Air Canada and Air Transat deal collapses

It is not a real surprise but the Air Canada takeover of Air Transat has collapsed, one of the largest aviation casualties of Covid-19.

Air Canada and Transat had originally agreed in June 2019 on the acquisition, the terms of which were subsequently amended in August 2019 and then revised in October 2020 as a result of the severe economic impact of the Covid-19 pandemic.

Blame has been levelled at the European Commission (EC) in not approving the purchase based on the currently offered remedy package but it is abundantly clear at this point of time the last thing Air Canada needs is to acquire another loss making airline.

What happens next is not very apparent as this is not the time to buy an airline although there was some interest.  However, Quebec economy minister Pierre Fitzgibbon also said the provincial government "will not leave Transat without support."

At the present time all Air Transat operations are temporarily suspended until 14 June.

Both Air Canada and Air Transat have agreed to terminate the Arrangement Agreement with Air Canada paying Air Transat a termination fee of $12.5m, and with Air Transat no longer under any obligation to pay Air Canada any fee should Air Transat be involved in another acquisition or similar transaction in the future.

www.aircanada.com

www.airtransat.com

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L. Stephen Davis, Toronto, Canada

How in hell's name is the European Commission allowed to have any say in this?!TS is in trouble & this will be the kiss of death for them. AC would have salvaged them, merged pilot & other groups,bought their slots & added LGW. I'd now give TS 12 to 18 months, max.