Transat AT is considering its options after a deal that would have seen Canada’s largest airline acquire its smaller travel rival officially died on Friday with word that Air Canada had come to a mutual agreement with Transat to terminate their planned merger.
Both companies released statements announcing the termination of the $190 million deal initiated more than two years ago and amended due to the weight of the COVID-19 pandemic on the transportation sector.
The end of the deal comes after the Air Canada and the tour company that operates Air Transat were advised by the European Commission that it would not approve the transaction.
Air Canada said it offered an enhanced package of remedies beyond what has traditionally been accepted by the commission in previous airline mergers.
“Following recent discussions with the EC, it has become evident, however, that the EC will not approve the acquisition based on the currently offered remedy package,” the company said in a statement.
“After careful consideration, Air Canada has concluded that providing additional, onerous remedies, which may still not secure an EC approval, would significantly compromise Air Canada’s ability to compete internationally, negatively impacting customers, other stakeholders and future prospects as it recovers and rebuilds from the impact of the COVID-19 pandemic.”
The European review was the final hurdle in the regulatory process after the Canadian government approved the transaction on Feb. 12 while imposing conditions.
Air Canada will pay Transat a $12.5-million termination fee, while Transat won’t be required to pay Air Canada anything if it enters into another deal in the future.
Montreal-based Transat said it is disappointed by the failure to complete the transaction but is confident of the company’s future.
“This transaction was complicated by the pandemic, and, ultimately, Air Canada reached its limit in terms of concessions it was willing to provide the European Commission to satisfy their competition law concerns,” stated Transat CEO Jean-Marc Eustache.
He said the deal would have resulted in benefits to shareholders, customers and other stakeholders.
No longer constrained by terms of the agreement, Eustache said the company he co-founded is free to take necessary steps to ensure its future, including obtaining at least $500 million in long-term financing.
The company will continue to preserve cash and has put in place a $250-million short-term subordinated credit facility, which matures on June 30.
Transat is in negotiations for long-term funding, including under the Large Employer Emergency Financing Facility, and through support from the Canadian government for businesses in the travel and tourism sector.
“Discussions on both topics are at an advanced stage and Transat’s management is confident that a satisfactory financing will be secured in the coming weeks,” it said.
Federal Transport Minister Omar Alghabra says he’s spoken with Transat and is examining next steps.
“The most important thing for our government is to protect jobs in Quebec and across Canada, as well as preserving the long-term viability of Transat A.T.,” he tweeted.
“Our government will continue to support Canadian workers and a strong competitive air transport sector.”
The government has come under fire by the country’s travel sector for failing to provide direct financial relief to airlines during a time when their operations have shrunk dramatically and losses have mounted.
A spokesman for Quebec Economy Minister Pierre Fitzgibbon also offered the government’s support.
“We will not leave Transat without support, we are continuing to monitor development very closely,” he wrote in an email.
Transat’s operations have been grounded since a suspension of flights following the Canadian government’s request in January to stop travel to Mexico and the Caribbean because of the pandemic.
Air Canada is resuming idled operations in May and Transat expects to do so in mid-June with a pick-up in volume to Europe.
Transat is not expecting the air travel market to return to 2019 levels until 2024, chief operating officer Annick Guerard recently said in a conference call.
Transat is now free to hold discussions with potential buyers, including Pierre Karl Peladeau, whose investment company, Gestion MTRHP Inc., previously made a proposal to acquire all of the issued and outstanding shares of Transat for $5 a share.
Like many tourism-related companies, Transat has been severely impacted by lockdowns during the pandemic.
“However, the arrival of vaccines brings us a light at the end of the tunnel, and Transat is well-positioned to bounce back,” Eustache said.
As a smaller operator, Transat said it can be “nimble and quickly adapt to ever-shifting market conditions.”
In addition, pent-up demand for leisure travel should help as this part of the business is expected to recover sooner than business travel, he said.
“In close to 40 years of existence, we have traversed numerous crises and each time, we emerged stronger than before, demonstrating our resilience as an organization. We look forward to a safe and healthy future, as we hopefully put this pandemic behind us.”
This report by The Canadian Press was first published April 2, 2021.
As COVID-19 vaccines for kids get closer, experts weigh up how to reassure parents – CBC.ca
As Pfizer Inc. and BioNTech say they’ve moved a step closer to providing their COVID-19 vaccine for younger children, one mother says she’s keen to have her eldest vaccinated, but hears some hesitation among other parents.
“As parents, you’re nervous and you’re apprehensive, obviously, about any risks,” said Fallon Jones, who lives in Halifax with a five-year-old daughter and two-year-old son.
“But we have to weigh the pros and the cons here, and I think that this is a good opportunity to protect them against a potentially deadly virus,” she told The Current’s Matt Galloway.
Pfizer-BioNTech said Monday that a clinical trial of its COVID-19 vaccine recorded a robust immune response in five- to 11-year-olds, and the company plans to seek regulatory approval as soon as possible. Children received two shots, each one-third the dose size given to adults. The findings have not been peer-reviewed, nor published.
For any vaccine to be approved by Health Canada, the manufacturers supply the necessary clinical trial data for review. If the regulator grants approval, the National Advisory Committee on Immunization (NACI) will make a recommendation on their use, but the final decision to deploy the vaccines rests with provincial authorities.
In a statement to The Current, Health Canada said the makers of all COVID-19 vaccines approved in Canada are conducting or planning studies in adolescents and younger children, but it has so far not received any submission for the approval of any COVID-19 vaccine for children under 12.
In her work at a vaccine hesitancy clinic in Calgary, Dr. Cora Constantinescu meets parents who are experiencing “a lot of fear and anxiety” around their children potentially getting the vaccine.
“We often have parents who are fully vaccinated themselves, who may be hesitant about their kids,” said Constantinescu, a pediatrician and infectious disease doctor at Alberta Children’s Hospital.
She said that parents talk to her about things they’ve seen online, including “anti-vaccine rhetoric and a lot of misconstrued science.”
In Halifax, Jones said she often hears other parents say they don’t know what’s in the vaccine, so they won’t give it to their kids. When she asks if they knew what was in the vaccines their kids received as babies, the response is usually no, she said.
“I completely respect and understand how there would be some fear associated with it,” she said.
But ultimately, “we trusted our doctors then and we trusted the science then, and we need to do the same with this vaccine.”
How should parents approach vaccine question?
Constantinescu said many parents have seen misinformation on social media, where there is a “huge polarization of the pro-vaccine and the anti-vaccine crowd.”
“The parents are caught in the middle, scared and worried about their kids, trying to make the best decision they can,” she said.
As parents approach the decision, they should consider the dual impact of COVID-19 on children, she said.
“We’re seeing the direct effects of COVID on children, and we know that that can range from mild disease, to respiratory illness, to being hospitalized, having a multi-system inflammation, to ending up in ICU,” she said.
There is also an indirect cost, including mental health issues and issues around socialization, she said.
The news from Pfizer-BioNTech gives her hope that those impacts can soon be addressed, but she warned that the data has not yet been made public, or reviewed by Health Canada.
If it is approved, she said parents should approach the vaccine as an issue of “personal protection first.”
“It’s about protecting their kids directly, looking out for them, and wanting to return them to a normal life,” she said.
‘Pull out all the stops’ to protect kids
Dr. Kashif Pirzada, an emergency physician in Toronto, wants to see a safe vaccine for kids approved and available as quickly as possible.
“I’m calling for all of these processes to be speeded up and done very transparently,” said Pirzada, who is also a co-founder of Masks4Canada, a group that advocates for public health measures to slow the spread of the virus.
He added that more work should be done to reassure parents that the vaccines are safe. He warned that COVID-19 is not harmless to children, and the longer they remain unprotected, the more infections there will be.
In the meantime, vaccination sites and health-care workers could be prepared to ramp the vaccination campaign back up, he said.
“Once that approval comes, we should pull out all the stops and get these shots into little arms as quickly as possible.”
Written by Padraig Moran. Produced by Rachel Levy-McLaughlin, Arianne Robinson and Joana Draghici.
Gold price drops as Powell talks 'gradual' tapering, downplays Evergrande contagion concerns – Kitco NEWS
(Kitco News) The gold market saw its earlier gains reversed as Federal Reserve Chair Jerome Powell talked about “gradual” tapering while downplaying China’s Evergrande contagion effect on the U.S. market.
On Wednesday, the Fed said it may soon start tapering its $120 billion in monthly asset purchases, with central bank officials showing growing support for raising interest rates in 2022.
“If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted. These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses,” the Fed said in a statement.
When clarifying the Fed’s stance at a press conference following the Fed statement, Powell indicated that it would be a “very gradual taper,” which could conclude in the middle of next year.
Powell also pointed out that the central bank has the freedom to speed up or slow down the tapering process as it sees fit. He added that markets should not expect a rate hike while the Fed is still tapering.
Tapering does depend on substantial further progress made by the U.S. economy. And if the economy continues to advance in line with expectations, the Fed could move ahead with tapering at the next meeting.
“For me, it wouldn’t take a knockout [August] employment report. It would take a reasonably good employment report for me to feel like that test is met,” Powell said. “I would say that in my own thinking, the test is all but met. I don’t personally need to see a very strong employment report. Again it’s not to be confused with the test for [rate] liftoff, which is so much higher.”
The Fed Chair was also asked about China’s Evergrande debt issue, which sparked a rout in the markets earlier this week.
“The Evergrande situation seems very particular to China, which has very high debt for an emerging economy,” Powell told reporters. “Corporate defaults in the U.S. are very low right now … You would worry that it would affect global financial conditions through confidence channels.”
When asked about the stock-trading policies for Fed officials, Powell replied that they are “not adequate” and the Fed “could do better.”
Powell noted that it is reasonable for Fed officials not to own the same assets as Fed buys. “We are going to be looking at all those things,” he said.
On the debt ceiling issue, Powell also urged Congress to raise the debt limit in a timely fashion. “It is critically important. Failure to do that is something that could result in severe damage to the economy and financial markets.”
He added that no one should assume Fed can protect the economy if the debt ceiling is not raised.
In response to Powell’s comments, gold saw some losses as markets interpreted Powell’s comments as upbeat when it came to the U.S. economy. At the time of writing, December Comex gold futures were trading at $1,767.20, down 0.62% on the day.
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