American airline mergers have been a hot topic in the news lately but how about Canada? Are similar announcements about to come from that country?
The majority owner of Air Canada has been approached by private equity investors and pension funds to consider a merger with a United States airline, according to Reuters.
A weak Air Canada share price has prompted ACE to consider other options, according to Robert Milton, chief executive of ACE Aviation Holdings and the majority owner of Air Canada.
“In my view, as I watch the US airlines scurrying around to merge, anybody that actually ties up with Air Canada gets a unique piece of geography relative to the way the US guys would split it up,” Mr Milton said in a conference call, according to Reuters.
He said it was possible that Air Canada could be a part of a wave of consolidation set to hit the airline industry in the upcoming weeks.
It has been widely reported that Delta Air Lines and Northwest Airlines could announce a merger and that United Airlines and Continental Airlines are in the early stages of talks.
Canada currently has federal legislation that limits foreign ownership in a Canadian airline to 25%. However, it may not be necessary for foreign private equity to get involved, Mr Milton said.
Report by David Wilkening
