of the shares of Transat at a price of $13.00 per share.

During such exclusivity period, it is contemplated that Air Canada will complete its due diligence review and the parties will finalize the negotiation of a definitive agreement regarding this transaction, the material terms of which are announced today.

“This announcement is good news for Transat”, said Jean-Marc Eustache, President and Chief Executive Officer of Transat. “This is an opportunity to team up with a great company that knows and understands our industry and has had undisputable success in the travel business. This represents the best prospect for not only maintaining, but growing over the long term the business and jobs that Transat has been developing in Quebec and elsewhere for more than 30 years.”

Transat would like to point out that its operations continue in the normal course and that there will be no change for its clients, suppliers and employees. In particular, travellers and clients of Transat can continue to travel and book their vacation packages with Transat like before.

Context of the Announcement

The Board of Directors of Transat has agreed to the exclusivity agreement based on a unanimous recommendation from a special committee of independent directors that was charged with examining any proposals for the acquisition of the shares of Transat, with the assistance of financial and legal advisors, and with considering all strategic options, as was announced on April 30, 2019. After being solicited by several parties and having considered available alternatives, the Board of Directors has determined that it is now in the interests of Transat and its stakeholders to finalize negotiations on an exclusive basis with Air Canada with a view to completing the transaction. In its recommendation, the special committee considered many factors, including the interests of the Corporation and its stakeholders, the economic and regulatory environment in which Transat operates, the proposed price of $13.00 per share, which represents a premium of 148.5% over the 20-day weighted average trading price prior to the announcement of April 30, 2019, a premium of 47.8% over the 20-day weighted average trading price for the period ended May 15, 2019, the terms of Air Canada’s proposal, which it deemed reasonable and acceptable taken as a whole, including the duration of the exclusivity period, the disclosure of the main terms of the letter of intent, the covenants of Air Canada and the contemplated terms of the definitive agreements.

Additional Terms of the Letter of Intent

The letter of intent sets forth certain terms that will be required in the definitive agreement. These terms include a break fee of $15 million payable by Transat in case of termination of the transaction, including upon acceptance of an unsolicited superior proposal, and a reverse break fee of a maximum of $40 million payable by Air Canada in the event that the agreement is terminated because regulatory or governmental approvals are not obtained. In addition, the non-solicitation provision will be subject to the usual withdrawal right based on fiduciary duties if an unsolicited proposal is made at a firm price per share that is at least $1.00 higher than the price offered by Air Canada, in the event such proposal is not matched by Air Canada. Moreover, the execution of a definitive agreement by Air Canada will be subject to the execution of support and voting agreements by certain large shareholders of Transat.

Finally, Transat has agreed to limit its undertakings and expenses relating to the implementation of its hotel strategy during the exclusivity period.

Any agreement will also contain numerous conditions customary for this type of transaction, including applicable regulatory approvals and the approval of the shareholders of Transat.

There is no assurance that a definitive agreement will be reached in relation to any transaction following the exclusivity period and the ongoing discussions. No assurance may be given that a transaction will occur in relation to the proposed transaction or otherwise, or regarding the definitive terms of such transaction, if any.

Top Copyright Photo: Air Transat’s first Airbus A321neo. Air Transat Airbus A321-271NX WL D-AZAJ (C-GOIE) (msn 8755) XFW (Gerd Beilfuss). Image: 946420.

Air Transat aircraft slide show:

Air Transat to add nonstop flights from Montreal to New Orleans

Air Transat has announced that it will add New Orleans, Louisiana, to its portfolio of fall and winter destinations. Beginning in November 2019, the airline will offer two nonstop flights a week from Montreal, giving travelers a chance to experience the festive atmosphere of jazz clubs or a contemplative stroll along the Bayou.

Air Transat will fly twice a week to New Orleans, on Thursdays and Sundays, beginning November 3, 2019. Details of Air Transat’s 2019 winter flight program will be announced shortly.

No aircraft type was specified.

All images by the airline.

Airbus delivers the first A321LR to Canada’s Air Transat

First Airbus A321neo, delivered as C-GOIE on May 3, 2019

Air Transat, a Canadian leisure and holiday travel airline, took delivery of its first Airbus A321LR aircraft. The A321LR is one of 15 the Montreal-based carrier is scheduled to receive. Air Transat leases the A321LR from AerCap.

The A321LR, with its unique Airbus Cabin Flex configuration allowing for installation of additional fuel tanks, will have a range of up to 4,000 nautical miles. Air Transat plans to use the A321LR for long-distance flights out of Canada, principally on more extended, thinner routes to European, Caribbean, Central and South American destinations. The A321LRs will replace older planes with an ultra-modern, highly cost-efficient aircraft equipped with state-of-the-art interior amenities for an enhanced and enjoyable passenger experience.

The Air Transat A321LR is configured for 199 seats in two classes, including 12 premium Club Class seats in an exclusive cabin with personalized service and ergonomic seating. Economy Class seats are wider, provide more personal space and are equipped with a state-of-the-art entertainment system.

The A321LRs are part of a larger leasing deal Air Transat has with AerCap to convert to an all-Airbus fleet by 2022 as it phases out older widebody and narrowbody planes.

Air Transat is Canada’s number one holiday airline. It flies to some 60 destinations in more than 25 countries in the Americas and Europe, offers domestic and feeder flights within Canada, and carries some 5 million passengers every year. Based in Montreal, the company employs 3,000 people. Air Transat is a business unit of Transat A.T. Inc., a leading integrated international tourism company specializing in holiday travel and offering vacation packages, hotel stays and air travel.

Top Copyright Photo (others by Airbus): Air Transat Airbus A321-271NX WL D-AZAJ (C-GOIE) (msn 8755) XFW (Gerd Beilfuss). Image: 946420.

Air Transit aircraft slide show: