Post by : Meena Ariff

Media executive Pierre Karl Péladeau is pushing for substantial changes at Transat A.T. Inc., advocating for a sizable overhaul of its board and a strategic review to tackle the airline's ongoing challenges.

As the CEO of Quebecor Inc. and the second-largest shareholder in Transat, Péladeau proposes to reduce the current board from eleven to six members. He has put forth his nomination alongside pollster and economist Jean-Marc Léger and Quebecor vice-chair André Brosseau.

Péladeau characterized Transat’s financial standing as “broken” and urged for a detailed strategic review targeting senior management, stressing the need for the board to exhibit a commitment to enhancing value for both shareholders and stakeholders.

He has called for a special shareholder meeting by February 6 to vote on his initiatives. In response, Transat mentioned they are considering his requests, pointing out that several board members have already met with Péladeau to discuss potential adaptations, including shifts in board structure.

Péladeau's interest in Transat is longstanding. He previously attempted to purchase the airline in 2020 with a $5-per-share proposal, which fell short against Air Canada’s competing offer. That bid was ultimately abandoned after European regulators indicated disapproval. His investment firm, Financière Outremont Inc., presently holds 9.5% of Transat.

The Montreal-based airline continues to face numerous hurdles, such as stringent competition in the vacation travel sector, substantial debt, and pandemic-impacted operations. Earlier this year saw major debt restructuring that included forgiving sizeable amounts owed. Additionally, operational issues persist, highlighted by engine recalls affecting four aircraft and a potential pilots' strike led by the Air Line Pilots Association.

In spite of the ongoing difficulties, Transat’s stock witnessed a nearly four percent increase, reaching $2.28 on the Toronto Stock Exchange after Péladeau's announcement, suggesting investor positivity towards likely changes.

#Canada News #Air Transat plane