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Federal government approves Air Canada takeover of Transat
Canada’s federal government has granted Air Canada’s purchase of rival airline and travel group Transat A.T. Inc.
The deal is ‘in the interest of Canadians,’ said Transport Minister Omar Alghabra.
It will come with conditions to ensure market competition and the current impact on the market due to Covid-19 was a key factor.
"The proposed purchase of Transat A.T. by Air Canada will bring greater stability to Canada’s air transport market," Alghabra said.
"It will be accompanied by strict conditions which will support future international competition, connectivity and protect jobs. We are confident these measures will be beneficial to travelers and the industry as a whole."
Under strict conditions, Transat’s head office and brand must stay in Quebec; and it must launch new routes within five years.
The business must also guarantee a workforce of 1,500 employees to the merged company’s new travel business.
Although it ignored competition concerns from some other government officials, the deal was probably the only way to save Transat jobs, given impact of Covid-19 on its business.
"The proposed acquisition offers the best probable outcomes for workers, for Canadians seeking service and choice in leisure travel to Europe, and for other Canadian industries that rely on air transport," the Transport Ministry said.
Air Canada finally agreed a cut-price ‘Covid deal’ for Transat for just $190 million, after originally bidding $720 million.
Written by Ray Montgomery, US Editor
TravelMole Editorial Team
Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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