The European Commission has put the kibosh on the proposed takeover of Air Transat by Air Canada and the two companies have reached an agreement on dissolving the merger process. The companies announced the move independently on Friday after being told the Commission would not approve the merger. Europe is Air Transat’s main summer destination with dozens of routes to major centres throughout the continent. The deal ran afoul of the commission’s competition rules and Air Canada said it wasn’t willing to go any farther on concessions to appease the body.
“After careful consideration, Air Canada has concluded that providing additional, onerous remedies, which may still not secure an EC approval, would significantly compromise Air Canada’s ability to compete internationally, negatively impacting customers, other stakeholders and future prospects as it recovers and rebuilds from the impact of the COVID-19 pandemic,” Air Canada said in its statement. Air Transat founder Jean-Marc Eustache said the deal was complicated by the pandemic and his first job now is to secure funding that will allow the airline to continue. It’s in talks with the Canadian government for $500 million in financing through the Large Employer Emergency Financing Facility. “Discussions on both topics are at an advanced stage and Transat’s management is confident that a satisfactory financing will be secured in the coming weeks,” the company said.