Air Canada and Transat AT, Air Transat’s parent company, have renegotiated the terms of their planned merger, price per share
This decision was prompted by the devastating impact of the coronavirus on the airline industry
The two Montreal-based carriers declared on October 10 that Air Canada will now acquire all of the Transat shares for CAN $ 5 ($ 3 81) per share, payable at the option of Transat shareholders in cash or in shares of Air Canada has a fixed exchange ratio of 02,862 Air Canada shares for each Transat share, valuing the transaction at C $ 190 million
This figure is lower than Air Canada’s initial offer, approved by Transat shareholders over a year ago, of C $ 720 million, or C $ 18 per share, to acquire the specialist vacation
Initially, the merger was due to end in the second quarter of 2020, but the global pandemic as well as competition concerns from regulators in Canada and Europe have repeatedly pushed that date back
« The amended transaction reflects the unprecedented impact of Covid-19 on the global airline industry, which has suffered a sharp decline in air travel since the conclusion and approval of the initial deal between Air Canada and Transat by Transat shareholders in August 2019, ”says Air Canada
The new conditions are subject to the approval of Transat shareholders as well as that of competition watchdogs, and are now expected to be closed in January or February 2021, the airline says
« Covid-19 has had a devastating effect on the global airline industry, with a significant impact on the value of airlines and aviation assets Nonetheless, Air Canada intends to complete its acquisition of Transat, at a reduced price and modified conditions, ”said Air Canada CEO Calin Rovinescu
« This combination will ensure the stability of the operations of Transat and its stakeholders and position Air Canada, and even the Canadian aviation industry, to emerge more strongly as we enter the post-Covid-19 world. », He adds
Last month, Transat CEO Jean-Marc Eustache said the company was still « firmly committed » to the deal with Air Canada, although « certain factors are beyond its control and related to the Covid-19 pandemic can influence the outcome of the crisis proposed arrangement «
At the time, he expressed a certain degree of exasperation at the long and drawn-out process around regulatory approvals for the merger on both sides of the Atlantic The transaction continues to be under close scrutiny by the European Commission and the Canadian Competition Bureau
According to unconfirmed reports in French-language media in Canada in June, Air Canada was looking for a way to terminate the deal due to liquidity issues due to the massive drop in demand due to the global health crisis
Rovinescu has been outspoken in his repeated criticism of the Government of Canada’s strict travel restrictions and quarantine requirements for inbound passengers, which has severely hampered the recovery of the airline industry
In March, Canada banned all non-nationals from entering the country, with a few exceptions All travelers arriving in Canada by land, sea or air, including citizens, must submit to a mandatory 14-day quarantine Those who violate the restrictions may face a fine of CAN $ 750,000, six months in prison and deportation from the country
Even those traveling within the country and between provinces may be subject to requirements that may include self-isolation
The longest peaceful border in the world, between Canada and the United States, has effectively been sealed since March 21 This closure has also been extended several times, and there is no indication when the border will reopen
Transat AT of Canada, the parent company of leisure carrier Air Transat, recorded revenues of just C $ 95 million ($ 7 2 million) in its third fiscal quarter During this period, it did had only one week of operations due to business disruptions due to the coronavirus pandemic
Air Canada CEO Calin Rovinescu has excoriated the Government of Canada for maintaining draconian travel restrictions caused by the coronavirus across the country, hampering the airline industry’s ability to return to a semblance of normal operations
Transat AT, parent company of Canadian vacation specialist Air Transat, says its merger with former airline Air Canada is still on track and is now expected to close in the fourth quarter of 2020
The Scandinavian low-cost carrier Norwegian has opened an official consultation on staff cuts at its London Gatwick base as the lasting impact of the global pandemic on air transport continues The consultation mainly concerns short pilots couriers and cabin crew at the Norwegian base at Gatwick and potentially cover 259 roles on
Our regular review of the latest global data for several key airline market indicators including traffic and capacity in passenger and freight markets, airport passenger throughput, in-service and stored fleets, jet fuel costs and stock price trends around the world the largest groups
Parent company Allegiant Air burned an average of $ 1 per day3 million of cash in the third quarter, including debt payments, up from its average daily consumption of $ 900,000 in the second quarter
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SOURCE: https://www.w24news.com
