Feds clear Air Canada takeover of Air Transat
The federal government has cleared Air Canada to take over Air Transat, Transport Canada announced Thursday.
Transport Minister Omar Alghabra announced the approval just days before the deal’s Feb. 15 deadline, saying the government concluded the purchase is in the public interest.
He said it considered a range of factors, including level of service, wider social and economic implications, the financial health of the air transportation sector, and competition.
“Given the devastating impact of the COVID-19 pandemic on the air industry, the proposed purchase of Transat A.T. by Air Canada will bring greater stability to Canada’s air transport market,” he said in a statement.
The pandemic was also cited as a factor when Montreal-based Transat noted it may not be able to continue on its own because of the significant financial challenges.
The government said the acquisition is the best outcome for workers, Canadians travellers and other industries that rely on air transport.
Transat shareholders in December approved the revised deal, equal to $5 per share and a significant decrease from an earlier $720 million or $18 per share.
Air Canada announced 1,500 layoffs Tuesday as it continued cutting service, on top of the 1,700 jobs cut in January. The airline also paused all operations of its Rouge line on Feb. 8 indefinitely, laying off 80 workers.
WestJet also laid off staff on the heels of the federal government’s request that airlines suspend all flights to Mexico and the Caribbean until April 30.
Air Transat had announced two weeks ago that they were temporarily shutting down all operations in light of the government’s request, until news broke Thursday of the approved sale to Air Canada.
In the release, the government acknowledged that some Air Transat passengers are still waiting for their refunds for flights cancelled due to COVID-19, and assured Canadians that “refunds are an integral part of the negotiations with airlines regarding any assistance plan.”
The board of directors of Transat AT Inc. last June approved the takeover offer by Air Canada valued at $520 million.
in June 27, 2019 Air Canada reaches deal to buy Transat AT for $520M or $13 per share