Wednesday,  September 23, 2020  10:06 am

EU resumes Air Canada/Transat merger probe, sets Dec. 11th deadline

EU resumes Air Canada/Transat merger probe, sets Dec. 11th deadline
Michael Pihach

Michael Pihach is an award-winning journalist with a keen interest in digital storytelling. In addition to PAX, Michael has also written for CBC Life, Ryerson University Magazine, IN Magazine, and DailyXtra.ca. Michael joins PAX after years of working at popular Canadian television shows, such as Steven and Chris, The Goods and The Marilyn Denis Show.

Air Canada's proposed purchase of Transat A.T. is back in the news as European antitrust regulators resume their investigation of the deal, setting a deadline of December 11th to make a final decision. 

Air Canada made a $720 million-dollar (CAD) bid that was approved on August 23rd, 2019. However, since then, the deal has required approval by both Canadian and European regulators.

The European Commission (EC) began an in-depth study of the acquisition in May, saying it had concerns that the transaction would result in possible fare increases and less choice for those seeking to fly between Canada and Europe.

(The European Commission oversees competition policy in the 27-member European Union).

In June, the regulator froze their inquiry, citing that more data was needed.

That same month, Transat hinted that there are “certain factors beyond its control and related to the COVID-19 pandemic” that could influence the outcome of the proposed arrangement.

In July, Transat delayed the closing of the proposed takeover, citing that the initial “outside date” was set on June 27th, which was at the time thought to be enough to cover the regulatory approval process.

The EC's preliminary analysis noted that there could be diminished competition on 33 routes between Canada and Europe if Air Canada were to acquire Transat.  

In March, the Competition Bureau of Canada was unfavourable to the transaction, but it should be noted that the analysis was done before the COVID-19 pandemic outbreak.  

Air Transat resumed domestic and international operations on July 23rd after months of inactivity related to the coronavirus crisis. 

The Quebec-based tour operator has since announced that its Future Travel Credits no longer expire and has also introduced a series of fuel-efficient Airbus aircraft to its fleet.


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