Air Canada’s planned acquisition of Air Transat has been terminated


On Good Friday news came out that Air Canada and Air Transat agreed to terminate the agreement for Air Canada to buy Air Transat. The acquisition of Air Transat by Air Canada was subject to approval and conditions set out by various governments and regulatory authorities and one of them, the European Commission put onerous conditions in place according to Air Canada. Thus even after making some concessions the two airlines have agreed to call it off due to those conditions.

There are both pros and cons to this news. The main pro is that we keep more airlines here for competition, the main con is will Air Transat survive?  The latter is the main concern as Air Transat themselves stated early in March that it will need $500 million in financing if the deal didn’t happen. Well it didn’t so the big question will be what will happen to Air Transat. That will remain to be seen but I feel like the Quebec government won’t let them go under and perhaps some other corporation or investor will come in to keep the airline going.

Should it all work out for Air Transat, and depending on who puts money into the airline what we may see happen is Air Transat become an Aeroplan partner, just we saw was going to happen during Air Canada and Aeroplan’s short lived divorce in 2018. Back then Aeroplan announced a partnership with Air Transat that was supposed to launch in July 2020 but then Air Canada bought Aeroplan back and the Air Transat partnership was nixed only to be followed shortly by Air Canada’s plan to buy Air Transat. An Aeroplan partnership could be an ideal way for Air Transat to fill some of the seats on their planes and add a little extra revenue to their bottom line.