THE attempt by Canada's leading airline, Air Canada, to acquire Transat, the parent company of the country's number three carrier, could face a delay of up to nine months while the federal government conducts an additional review to assess the effects on competition
THE attempt by Canada's leading airline, Air Canada, to acquire Transat, the parent company of the country's number three carrier, could face a delay of up to nine months while the federal government conducts an additional review to assess the effects on competition. The Ministry of Transport said that the CAD720 million (US$541.05 million) acquisition 'raises public interest issues related to national transportation', reported New York's FreightWaves.
The review will commence on November 4 and could last up to 250 days, stretching into May 2020.
The federal government's announcement comes just days after Transat's shareholders approved a newly sweetened offer by Air Canada to ward off a competitor's bid.
Transat also provides cargo services, which accounted for a portion of the CAD135 million it recorded as 'other' revenue in 2018. In spite of being small, Transat's cargo business could be a welcome addition to Air Canada, which has been hit by a slump in airfreight revenues amid trade disputes.
Regulators are likely to focus on the implications for the passenger market, particularly as Canada's air fares are among the highest in the world, and the Transat purchase would consolidate the market for flights between Canada and popular vacation spots, especially in the Caribbean.
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