Transat cancels Western Canada flights to USA & South, delays Air Canada deal

Air Canada purchase of Transat to undergo assessment until May

OTTAWA — Air Canada’s shareholder-approved deal to buy Transat A.T. will undergo a 250-day public interest assessment.

Transport Minister Marc Garneau says he’s approved an extra 100 days for Transport Canada and the Commissioner of Competition to complete the assessment of the $720-million transaction by May 2.

He says the additional time was granted because of the size and scope of the proposed deal.

Consultations will begin Nov 4.

The minister will make a recommendation about the purchase to cabinet. There is no legislated timeline for the minister to make his recommendations or for cabinet to make a final decision.

The takeover is expected to face intense scrutiny from the Competition Bureau and other regulatory authorities, including in Europe. Transat had said it expected the deal to close early next year.

The deal will narrow the field of airline competition, securing for Air Canada about 60 per cent of the Canadian transatlantic market and helping the company maintain a firm hold on Montreal air travel.

Both Air Canada and Transat are headquartered in Montreal, but worries persist around the future of Transat’s head office and potential job losses.

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