New York (AirGuideBusiness - Airline Finance News North America) May 6, 2012
Air Canada Air Canada Receives Conditional Exemption from Applicable Take-Over Bid and Related Early Warning Reporting Requirements. Air Canada (TSX: AC.B AC.A) announced today that it has received a conditional exemption which would effectively treat Air Canada's Class A variable voting and Class B voting shares as a single class for the purposes of applicable take-over bid requirements and early warning reporting requirements contained under Canadian securities laws. The exemption, however, will become effective immediately (but only) upon shareholder approval of proposed related amendments to Air Canada's shareholder rights plan agreement, which Air Canada will seek at its annual and special meeting of Air Canada shareholders to be held on June 4, 2012. Additional details of the exemption and the proposed amendments to Air Canada's shareholder rights plan agreement are provided below. Exemption from Applicable Take-Over Bid Requirements and Proposed Amendments to Air Canada's Shareholder Rights Plan On May 4, 2012, pursuant to an application by Air Canada, the Autorit des marchs financiers, as principal regulator, the Ontario Securities Commission and the securities regulatory authorities in the other provinces of Canada granted exemptive relief (the "Decision") from (i) applicable formal take-over bid requirements, as contained under Canadian securities laws, such that those requirements would only apply to an offer to acquire 20% or more of the outstanding Class A variable voting shares and Class B voting shares of Air Canada on a combined basis, and (ii) applicable early warning reporting requirements, as contained under Canadian securities laws, such that those requirements would only apply to an acquirer who acquires or holds beneficial ownership of, or control or direction over 10% or more of the outstanding Class A variable voting shares and Class B voting shares of Air Canada on a combined basis (or 5% in the case of acquisitions during a take-over bid). A copy of the Decision is available on SEDAR at www.sedar.com. The Decision, however, will become effective immediately (but only) upon shareholder approval of the proposed amendments to the shareholder rights plan agreement (the "Rights Plan") dated as of March 30, 2011 between Air Canada and CIBC Mellon Trust Company described in the management proxy circular. The proposed amendments are subject to approval by a majority of the holders of Class A variable voting shares and Class B voting shares of Air Canada (voting together as a single class), voting in person or by proxy at Air Canada's June 4, 2012 meeting. Subject to certain exceptions identified in the Rights Plan, the Rights Plan currently would be triggered in the event of an offer to acquire 20% or more (on a per class basis) of the outstanding Class A variable voting shares or Class B voting shares. The proposed amendments would modify the Rights Plan to be consistent with the Decision so that it would only be triggered by an offer to acquire 20% or more of the outstanding Class A variable voting shares and Class B voting shares of Air Canada on a combined basis. A copy of the management proxy circular is available on Air Canada's website at aircanada.com or on SEDAR at www.sedar.com. Objective of the Decision While having increased its public float significantly over recent years, and having a flexible capital structure that is designed to permit non-Canadian (as defined under the Canada Transportation Act) investors to become shareholders of Air Canada, the relatively small number of outstanding Class A variable voting shares (the share class for non-Canadians) may limit the ability of non-Canadians to acquire shares of Air Canada. In an effort to facilitate the acquisition of Class A variable voting shares, Air Canada applied to the Autorit des marchs financiers, as principal regulator, and the Ontario Securities Commission in order to seek the Decision. Though applicable take-over bid rules and early warning requirements apply to the acquisition of securities of a class, it was acknowledged in the Decision that aggregating Class A variable voting shares and Class B voting shares for the purpose of the take-over bid rules and early warning requirements may facilitate the acquisition of Class A variable voting shares. Because of the relatively small public float of Class A variable voting shares (compared to the public float of Class B voting shares), absent the Decision, it may be more difficult for non-Canadians to acquire shares in the ordinary course without the apprehension of inadvertently triggering the take-over bid rules or early warning requirements. The Decision considered the fact that the Class A variable voting shares and Class B voting shares have identical terms except for the foreign ownership voting limitations applicable in the case of the Class A variable voting shares. The Decision also takes into account the fact that Air Canada's dual class shareholding structure was implemented solely to ensure compliance with the requirements of the Air Canada Public Participation Act and the Canada Transportation Act. An investor does not control or choose which class of Air Canada shares it acquires and holds. The class of shares ultimately available to an investor is only a function of the investor's status as a Canadian (holders of Class B voting shares) or non-Canadian (holders of Class A variable voting shares). Shareholders of Air Canada will be asked at the meeting to consider and, if thought advisable, adopt a resolution approving the proposed amendments to the Rights Plan. The Rights Plan, approved at Air Canada's 2011 annual and special shareholders meeting, is designed to provide the Air Canada's shareholders and the Board of Directors additional time to assess an unsolicited take-over bid for the company and, where appropriate, to give the Board of Directors additional time to pursue alternatives for maximizing shareholder value. It also encourages fair treatment of all shareholders by providing them with an equal opportunity to participate in a take-over bid. May 4, 2012
Air Canada Government appoints arbitrators for Air Canada, union dispute. The Canadian government has appointed arbitrators for Air Canada and two unions. The pilots and machinists unions at Air Canada have organized wildcat strikes that have hurt operations. Lisa Raitt, the country's labor minister, urged the two sides to come to an agreement on labor contracts through the arbitration. May 3, 2012
Air Canada Catch the moving target of airfare pricing. When you're shopping for an airline ticket, it can seem like you are aiming at a moving target. You see an ad for prices that start at a certain fare, but you can't seem to get your ticket to go that low. It's not your imagination: The target is moving. The rules today allow an airline to change the fares on a flight up to once an hour, says Alexandra Arguelles, director of product management for Amadeus North America in Miami, which builds the technology that operates many of the airlines' and travel sites' booking systems. Fares are in so-called buckets, which are dictated by the airlines' revenue management software, she says. If you are flying on a week trip between San Francisco and Boston, for example, you could pay anything from $289 to $824 roundtrip if you travel anytime over the next four months, according to an analysis for Reuters by the suburban Los Angeles-based airfare shopping site CheapAir.com. That $289 fare is only available on five of the possible 120 departures days. On one Delta Air Lines route between New York and Miami there were 17 different economy class fares, ranging from $109 to $733 one way, the analysis found. Between Denver to Las Vegas, United Airlines had available 18 different economy class fares, ranging from $63 to $1,165 one way. "It's like playing the stock market buying an airline ticket," said CheapAir CEO Jeff Klee. There's no way to pinpoint it. There's no one who can tell the best strategy or the best date to buy. It changes so frequently." On average, the cheapest fare for a flight will be sold about six weeks before departure, according to a study by the Airlines Reporting Commission, which processes transactions for the travel industry. "If you know far in advance you're going to take a trip, check the fares every week, or more often. Wait for the prices to drop," Klee said. "At that point, it's important that you pounce on it when you see a good deal." Because only so many fares are available in each price category, he points out that buying, say, four seats at a time, could result in a higher fare since the system will default to the lowest price that has four available slots. So, you could get two or three of the seats at a lower fare, but only if you booked them one or two at a time - risking not buying enough tickets to get everyone on the flight. In those situations, you might want to use a traditional travel agent or the dial-in customer service line like the one offered by CheapAir, he suggests. As a general rule, Klee said Tuesday, Wednesday and Saturday will have lower fares than the other days of the week. And, he added, taking a weekend trip that departs on Saturday and returns on a Monday typically will be less than leaving on Friday and returning on Sunday. You can get an idea of what you ought to be paying on a given domestic route by checking the U.S. Department of Transportation Consumer Airfare Report. It comes out quarterly, and is several weeks behind, but has the average fare for thousands of segments, along with the average fares for each segment of the largest carrier in the market and the cheapest carrier. Maximum flexibility, says Montie Brewer, former CEO of Air Canada, will yield rewards for travelers. If you are not bound by specific dates or times of day, he says, you will be able to...