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The tails of Air Transat and an Air Canada plane were released on Aug. Seen on the tarmac at Montreal-Trudeau International Airport on April 25th, 2020

The federal government has taken over the competing airline Transat AT Inc However, conditions have been applied to a deal that still requires regulatory approval in Europe

The federal government, when reviewing the deal, said it had considered the impact of the COVID-19 pandemic on businesses and said the takeover was in the best interests of the public

Conditions imposed include a minimum number of jobs to be retained, the use of a price surveillance mechanism, and a commitment to protect Transat’s Montreal headquarters and brand

“The Government of Canada has determined that the proposed acquisition would have the most likely results for workers, Canadians seeking service and choice while on vacation to Europe, and other Canadian industries that rely on aviation, particularly aviation. and space travel, offers”Federal government said in a statement on Thursday evening
The federal competition commissioner criticized the takeover in a report released in March, noting that it would limit customer choices and increase airfares, while the federal cabinet considered the commissioner’s report as well as a confidential report from Transport Canada when deciding on the deal

“Given the devastating impact of the COVID-19 pandemic on the aviation industry, Air Canada’s proposed acquisition of Transat AT will bring more stability to Canada’s aviation market,” said Transport Secretary Omar Alghabra in a statement. that support future international competition, connectivity and job security. We are confident that these measures will be of benefit to travelers and the entire industry ”

Ottawa’s announcement comes days before the February 15 deadline set in the acquisition agreement Air Canada may withdraw from business on that date without mutual agreement The two companies could also agree to extend the deadline if the European Commission does not release a decision by Monday / p>

European approval is a condition of business due to the large presence of the two companies in this market. The EC suspended its investigation into the deal at the end of December as it awaited further information from the two airlines. An EC spokeswoman did not respond to interview requests

Air Canada is expected to look into the deal and acceptance of the terms when it releases its fourth quarter 2020 and full year financial results on Friday morning

Transat shareholders approved Air Canada’s offer in December for $ 5 per share in cash or $ 02862 of one Air Canada share for each Transat share that’s worth $ 606 based on Air Canada’s closing price on Thursday the price fell from 720 million due to the collapse in demand for air travel during the pandemic USD lowered

Air Canada and Transat announced the 2019 deal, shortly after WestJet Airlines Ltd said it was bought by Onex Corp. That move meant Air Canada was facing a tougher Calgary competitor with deeper pockets and a greater ability to expand WestJet’s strategy into lucrative international markets and business class, to push ahead

The Air Canada’s proposed acquisition would have given the Canadian airline control of approximately 60 percent of the transatlantic routes and the vast majority of domestic airline flights to Europe

Transat recently suspended its flight schedule to comply with a federal government request to suspend flights to Mexico and the Caribbean

“In determining that the proposed purchase is in the public interest, the Government of Canada considered a wide range of factors including: B. the level of service, wider social and economic impact, the financial health of the aviation sector and competition”Said the federal government

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Air Transat

World News – CA – Ottawa approves Air Canada’s acquisition of Air Transat for $ 180 million

Source: https://www.theglobeandmail.com/business/article-ottawa-approves-air-canadas-180-million-takeover-of-air-transat/