Transat A.T. Inc.

Hello, everyone. Welcome to the Transat conference call for the presentation of the financial results of the third quarter ended July 31, 2020.

I'm here with Jean-Marc Eustache, President and CEO; Annick Guerard, COO; and Denis Petrin, our CFO. Jean-Marc will provide his comments and operations on the current situation followed by Annick, who will focus on our operational and commercial plans for the future before Denis reviews the financial results in more details.

We will then answer questions from financial analysts. Questions from journalists will be handled offline.

The conference call will be held in English but questions may be asked in French or English. As usual, our investors’ presentation has been updated and is posted on our website in the investors section.

Denis may refer to it as he presents the results. Today's call contains forward-looking statements.

There are risks that actual results will differ materially from those contemplated by these forward-looking statements. For additional information on such risks, we invite you to consult our filings with the Canadian Securities Commission.

The call also contains forward-looking statements concerning a transaction involving acquisition of older shares of operation by Air Canada. These statements are based on certain assumptions deemed reasonable by the Corporation, but are subject to certain risks and uncertainties, several of which are outside the control of the Corporation, which may cause actual results to vary materially.

In particular, the completion of the transaction with Air Canada will be subjected to customary closing conditions, including regulatory approvals, particularly authorities in Canada and the European Union. These approval processes are ongoing and the details of the transaction with Air Canada will be discussed in a few minutes.

Forward-looking statements represent Transat’s expectations as at September the 10th 2020 and accordingly are subject to change after such date. However, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.

Finally, we may refer to IFRS and non-IFRS financial measures. In addition to IFRS financial measures, we are using non-IFRS measures to assess the Corporation's operational performance.

It is likely that the non-IFRS financial measures used by the Corporation will not be comparable to similar measures reported by other issuers of those used by financial analysts, as their measures may have different definitions. The measures used by the Corporation are intended to provide additional information and should not be considered in isolation or as a substitute for IFRS financial performance measures.

Additional information on non-IFRS financial measures, such as their definition and their reconciliation with the more comparable IFRS measures are available in our annual report. With that, let me turn the call over to Jean-Marc for his opening remarks.

Thank you, Christophe. Good day everyone.

This is our second quarter into the COVID crisis. It is now very clear that its effects are going to be long lasting ones.

We had put our operations on pause on April 1st and restarted on a very limited basis only on July 23rd, which means that the quarter includes nine days of operations at extremely reduced capacity. So, we're looking at revenues of $9.5 million, down 99% from last year.

We had said that we expected to reverse a significant amount of the unrealized losses generated by the price of oil and the value of the Canadian dollar on the last day of the second quarter. And that has actually happened, limiting our net loss attributable to shareholders to $45 million when our net adjusted loss is $140 million.

Those are appealing numbers, but they do not come as a surprise. When IATA estimates that the industry will lose US$419 billion in global revenue this year, we’re just as every other airline or travel company in the world.

Our restart in July allows us to be back in the game and be ready to answer the demand when it will ramp up again significantly. Now, it remains so low, and we do not expect any significant upturn before the restrictions of the Canadian borders are lifted.

We will continue to monitor and adjust on a day-to-day basis as we move into the fall and winter. What really matters for now is our liquidity and we have continued to implement the drastic measures that we have detailed in the last quarter.

We are having continued negotiations with our lessors to defer aircraft rent and return certain planes. We are accelerating the realignment of our fleet around the Airbus 321neo long-range.

We are of course discussing with all our other suppliers as well. We have granted our customers future travel credits who canceled due to this exceptional situation that we have now made transferrable and that is without limitation in time.

Two-third of our Canadian staff is still on temporary layoff, down from 85% when our operations were halted. Our approach is to use the Canada Emergency Wage Subsidy to delay any possible avoid permanent redundancies, as much as we can, but we currently expect that we might eventually have to terminate the employment of at least 2,000 employees or 40% of our staff, if the situation does not improve rapidly.

We're also maintaining the 10% to 20% voluntary pay cut for the Board and the management. On the financing side, we have drawn down our $50 million revolving credit facility agreement.

And our discussions for additional financing are at an advanced stage, bearing in mind that its implementation may require Air Canada's consent. All-in-all, cash and cash equivalent amounted to $576 million on July 31st.

About the transaction, we’re still awaiting regulatory approvals. On the European side, the commission is now satisfied with information received and has handed the deadline suspension on August 19th.

The provisional deadline is now set at December 11, 2020. In Canada, the decision may come at any time.

Consequently, we have expanded the upside date to September 27 and intend to use the provisions of the arrangement agreement to expand it further as necessary. So, we are moving on through the current difficulties and getting ready for better days when we think we have numerous assets to recover.

I will however like to underline that this situation is especially difficult in Canada. Restrictions at the border are particularly stringent with the closure for -- to foreigners and mandatory quarantines for Canadians coming back from any other country in effect until at least September 3.

The user-pays principle is putting an enormous pressure on the system when there are so precious few users, leading in turn to unbearable consequences for the airlines, like the 30% increase in Air Canada charges when the overall infrastructure costs for them were already amongst the highest in the world. There's no specific sectorl support for the industry, contrary to what happened in many countries in the world where it is estimated that about US$120 billion to US$130 billion in aids are being handed out to airlines.

While we are very supportive of the objective of putting public health first, we think that they could be, they could be, there could be a different approach to it. A recent study, for instance, showed that countries that airport testing may be more efficient than quarantine, in reducing infection rates.

Borders could be also reopened on a reciprocity basis. We are very grateful for overall program like CEWS, which has done a lot of support to support our employees or lease, which may have help long-term financing.

But, we see that our foreign competitors are receiving tremendous -- tremendous sector-specific support from their government, and that in the current circumstances, the playing field might not be level when demand comes back. With this, I will now turn the discussion over to Annick and Denis to talk more about our operation, result and plans.

Annick, please?

Thank you, Jean-Marc. On the operational front for this summer, we are currently operating 17 destinations on a weekly basis, to Europe, to the South and on the domestic market.

Without surprise, we are not dealing with record performance results. For July, our load factor was at 58% and for August, we completed the month at 53%.

When we look at the IATA figures for July, the overall load factors was at 46% for international traffic with only 34% out of North America. So, despite very-low results, our load factors still show better than the industry, which at least means that we have some traction on demand.

We are currently operating a very light program as we know with six Airbus A321neo long-range, and we are carefully every day adjusting the capacity on an ongoing basis to optimize our results. Our operation, even if it's minimal, gives us and understanding of demand, not only from a quantitative perspective, but also from a qualitative one.

And this allows us to adapt our operation and commercial approach to the new environment. So, when we analyze bookings today, we see that the trend has shifted of course towards more of a last-minute pattern.

On the average, we also are looking more at a younger traveler, with the main purpose of the trip being to visit friends and families. We are very pleased with the introduction of our customer care travel program, featuring enhanced health and safety measures throughout the customer journey.

So far, we have received extremely positive feedback on this program from our customers. And we've not had an issue with customer complaints, especially when it comes to wearing the mask on board.

When we look at the upcoming winter season, with a lack of clear visibility on future demand, especially with travel restrictions in place, we have prepared multiple scenarios ready to be deployed. Our goal at this point is really to maintain -- to remain as flexible as possible and be able to adapt to the unforeseen, which means being able to add and reduce capacity in a short period of time in an efficient way, while maintaining a very lean organization in place to protect our liquidity.

On the fleet side, we are very active and progressing well on negotiation where aircraft lessors for anticipated returns of our Boeing 737 and some of our A330s. The goal is to accelerate our fleet simplification and quickly move towards two types of aircraft by 2021 from five types in 2019, bringing significant operational efficiency, agility and reduction to work our structure.

Meanwhile, the new A321neo long-range with its versatility will be a strong advantage for our competitiveness during recovery. Recent studies tend also to demonstrate that leisure travel will return to 2019 levels in a few years.

Talking about 3, 4, 5 years, there's still a lot of speculation on the when. We don't exactly know when demand for travel will be back to 2019 levels, and we might be surprised by its resurgence once a vaccine for COVID becomes available and travel restrictions have been lifted.

We do not believe that there will be structural change in leisure demand in time. Unlike what seems to be anticipated for business travel, fortunately at Transat, we have a 100% leisure class product and therefore are not stuck with long-haul business class products, such as luxury cabins, seats, exclusive lounge and loyalty program which can represent as we know significant cost for an airline.

We believe today that with the quality of our brand, our client satisfaction that remains at very high level even in these challenging times, with a much lighter cost structure, we should find ourselves within the leading part of the race once we get out of this crisis. Of course, we look forward for the winds to pick up again.

I'll now turn to Denis for the financial results.

Thank you, Annick. Good morning, everyone.

A few additional comments on results, and obviously the quarter results were significantly impacted by COVID-19 pandemic as we suspended our airline operation from April 1st. On July 23rd, we partially resumed our airline operations after four months of inactivity.

Consequently, the third quarter results were reduced to one week of operations, when capacity deployed was a fraction of the one of 2019. Q3 results were then as follows: Revenue of $10 million, down from $699 million in 2019; and adjusted net loss of $141 million compare with a net income of $11 million last year.

The adjusted net loss of the quarter included amortization and interest for $63 million, mainly on aircraft leases; settlement of fuel hedging contracts put in place before the pandemic for $28 million; salary for $23 million. The remaining $27 million was composed of fixed costs and those incurred to resume operations.

For financial statement, the net loss attributable to shareholders was $46 million and included an unrealized gain on change in fair value of derivative of $68 million caused by the strong ascent of jet fuel prices after the collapse during Q2. And also an unrealized foreign exchange gain of $28 million mainly related to the reevaluation of aircraft lease obligation, IFRS 16 following the increase of the Canadian dollars versus the U.S dollars since April 30th.

Let me remind you that those unrealized gains were in fact offsetting unrealized losses incurred during the previous quarter. Now for our balance sheet.

Corporation’s free cash totaled $576 million versus $734 million at the end of April. The variance of $157 million for the quarter was partially attributable to settlement of edging contracts for the period, $28 million as I said earlier.

The remaining cash burn was coming from payments to suppliers or amounts due when operations were suspended and fixed costs, salary, aircraft rent, others after initiatives. Cash in trust or otherwise reserved total $281 million.

The deposit for future travels stood at $638 million compared with $611 million at the same date last year. Of the deposit for future travel as of July 31st, travel credit vouchers granted the customers in compensations for flight canceled due to COVID-19 pandemic amounted to $564 million.

Long-term debt stood at $50 million and lease liabilities $909 million, which now includes six Airbus A321neo long-range. Off-balance-sheet agreements stood at $847 million as of July 31st, mainly related to the 11 Airbus A321neos to be delivered.

During the quarter, we have continued to implement the financial measures aimed at preserving our cash, issuing fully transferable travel credit vouchers without expiry date or deposit from customers as earlier mentioned. Negotiation with aircraft lessors have also continued.

As a precautionary measure, considering the unknown, resulting from the COVID-19 pandemic, like many of our competitors, we are having discussions with our bankers and the various levels of government. As said in our press release, we are in advanced discussion to set up additional financing.

As per the arrangement agreement, Air Canada consent may be required. Since we are not making any final announcement this morning, we will not be in a position to comment further this morning on the matter.

Finally, as you can read in our press release this morning, we will not, for now, provide any outlook for the remainder of summer 2020, nor winter 2021. We will now proceed with your questions.

Thanks for taking my question. So first one maybe on the CVWS, looks like you recognized about $54 million in Q3.

What was the cash amount received during the quarter? And, what do you expect for the CVWS, either P&L or cash in Q4?

For Q3, on the total amount, around $25 million remained to be received.

And what is the amount for -- Denis, for Q4 that you expect to recognize on in the salaries and benefits?

I don't have the details for Q4. In fact, as you may know, this program -- program that was announced to extend the CEWS until December.

We know, how it will work for the month of August, but for after August and for September up to December, we still need to -- and everyone, not only ourselves, still need to obtain the detail of the program to be able to identify which percentage and which amount will be paid for the period. And we don't have -- that's the reason why we cannot communicate to you the amount that we think that we will receive for Q4.

Okay. No.

That's fair. And the EBITDA number that you reported for Q3, that $79.9 million, does that include this $54 million CEWS or it is net of that number?

Oh, yes, absolutely. The all amounts received or to be received from the Qs have been put in our P&L and have been deducted from the salary.

And then, on the cash burn side, so thanks for the details on the cash and the fixed costs and the costs that you provided. Can you remind us, what was the monthly cash burn during the quarter, if I missed that?

And what kind of improvements have you seen in August?

For the quarter, cash burn was in total for the three-month period, $157 million. It's always dangerous to put that in months, because it varies from one month to the other, depending what you are paying during the month.

It obviously includes the fixed costs after initiatives that still have to be paid, but also amount that you pay to supplier, especially for the amount that was due when the operation was suspended. Then, depending on the month, the amounts are different.

And -- but for the entire period, like I said earlier, the amount was $157 million.

Okay. My point was basically are you expecting that cash burn to improve sequentially in Q4?

Like you saw, we have not communicated any amount for Q4. Again, it will be composed of the same element and also customer deposit that we may have to or we will have to pay to give back to customer that we're still working on.

This one could also affect the disbursement for the fourth quarter.

And last one for me on the bookings and refund trends. It looks like the customer deposits increased sequentially quarter-over-quarter.

Is that entirely driven by new bookings, and have you handed out any cash refunds during the quarter? Also, what's driving these new bookings?

Are they coming from Europe, they're coming from Canada, where is this driven by?

I’ll take the first part of the question. It's true that during the quarter customer deposits have grown, if we compare that with the amount that we were having at the end of April, not significantly though.

We have been able to get some bookings from customer during the period. Fortunately, this is coming from when we start -- when we announced the program.

We were having some traction in terms of bookings. Now, I’d say that the bookings and Annick will have some comments to this, but the bookings to come will be linked to development of COVID and also the restrictions that will be put in place or will be taken out by the government.

Then, I would say that the amount versus -- at the end versus April has increased, but not a lot.

For the volume, the highest level of activity is on the domestic market, followed by European destination, mostly France, Portugal as well, where we have deployed the most of the capacity, and then South, which is a very small program that we're offering this summer. So, South, Punta Cana, Cancun and Port-au-Prince following.

So, Denis, I think on the refund side, do you have anything to offer? Did you pay out any cash refunds during the quarter?

Yes. Some were made during the quarter, but I would say, not a very significant amount upto now.

So, Annick, you spoke about a new environment, which has more last-minute pattern, younger travelers visiting family and friends. The over 20 routes that you began to offer at the end of July was very much in keeping with your traditional kind of summer programs on the destinations.

With the A321neo that offer greater flexibility, has there been any discussion to shift or change your destination perhaps to a more or a higher proportion of domestic routes?

When we look at the overall network today, we took into consideration that with the restriction potentially that would be extended that the domestic markets would be more in demand, which is exactly the factor right now. And overall, worldwide, the domestic market is recuperating much faster than the international market.

So, that's why when we designed the network for this summer, we put a lot -- more emphasis I would say on the domestic market. As for the European market, we made sure that we would go with VFR because with the surveys we have put in place that consumers, Canadian consumers were telling us that visiting friends and family would be the first reason for travel.

So that's why we came up with a lot of routes on France, Portugal and the UK for instance, Port-au-Prince in Haiti was as well taking this into consideration. So, this is how we designed the program.

Initially, we had a little bit more capacity on destinations such as Cancun and Punta Cana. These are a less of a leisure, less -- more of a leisure market, less a VFR market.

And we have to downgrade the program to adapt to the reality. But scale with the capacity that we have right now on south destination, we are not -- I wouldn't say -- we are not of course in the existing context satisfied with our results, but the South is not going so badly at this disappoint.

Okay. That’s interesting.

Thank you. And then, just -- I know you mentioned you're preparing multiple scenarios in regard to kind of the winter operations.

And I'm just wondering if you could speak about your thought process. And I understand you're not going to be giving outlook commentary.

But, are those scenarios keeping the weighting towards the sun destinations market, just given your comments or could there again be a shift from that?

That’s pending travel restrictions are lifted. We are -- and like every other airlines, we are, of course, designing multiple scenarios to be ready to be deployed according to what's going to happen.

We have no clear visibility on what's going to be the upcoming demand. We are taking a step by step approach and waiting until the last minute to be able to make changes.

So far today, we are open in terms of sales. We are open to sell on multiple destinations.

We have a program that represent minus 25% of capacity versus last year. We know at one point that we might have to modify this program.

We see that the South market is picking up compared to the summer program. So, of course, we will make sure that we have a strong destination, such as Cancun, Punta Cana and various destinations that are very popular during wintertime.

At the same time, we expect that for consumers, there’s going to be insurance available, there's already insurance available in the market. So, we are confident that with the program that we have today and the modification that will be upcoming, we will be able to adjust depending on demand.

It's difficult to say at this point what's going to be the final program to operate. We're waiting like everybody else to the last minute to make changes.

Yes. Thank you very much.

First question, could you help us to reconcile what could potentially be or the burn rate in the fourth quarter? When we look at the $157 million, are there any big items we should remove that are not sustainable through Q4?

And maybe, could you provide some comments about the refunds that you need to make in Q4 that we should be taking into account? Thank you.

Like we said earlier, there are many elements to consider in the cash burn. Obviously, what we -- what's easy to forecast is the fixed costs after initiatives, forecast what you will have to pay.

I think I already shared numbers with you on the fixed costs on the previous quarter. And all efficient initiatives that we were putting in place were to be versus cash.

Where it's a little bit more complicated to make mention here is for payable and customer deposit. And obviously, at the end of next quarter, those numbers will be in the cash burn of the period.

And as we speak, considering the restriction program, the willingness of people to travel, the fact that people will take their credit voucher and apply it to their next holidays, again depending on the evolution of the pandemic and depending also restriction from the government, it's very, very difficult to forecast. Then, this is the reason why, because it's not only -- not to share those numbers with you, but this is the reason why we were saying this morning that we were in advanced discussion in terms of improving our liquidity.

We have no more ready to say this morning, because we're not ready to announce anything yet. But, this is the reason why again to be -- to have prudent approach, being difficult to make any -- to set up any program for next winter, and repeating everything I just said earlier.

We have had discussion and today we are at advanced stage in those discussions. As soon as we have more to say on the financing, obviously, we will make the proper announcement.

Okay. And second question, when we look at the government help so far in Canada, obviously a different mindset versus some other countries.

So, any thoughts whether the government could ultimately come up with some funding for the airline industry?

Yes. It's not because we don't talk to all the ministers of Canada and Quebec to try to get some help, and I'm sure I'm not the only one talking to all of them very often.

But, it seems that in Canada, our industry doesn't exist. They don't seem to be interested by everything, not just the airline, but look at the airport, it’s the same problem.

Look at the NAV Canada, look at all the tourism companies in Canada, nobody is helping this industry. And as you know, we’re suffering like crazy, knowing that borders are closed, people have to go on quarantine when they travel.

And they -- even, they say that you have to travel for essential things and not to travel like usually. That's the recommendation of the government.

So, on one side, and that's why I was saying just before that we're not going to be on the same playing field with the others tomorrow when business will start again, because you see in U.S., they already put more than $50 billion, and they're going to have more money in Europe, Air France, KLM, British Airways, Lufthansa, and even organization a little bit like us, like if you think about TUI. TUI already received €2,400 million from help and Transat received from help, the CEWS.

And thank you very much. And that's it.

And -- but it's not just Transat, all the others, organizations are -- giving the same thing in Canada. Really, I don't understand.

I don't know why it seems that they don't -- they don't think it's very important. We still have 5,200 employees.

And today, we have more than 3,000 employees on layoff, more than that. And like I said -- we said before, maybe we’re going to be obliged to lay off definitely more than 2,000 employees, and other airlines are saying 20,000 employees.

Some other organizations are talking about hundreds of employees. So, we're talking about -- and tomorrow, because those people are really specialized in our industry, it would be difficult to find a job.

And very often, it's good job, well paid. Those people will be on unemployment and it would be a cost for Canada.

So really, really, I don't understand. We don't understand.

We’re all crying, talking to every minister that we know, we find, they all say, yes, yes, we are going to help you one day, we understand you and thank you very much and good luck. And that's it.

And we don't hear about them anymore. So we’re really -- I am frustrated and we are all on tourism organization and airline business, we are frustrated, to be clear.

Okay. That's a great color, Jean-Marc.

And last one for me, back in Q2, you expressed some doubt, with respect to the transaction with Air Canada. So, could you share maybe some thoughts now that we are getting closer to getting the regulatory approvals?

First, we have an agreement -- an arrangement agreement between the two organizations. So, this is there.

Second, we're working together to get regulatory approval to try to answer to all the questions that Transport Canada or the Competition Bureau in Europe are asking for. They are asking for -- especially Europe, it's unbelievable.

They’re asking for thousands and thousands of documents. I think, we sent more than 100,000 pages of report to Europe.

Europe, I don't know, they still -- they live in another world, not the same world than me, for sure. I don't know, there's no pandemic in Europe, I suppose.

So, we're working together and we're trying to put the transaction together. And it takes time and it's -- but, we have no choice.

We have to do what we have to do. And we'll see where this ends up.

But, as the deadline is the 27th of December. So, we're getting closer.

I never thought that I would wait so long to do a transaction, I never thought, but now I'm used to. So, I'm waiting for the 27th of December.

Hi. Thanks for taking my question.

And good morning, everybody. Maybe just first one for me.

As you've relaunched service here and you're starting to rebuild your revenue, can you share with us what percentage of that sale is coming from vouchers versus cash? And has that been a pretty steady ratio over the past, let's call it, almost six weeks since you started or -- and give a sense what that might look like, as you continue to build out your booking curve?

Up to now, as you see, for the third quarter, it only resumed to one week of operation. We had seen that [Technical Difficulty] grown a little since April.

They have been able to get some more bookings from client, but again, not a lot in the circumstances. Do you want comment Annick on our flights, are we using vouchers or new bookings?

So, when we look at the summer bookings right now between July, so last week of July and October, October 31st, in terms of credit voucher, our sales, the seats sold represent about 19.1% of credit vouchers, so balance being other mode of payment. So, this is what we have right now.

And as for winter season, we are still analyzing the numbers right now as we speak, but it should be around that as well.

Okay. That's very helpful.

And keep in mind, the small program that we have initiated. And on those programs that we still maintained, there was already bookings from clients on those specific flights, and those show up obviously.

Okay. That’s helpful.

And then, Denis, I don't want to beat a dead horse here on your cash burn, but maybe I'll ask it a different way. You have $576 million, I guess you call it free cash.

Can you remind us again, what minimum amount you'd like to hold at any given time during a calendar year? And at what point does that become concerning, just given the cash burn you're seeing today?

You did $157 million of burn in fiscal Q3, and presumably fiscal Q4 will be better, because you'll have some revenue offsets there. But, at $576 million, like, how much of a buffer do we have -- or do you have before you get to some sort of minimum amount that you need to operate your business?

I would say that you always have to look at the cash position versus a liability that you have on the other side of the balance sheet, I mean accounts payable and customer deposits. And when business is -- when you have activities you're not -- it's not something that you really focus on because when you pay suppliers, it's always replaced by new accounts payable, and that's the same for customer deposits.

When those customer deposits are used, you get other customer deposit for future flights. Then, that's the dynamic where we are not really in today because the activity is really limited versus what we used to have.

And, again, that's the reason why we've decided to work on having more liquidity in the Company in case that the COVID lasts for a longer, longer period. I would say that, obviously, again, every company needs to maintain a certain amount of cash.

Again, for us in our industry in relation with the liability that we -- that you have, then today with $576 million, we're fine. But assuming that the COVID will last for some time, and we will have to pay the old account payables and still maintain a certain amount of fixed costs and having to reimburse some of the clients in certain circumstances, then more cash -- more cash is needed.

And unfortunately, I cannot be more specific on your question.

Maybe a last one for me, Annick. I suspect some of the flexibility you have today in how you're building up your capacity is helped by the fact that -- I suspect you’re seeing a lot of closed-end bookings, like a higher percentage of your seat sales are happening shortly when the flight is supposed to take off.

How does this play out if international travel takes three, four or five years to return? And as that booking curve builds out over a longer period of time and normalizes, do you think that reduces some of the flexibility?

So, your ability to kind of move around your schedule becomes tougher in 2021 or 2022 as you committed to flying people who book things in all three, four, five, six months in advance, even if you're flying at suboptimal load factors?

Do you want to go, Annick? First, I would like do a comment, because when the people are saying it will take two years, three years, four years, five years, nobody knows.

So, first, do we find a vaccine and with the vaccine and the [indiscernible] we also give confidence to the customers. The customers will be back very, very fast, especially in the VFR and leisure market.

So for me, those things doesn't mean anything, number one. And we know by experience going out all those crises that as soon as the people feel comfortable, they will start to travel a lot regularly.

There's no problem with that. Part number one.

Part number two, we have and we show it, very easy. We put 85% of our people, we lay off from one day to another.

And even, even, and it's not something I'd like to say, but even with the pilot, we lay off them and we ask them, we said to them, we have no choice. So, we are a small airline with the people, very, very close to the company.

And they accept it, they do it, and they are happy to help the Company. They talk to our people, every three weeks.

We got web session, one in English, one in French. And we have 2,000, 3,000 -- 2,000 in France, 1000 in English, listening about the web, plus asking question for an hour.

So, we -- and very often I have my people saying to me, I'm ready to come back to the Company and not to be paid to help the Company. So, we are -- we have a good organization, is very flexible.

We can put some of the plane on the ground. And with the Airbus 321neo long-range 199 seats, it's a very good plane with a great range, easy to set it up that can go to Europe or can go to the South.

So, this helps us a lot also. And now, I will pass to a Annick.

Annick, do you to add things, please?

Yes. Maybe to -- if this answers your question, we have a full team right now on the network and revenue management side, looking at -- and modeling the forecast and future demand.

And we are adjusting, of course, we need to do so, adjusting our curves based on an anticipated booking pattern that we see, expected load factors and a revenue per passenger. So, this is being reviewed as we speak.

This is a key priority right now, even at the moment where we have low activities, we have a full team of people working at mobilizing the 12, 18, 24 upcoming months.

That's very helpful. Thank you all for taking my questions here.

And best of luck as you ramp up your operations.

Thank you. Just two quick follow-ups.

Perhaps one on the EU decision for the Air Canada transaction. Is that December 11th, the hard date, meaning that if they slip beyond December 11th, it can get pretty close to the outside date of December 27th?

Any thoughts there?

It should. That's what they're saying.

But, to be clear, with them, I will not bet on it. We never know.

They're listening, they’re asking questions. They say, I didn’t answer well, so we're asking more questions.

But no, right now, it's -- the provisional deadline is December 11th. That's the only thing I can say.

Could it be more to that? Everything is possible.

So, Jean-Marc Eustache, a quick question on that. If they slip beyond December 11th, do you have any flexibility in the agreement to push out the outside date because the EU took more time?

Today, the agreement is 27th of December. So tomorrow, if they push more, we’ll have to have a discussion with Air Canada and decide together do we want them to continue and do they want to continue?

Yes or no? This -- today?

No. Today, it's the 27th of December and that's it.

That's all.

Okay, makes sense. Perfect.

And then, last one, are you guys also participating or conducting any voluntary COVID testing at the airports, like Air Canada is doing? And if so, any kind of early indications in terms of how much success have you received?

Excuse me. I didn't understand very well your question.

Can you say it again, please? Excuse me.

Yes. So, Air Canada is doing voluntary COVID testing at the airports, at the Pearson Airport, actually.

Are you guys also participating in something like that?

No, no. To be clear, today, no, no.

Maybe we should. But today, no, we're not doing it.

So, let me thank everyone, and remind you that our fourth quarter results will be released on December the 10, 2020. Thank you very much and have a good day.

Thank you very much, everyone.