Air Canada and Air Transat call off merger

Air Canada and Air Transat have announced that they have cancelled their intended merger. The deal was still awaiting approval from the European Commission which voiced its concern about a lack of competition between the EU and Canada and needed more remedies from Air Canada and Air Transat. And even then it was unclear if the EC would give it the OK.

Due to this and also the slow recovery of air travel, both companies decided to walk away from the deal. Air Canada, however, will pay a one-time termination fee of 12,5 million CAD. With the deal off, Air Transat is now facing a bleak future. Cash is quickly running out as the airline is currently not operating any flights and has parked its 31 aircrafts due to the strict Canadian regulations on international air travel.

In February, the proposed merger got approval from the Canadian authorities. It was also shortly thereafter that news broke that a Canadian media CEO was trying to prevent the merger by offering his investment firm to buy Air Transat. If this option is now viable again is currently unknown.

Photo by Anton Homma.