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Air Canada, Transat deal faces intense EU antitrust scrutiny

Published 2020-05-25, 10:09 a/m
Updated 2020-05-25, 05:30 p/m
© Reuters. FILE PHOTO: An Air Canada Boeing 737 MAX 8 from San Francisco approaches for landing at Toronto Pearson International Airport over a parked Air Canada Boeing 737 MAX 8 aircraft in Toronto

© Reuters. FILE PHOTO: An Air Canada Boeing 737 MAX 8 from San Francisco approaches for landing at Toronto Pearson International Airport over a parked Air Canada Boeing 737 MAX 8 aircraft in Toronto

By Foo Yun Chee

BRUSSELS (Reuters) - Air Canada 's (TO:AC) bid for Canadian tour operator Transat AT Inc (TO:TRZ) may result in higher prices and less choice for flights between Europe and Canada, EU antitrust regulators said on Monday as they opened a full-scale investigation into the deal.

Shares of Transat closed down about 7% at C$7 on Monday.

Montreal-based Air Canada is hoping Transat will boost its leisure travel business and help it better compete with rival WestJet Airlines (TO:WJA).

The European Commission said the deal could significantly reduce competition on 33 routes between Europe and Canada.

The EU antitrust enforcer said other European airlines were just distant competitors and that WestJet was not a sufficiently strong rival.

"This is a challenging time, especially in markets severely impacted by the coronavirus outbreak, but a return to normal and healthy market conditions must be based on markets that remain competitive," European Competition Commissioner Margrethe Vestager said in a statement.

Transat said in a statement that it was studying the commission's decision.

The company also said it had notified Air Canada that it intends to activate the first of the three one-month extensions of the outside date set for the deal, which is now postponed to July 27 from June 27.

The deal is now expected to close in the fourth quarter of 2020, Transat said. The company had initially said it anticipated the deal would close early this year.

Transat and Air Canada had declined to offer concessions to address the commission's concerns during the European Union's preliminary review of the deal.

© Reuters. FILE PHOTO: An Air Canada Boeing 737 MAX 8 from San Francisco approaches for landing at Toronto Pearson International Airport over a parked Air Canada Boeing 737 MAX 8 aircraft in Toronto

Regulators set a Sept. 30 deadline for their decision. The Canadian Competition Bureau in March also voiced concerns.

Latest comments

How in the f^%# does air canada have cash to buy a rival airline but cant refund tickets? This is bs.
this deal has been in the making for awhile and they could make an all stock offer or purchase with debt doesn't need to be cash
This deal was in the works before the virus
Exactly! Facebook Fake News Conspiracy Theorists are on here whining about something they know nothing about. These idiots will complain because they are friendless, have no life or life skills, and are jealous because you aren't as miserable as they are. Alt-right Conservative Conspiracy Theorists will suck the life out of you if you let them. They can all go back to Facebook where they can congregate with ISIS and the like. All Clowns🤡🤡🤡🤣
good news for Air Canada ...
Air Canada likely wants out of the deal now and had Trudeau make a few phone calls.
Good hopefully Transat goes under - this is what you get for stealing paying customers money! Thousands of Canadian have their money locked up due to cancelled flights. If we don't get our refunds - I will be happy to see Transat go under (you much of thieves)
so if they cant get themselves out of the mess they are in by running a good business and keeping customers happy than theyneill try to create monopoly and gauge people..disgusting..we are already so overpriced in canada it's not funny.. its worse the communism here..and AC has no money to pay employees but had money for Air Transat???????...all while no bailout from idiot Trudeau b3cause he is too stupid to even notice what's going on and it's too busy kissing chinas and islamic ars
Go back to Facebook you fake name loser. Take that crook Scheer with you, too! You are just bitter that you picked that loser to win instead of a two term winner like Trudeau! You are just a talking head with a fake name with no freinds except your computer. 🤣🤣🤣You very likely are broke with nothing to invest too. Get lost Faker!
Does it surprise you that they are trying to rob the regular consumer?
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