Air Transat Takeover Approved

Transport Canada has approved the sale of Air Transat to Air Canada citing the pandemic as a key factor in its decision. “As Transat A.T. itself noted in December 2020, current uncertainty casts doubt on its ability to continue, as it faces significant financing challenges,” the government said in a news release. “Noting the effects of the pandemic on air service in general, and on Transat A.T. in particular, the Government of Canada has determined that 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, particularly aerospace.”

Air Canada paid $180 million for Air Transat and it will offer, as the main line, a turnkey vacations carrier that has long ties with the leisure travel industry in North American sun destinations and European routes. But the government has imposed some conditions that ensure the airline won’t simply be absorbed into Air Canada. It will have to maintain the current Quebec head office and commit to keeping its 1,500 employees. The current maintenance contracts, especially those in Quebec, will have to be maintained. Under Air Canada, Air Transat will also be required to develop new routes in the next five years.

WestJet, which has carved out a sizeable niche in the vacation market, was harshly critical of the approval. “This decision shows blatant disregard for all Canadians who believe in healthy competition,” CEO Ed Sims said. “When Canadians look to explore the world and reunite with family and friends once again, they will face fewer choices and higher fares.”