The biggest shareholder in Air Canada and Transat said on Tuesday that AC's revised offer for the Canadian tour operator was "a very reasonable one," given the turmoil in the aviation industry. Peter Letko, a co-founder of investment manager Letko Brosseau, called the deal “good news” but said the firm would wait to see if a rival bidder emerged before committing to the Air Canada offer. On Saturday, Air Canada cut the deal value to buy Transat by nearly 75% to about C$188.7m, down from C$720m, as COVID-19 weighs on travel demand. Transat shares rose as much as 30% as Air Canada’s revised offer raised optimism the deal, once shaken by the COVID-19 pandemic, could be completed. With the pandemic grounding flights globally, Air Canada had faced shareholder pressure to renegotiate the deal, which is still pending approval from European and Canadian regulators. “The price is a long way from what we agreed ... but it’s clear that the industry has gone through a period where it’s really suffered,” Letko said. “If nothing transpires, I think the Air Canada offer is a very reasonable one.” Letko Brosseau owns an 8.69% stake in Air Canada and almost 15% of Transat, according to Refinitiv data. As part of the revised deal, the purchase price could be paid to Transat shareholders in cash or shares of Air Canada, which Letko called interesting.<br/>
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A restructuring plan for TAP will be sent to the European Commission in November, the secretary of state for the treasury said Tuesday, which if approved will buy the airline time to repay a huge bailout loan. TAP asked for state aid in April after the outbreak of the coronavirus forced it to suspend almost all of its 2,500 weekly flights. The EC approved a E1.2b rescue loan in June, contingent on the airline drawing up a restructuring plan within six months, or by the middle of December. If Brussels accepts the plan, TAP will have several years to repay the debt, otherwise it must be repaid immediately. In its 2021 draft budget, Portugal included a state guarantee for a new loan of E500m to be granted to the company this year. “The restructuring plan is being drawn up, the expectation is that it...could be presented (to Brussels) during November,” Secretary of State for the Treasury Miguel Cruz said. “Projections have been revised to significantly lower values, as with all airlines in the world,” Cruz said, blaming the high uncertainty caused by the pandemic with some forecasts not expecting the travel sector to recover until 2024-25. The Portuguese government signed an agreement at the beginning of July to purchase shares from TAP’s private shareholders, increasing its stake to 72.5% from 50% but avoiding a full nationalisation.<br/>
Lufthansa is to shift a batch of Airbus A350-900s to Frankfurt, where they will take over routes operated by Boeing 747-8s. Lufthansa has so far focused A350 deployment exclusively on its Munich hub. The airline has 43 of the twinjets on order and has received 16 of them. Four are currently in storage, according to Cirium fleets data. Lufthansa plans to use only seven A350s on Munich services over the winter season, flying them to destinations in North America and Asia. Four of the dormant aircraft will be transferred to Frankfurt to operate services to Chicago and Los Angeles for the winter. The airline says they will be “temporarily replacing” the 747s. Lufthansa will also use A350s instead of A340-300s on routes from Frankfurt to Tokyo Haneda from December. All the flights, it adds, will be operated by pilots and cabin crew normally based in Munich. Lufthansa states that the A350 burns 12% less fuel than the 747-8. “By operating the A350 in Frankfurt, the fleet will be optimally used in an efficient and sustainable way,” it adds.<br/>